Education in B2B Payment Fraud Prevention: Practical Insights for Payment Leaders
Fraud prevention in B2B payments is complex, requiring more than advanced technology—it depends on well-informed teams who can identify suspicious activity early. Financial losses from fraud in B2B transactions are rising as schemes grow in sophistication, yet many fraud tactics remain straightforward and are easily preventable with proper education.
In fact, human error or oversight is often what lets fraudulent activity slip through unnoticed, underscoring the need for proactive fraud prevention education.
According to a report from the Association of Certified Fraud Examiners (ACFE), organizations lose an average of 5% of revenue annually to fraud, with billions lost globally across sectors. A significant portion of fraud losses in B2B settings comes from business email compromise (BEC), fake invoicing, and phishing schemes that rely on exploiting employees' lack of awareness.
In this article, we’ll dive into how fraud education empowers teams to detect red flags early, incorporating real-world examples and practical UX strategies that create a culture of vigilance. These practical approaches help payment leaders develop a proactive defense against fraud by empowering employees to act as frontline defenders.
Understanding Common B2B Fraud Tactics—and How Education Can Help
Many types of B2B fraud are, surprisingly, “simple” in nature, relying on employees overlooking minor inconsistencies or unfamiliarity with security protocols. According to Trustpair, about 43% of B2B companies reported falling victim to fraud in 2023, with a considerable portion of these cases attributed to basic mistakes and lack of awareness.
Here are some of the most common tactics and how a UX-driven, education-focused approach can mitigate risk:
Business Email Compromise (BEC) Fraud
BEC fraud is a classic scheme where attackers impersonate a company executive or a vendor, instructing employees to transfer funds urgently.
According to IBM's Cost of a Data Breach 2024 report, BEC scams are the second most expensive type of breach, costing an average of USD 4.89 million
UX Insight: To counter BEC fraud, UX designers can incorporate visual cues and verification prompts within payment systems.
For instance, when an email or payment request appears urgent or requests a change in vendor banking details, an in-app prompt can encourage employees to “Verify with Finance” before proceeding.
Additionally, setting up in-app alerts for transfers above a certain amount, requiring multi-step verification, can reduce reliance on employee judgment alone.
Invoice Fraud and Fake Vendors
Invoice fraud often involves submitting fake invoices or manipulating vendor information to redirect payments. A favorite for fraudsters, invoice fraud costs the average company $1M per year.
This relentless assault on accounts payable departments not only drains financial resources but also undermines trust and operational efficiency.
UX Insight: Payment platforms can build vendor verification steps directly into workflows. For example, when a new vendor is added, the system can prompt the employee to input a verified contact or request cross-verification with another department.
Additionally, showing a “trusted vendor” label after a vendor has been verified multiple times helps employees feel confident in legitimate transactions while staying alert for new or unverified vendors.
The Role of Ongoing Education in Fraud Awareness
Building a fraud-aware culture in B2B settings requires continuous reinforcement, not one-time training. Employees need to understand the “why” behind each security step and feel empowered to question unusual activity. Here’s how companies can integrate fraud awareness into their daily practices effectively:
Regular Fraud Training
Training sessions shouldn’t focus solely on company policies but should include real-world examples of fraud attempts relevant to the company’s operations. For instance, sharing case studies of similar businesses that have experienced BEC or invoice fraud helps employees relate to the threats directly.
Additionally, refresher courses every quarter help employees stay updated on new fraud trends.
UX Insight: Fraud training materials should be accessible within the payment platform. Adding a “Fraud Resources” section that includes the latest fraud tactics and prevention tips enables employees to review these materials during downtime.
Simulated Fraud Scenarios
Periodic phishing simulations and mock invoice fraud scenarios allow employees to practice identifying red flags without actual risk. These simulations help companies assess where employees may need further training and reinforce what they’ve learned.
According to a study by KnowBe4, companies using simulated phishing scenarios saw a 67% reduction in susceptibility to phishing among trained employees.
Incorporate “Learning Mode” directly into payment interfaces, where employees can see pop-up tips during mock scenarios, helping them understand how to identify signs of fraud.
For example, a notification might explain why a suspicious-looking email sender's address could indicate phishing, reinforcing learning in a real-world context.
Transparent Reporting Mechanisms
Encouraging employees to report suspected fraud without fear of repercussions is essential in fostering a fraud-aware environment. When employees feel safe to report their suspicions, fraud can be intercepted early, preventing major losses.
UX Insight: Add a “Report Suspicious Activity” button in both the email and payment interfaces. Simple UX choices like this make reporting accessible and encourage participation, creating a culture where everyone plays a role in fraud prevention.
The Synergy of UX Design and Fraud Education
While advanced detection technology is vital, its impact is maximized only when employees understand and follow best practices. Education enhances this synergy by aligning employees’ actions with system capabilities, making fraud prevention a collaborative effort.
Here’s how UX-driven educational strategies complement technological defenses:
- Just-In-Time Learning: Instead of overwhelming employees with extensive training, in-context learning—such as tooltips, prompts, and alerts—can reinforce fraud prevention.
For example, when an employee initiates a large transfer, an automatic prompt reminding them to verify vendor details can reinforce best practices in real time. - Human-Centered Alerts: Fraud detection alerts should be understandable at a glance. Instead of technical jargon, alerts can use plain language, such as “New vendor details—verify authenticity before proceeding.”
This simplicity empowers employees to make quick, informed decisions. - Behavior-Based Prompts: If an employee starts deviating from typical transaction behavior, such as transferring an unusually high amount or adding multiple vendors, the system can prompt them to confirm the activity with a supervisor.
These UX interventions use employees’ daily patterns as benchmarks, alerting them to potentially risky behavior.
Actionable Steps for B2B Payment Leaders to Embed Fraud Awareness
For B2B payment leaders, investing in fraud education isn’t just about reducing financial loss; it’s about building trust with partners, suppliers, and clients. Here are steps you can take to foster a fraud-aware workforce:
- Develop Regular Training Programs
Fraud schemes evolve, so training must be ongoing. Tailored programs that include real-world examples relevant to your industry and refresher sessions ensure that employees stay vigilant. - Leverage Technology to Support Human Judgment
Equip teams with fraud detection tools that provide contextual alerts and easy reporting features. Employees need to understand these tools, so integrate training on system functions and alert interpretation into fraud education. - Cultivate a Transparent Reporting Culture
Establish open communication for reporting suspicious activity. Making fraud prevention a shared responsibility encourages employees to stay alert without fearing repercussions. - Simulate Fraud Scenarios and Provide Real-World Context
Mock fraud scenarios allow employees to experience red flags in a low-risk environment, reinforcing what they’ve learned. In conjunction, make “learning on the job” accessible through in-app cues and alerts.
The Business Case for Proactive Fraud Education
Embedding fraud awareness into a company’s culture builds a durable line of defense. By investing in a robust educational program, businesses don’t just protect their finances—they create an environment where vigilance is everyone’s responsibility.
This proactive approach reduces long-term fraud risks, bolsters relationships with vendors and clients, and positions the company as a reliable, security-conscious partner.
Next Steps with WDIR
If you’re ready to take fraud prevention to the next level, consider partnering with WDIR, the global leader in B2B payments UX.
Our expertise in B2B payment UX ensures that your team has the insights and tools they need to become active participants in fraud defense. Get in touch today!
