- Payment fraud can take many forms, but it generally targets data vulnerabilities in business networks.
- For victim companies, these attacks can have serious direct and secondary financial costs.
- Robust prevention and planning can help companies avoid cyberattacks and respond if they are breached.
- This article is for small businesses seeking to understand payment fraud and what to do about it.
Payment fraud and related forms of online criminality remain among the most pervasive threats for small businesses. But nontechnical business owners often don’t understand this largely invisible problem, which can lead them to ignore it. This can have devastating consequences for small businesses, sometimes leading to their closure. As a result, it’s important that all entrepreneurs understand what payment fraud is, how it happens, and how to proactively defend themselves and their customers against would-be fraudsters.
What is payment fraud?
Payment fraud occurs when a fraudster steals sensitive payment information about a customer – usually in a data breach – to access and use their online banking or credit accounts. Payment fraud is an increasingly prevalent issue for consumers and businesses alike. A 2021 report from fraud prevention company SEON found there were 1,862 data compromises and a total of 293 million victims of data breaches.
Social Security numbers are the most commonly compromised information each year, followed by personal health data, driver’s license…
