As more business is transacted online, identity theft is increasingly a threat. From email spoofing to fake domains, cybercriminals are deploying sophisticated schemes around the world. With fraudsters continuing to refine their tactics to get around traditional security measures, it’s becoming more challenging for businesses to detect and prevent. Even vigilant merchants find themselves vulnerable as a recent Experian survey highlighted over half of businesses say their losses due to fraud increased in 2024. The risk is even greater in the business-to-business (B2B) space where transaction volumes are typically higher.
For security leaders, the challenge extends beyond immediate financial losses to lasting reputational risk. As almost all U.S. companies face at least one payment fraud attempt annually, organizations must adopt a multi-layered defense strategy that balances security with seamless payment experiences that modern B2B buyers demand. Let’s look at a few ways B2B business leaders can stay a step ahead of fraudsters.
1. Avoiding financial and reputational damage
There are two main types of damages businesses face following cybersecurity attacks: financial and reputational. The financial impact can be harsh and often irreversible as organizations are not always able to recoup stolen funds. An IBM report found the average cost of a data breach in 2024 amounted to $4.88M for affected businesses. As fraud becomes more sophisticated, insurance providers and financial institutions are tightening policies. For example, many cyber and security insurance policies no longer cover wire or payment fraud.
When a buyer is impacted by financial loss, reputational damage often follows. Almost three-quarters of consumers say that they wouldn’t trust a company following a data breach. This could be the same for partners and suppliers who lose trust in a business that has failed to protect its operational integrity – leading to a negative impact on stock prices, employee morale and recruitment and lost business opportunities. Compounding this risk, stolen data is often resold and reused, leading to repeated attacks and a lack of control over sensitive information.
2. Adding appropriate identity checks
Cybercriminals have become more and more clever at impersonating legitimate businesses. From simple schemes like email spoofing to more advanced techniques like creating fake domains and setting up shell companies to get around traditional security measures. Some criminals go as far as to hijack dormant or recently inactive businesses to make their scams appear more genuine. With this level of deception, even the most cautious merchants can be deceived by these scams.
Staying ahead of these attacks begins with strong verification measures. Businesses should integrate email authentication protocols to prevent spoofing and unauthorized domain. Implementing multi-factor authentication, including identity verification, for financial transactions can also add an extra layer of protection. Especially since the attackers often have minimal information beyond the email domain itself, so they rely on deception to prompt quick responses. It’s estimated that more than 90% of successful cyberattacks start with a phishing email, so multi-factor authentication can slow down the process to help defend against quick deception.
3. Offering security without compromising experience
While strong security measures are table stakes, they can sometimes create unwanted friction for buyers. For instance, overly strict security measures can lead to cart abandonment and lost sales. In B2B, buyers expect smooth, flexible payment experiences. A recent study around the value of convenience at checkout shared 78% of global B2B buyers believe invoicing is a must, and 51% would switch to a different merchant if they offered flexible net terms (30-, 60-, 90-days to pay).
This payment flexibility can’t come at the cost of disrupting the customer’s experience. Smart fraud detection running behind the scenes can spot risky transactions without slowing down buyers at checkout. Simple rules like shipping only to confirmed business addresses and blocking last-minute delivery changes help prevent scams while keeping things smooth for legitimate buyers. But as merchants have different shopper profiles and behaviors, it’s important to look for payments technology solutions that do not take a one-size-fits-all approach. Your buyer is unique and should be treated as such.
4. Keeping up with evolving fraud risks
Fraud prevention is no doubt an ongoing challenge. As fraudsters refine their tactics, businesses find themselves in a constant race to adapt and protect sensitive information. It can be a tough spot for internal security teams, who are often overworked and under-equipped to tackle these evolving threats.
To help understand where there may be gaps that will allow bad actors to infiltrate, merchants should work with fraud prevention experts to offer the expertise needed to safeguard emerging threats. Third-party experts further strengthen defense mechanisms by providing real-time risk assessments, credit decisioning and continuous transaction monitoring. Automating B2B payments and invoicing, for example, can also strengthen security by protecting sensitive data. These systems rely on encryption and secure payment processing for long-term protection.
Nearly all merchants have experienced revenue loss because of fraud. In the face of increasing business identity theft, having the right processes, technology and knowledge will help B2B merchants stay ahead of fraudsters. By adding appropriate identity checks and flexible, secure payments options, security leaders can help companies avoid financial and reputational damage in the long run.
