23 June 2023
Email scams in business-to-business (B2B) payments are not just costly—they're often unrecoverable.
One reported case highlights how a scam cost a business $190,000 in redirected payments.
The $190,000 Scam Example
The below is a reported scam to ACCC and listed on the government Scamwatch website (full article here: Scamwatch.gov.au)
It details exactly how this business was scammed $190,000.
"We are the victims of an email hacking scam. The scammers appear to have hacked a supplier’s email and advised us of a change in bank details. The scammers sent us invoices with amended bank details as well as the prior email trail to and from the supplier, so they must have been in their IT system. Everything was a perfect copy of a real version of the invoices we were so used to. We didn’t notice the difference.
Thinking it was real, we sent an amount of $190 000 but the real supplier never received it. The email address was also correct for the supplier, but they told us that they did not receive our responses. The scammers seem to have some way of hiding our responses from the supplier. We didn’t find out about this until our supplier contacted us via phone to talk about not receiving the money."
The scam relied on payment redirection, where scammers impersonate suppliers and trick businesses into transferring funds into fraudulent accounts.
The 1997 Tech That Solves This Problem: BPAY
BPAY, a 27-year-old payment technology, remains one of the most secure ways to avoid payment fraud.
Here's why:
Controlled Payment Redirection: Changes to BPAY payment details require supplier-initiated updates with their BPAY provider.
Validation Rules: Biller Codes and CRNs must satisfy strict check-digit rules, making them tamper-resistant.
Error Prevention: BPAY payments fail if incorrect Biller Code/CRN combinations are entered, protecting against fraud and mistakes.
Reversal Capability: Payments made in error can often be retrieved by contacting your bank.
These features make BPAY almost impervious to the payment redirection scams that plague bank transfers.
How to Protect Your Business
For Accounts Payable (AP):
Always use BPAY for bill payments whenever possible.
Automate BPAY payments directly out of Xero with tools like Parakeet, eliminating manual intervention.
If BPAY isn’t available, confirm changes to bank details with suppliers directly (not via email).
For Accounts Receivable (AR):
Set up a BPAY facility and add BPAY as a payment option on your invoices.
Remove bank account details from your invoices to minimize exposure to fraud.
Use tools to automate CRN generation, BPAY receipts, and reconciliation in Xero.
BPAY + XERO + PARAKEET = Peace of mind
This powerful combination not only simplifies payment processes but also protects your business from fraud.
With Parakeet seamlessly integrated into Xero, you can:
Automate Bill Payments: Handle BPAY and EFT payments with ease, eliminating manual intervention and ABA/BPAY file uploads.
Streamline Reconciliation: Automatically match payments with invoices and bank statements.
Reduce Errors: Minimize human error with automated processes for generating and processing payments.
Protect your money: Gain confidence that your payments are accurate and protected from fraud.
Ease of Reconciliation: Easily identify and reconcile payments to payers and invoices.
This trio gives you complete control over your accounts payable and receivable processes.
Why Not Take Action Today?
Don't wait until a scam costs your business thousands. Explore how BPAY can protect your AP and AR processes. If you're already using Xero, automating BPAY payments and collections has never been easier.
Other Alternatives
PAYID offers secure payments but isn’t as scalable as BPAY for B2B transactions yet. It’s a technology to watch for the future, but for now, BPAY leads the way.
Secure your payments. Simplify your processes. Protect your business.
About Parakeet
Parakeet is a certified financial services app in the Xero app store that automates bill payments (BPAY & EFT) and BPAY to Xero invoices.
Parakeet does not provide BPAY facilities but automates the use of BPAY out of Xero via it's integrations to BPAY & Xero.
To obtain a BPAY facility for invoices, please contact one of the participating BPAY institution, which can be found here.
See Parakeet's Xero App Store listing here.
Learn about Parakeet's BPAY options here:
For more information, contact: media@helloparakeet.com
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