No safety net: why APP fraud could hit corporates hard

Risk and finance bosses face an escalating set of fraud challenges today. From employees spending company money for personal gain, to scammers using customer identities to purchase goods and max out loans, there’s no shortage of financial risk. But one less well understood tactic gaining traction in this space is authorised push payment (APP) fraud.

The truth is, APP fraud is already a £100m+ problem for UK businesses and it’s on the rise. With few protections in place, finance chiefs need to look at newer digital payment systems to mitigate risk.

On the rise

APP fraud occurs when a fraudster tricks a consumer or business into making a payment to an account under their control. It’s making waves in the consumer world, which accounts for the majority of the £354.3 million lost to these scams in 2018, according to UK Finance.

However, new protections brought in for individual victims of APP fraud don’t apply to businesses. This is important, because once a scammer has your money, there’s little you can do to get it back.

A wider impact

APP fraud cost UK firms £126 million in 2018, and is becoming an increasingly popular way to target B2B transactions. Businesses need to consider not just the direct losses associated with wiring corporate funds to a fraudster, but other possible impacts to their organisation.

There are also costs associated with:

  • Investigation of any APP fraud attempt. Fraudsters will often attempt multiple transactions of low monetary value, increasing the workload for investigators
  • Supply chain issues. If you’ve paid a fraudster thinking they were a legitimate supplier, it may be that the real supplier is left high and dry. These crucial business relationships can suffer as a result, potentially impacting the end customer experience

A new way

The answer for finance bosses is to switch to digital pull payments systems which do not require the buyer to store supplier payment details or initiate payment. These stop APP fraud dead in its tracks, saving potentially significant fraud losses, and can reduce other costs by optimising payment processes.

To find out more, read our latest report: Pushing back on Payments Fraud

Contact details:

Bradley Eccleshare
Chief Marketing Officer

M +44 0 7525 929198
T +44 0 20 3892 4928

About Optal Ltd

Optal is re-inventing how payment processes work across complex industries. By stripping payment processes of their customary inefficiency, Optal helps companies boost profitability across a growing number of sectors around the world.

Optal issues Mastercard branded payment products, driving its focus on developing and bringing to market, game-changing payment solutions. Optal’s working capital solution, Invapay, turns underutilised credit lines into a dynamic resource to manage cashflow.

“Invapay” and “Invapay solution” means Invapay Payment Solutions Limited, a private limited company in England and Wales, authorised and regulated as an Authorised Payment Institution by the Financial Conduct Authority under the Payment Services Regulations 2017 which is a wholly-owned subsidiary of Optal Limited.

Talk to us to discover how Optal can add value to your organisation.

General Enquiries: +44 (0)2038 924 928
Invapay Technical Support: +44 (0)3308 387 490

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