Five Payment Security Tips for Small Businesses

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Did you know that according to the Association of Certified Fraud Examiners (ACFE) fraud affects close to one third of all small businesses? While fraud can take various forms such as employee corruption — cyber crime — including credit card abuse, has been cited as one of the top sources of fraud in small businesses. Indeed, a casual approach to payment security could put you out of business within a matter of weeks.

  • Financial Losses — Small businesses are disproportionately affected by fraud and as a result have a much more difficult time bouncing back from attacks. In fact, direct expenses for just one data breach total a whopping $38,000 on average.
  • Reputational Damage — Data breaches can do irreparable damage to a brand’s image causing previously loyal customers to think twice before doing business with your organization in the future. Of course, there are also spillover effects as it relates to attracting new talent not to mention your ability to secure financing from suppliers or investors.
  • Other Costs — Smaller organizations also tend to face an uptick in indirect costs to the tune of $8,000 as a result of fraud. This may take the form of higher insurance premiums, for example.

Best Practices for Minimizing Payment Fraud

With a good understanding of the consequences, it’s time to implement sound policies to reduce the potential for payment fraud:

PCI Compliance

No matter the size of your small business, if you accept credit or debit cards, then you must follow the guidelines laid out by the Payment Card Industry Data Security Standards, or PCI DSS. Noncompliance often results in steep fines and in some cases revocation of the privilege to accept credit card payments going forward. Regular PCI scans are also highly recommended for every business. For more information, be sure to visit the PCI website.

Encrypt Your Data

According to Tech Target, “Data needs to be protected at all points, end-to-end, from the moment the transaction is initiated and through the processing network to truly be effective.” This is known as encryption. Think of this as an additional layer of protection that ensures confidential customer data remains private. Data encryption should be used on your e-commerce website as well as your email platforms.

Gain Employee Buy-in

Here are some tips to keep in mind:

  • Create an internal system of checks and balances that is communicated from the top down.
  • Mandate staff to update their passwords at regular intervals, implementing a minimum complex character requirement e.g. at least one upper case letter, special character and a number.
  • Educate your employees on the need for vigilance in identifying suspicious activities or transactions.

Protect Your Network
You can help guard against fraud by updating your network security systems on a regular basis. Firewalls and antivirus software are an excellent starting point.

However, according to Entrepreneur Magazine, “having a firewall solution can help decrease these threats, but you should also consider setting up an intrusion-detection systems/intrusion-prevention systems (IDS/IPS)” in order to “monitor and block any malicious traffic.”

Don’t Accept Paper Checks

The prior four best practices relate to online transactions, but check fraud is also an issue that plagues small business. It’s time to make the switch from paper checks to Paynote.With Paynote you can send and request verified digital checks to anyone with via email. Send or receive by simply entering your recipients name, email, amount, and description.  Your recipient will verify their bank account and Paynote will transfer the funds. No apps to download or account required. You don’t need to know your recipients bank info and they don’t need to know yours. This means more security for you and them. A simple secure bank to bank transfer.

Because Paynote by SeamlessChex integrates with over 2500  banks, we have the ability to confirm account ownership and funds on all transactions. Business owners can rest assured that they are taking all measures to reduce the likelihood of check fraud when they use Paynote..

For more information about the ways SeamlessChex and Paynote can benefit your small business, and to sign up to send and receive verified digital checks visit our website today.

Right payment solution for you infographic

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