ACH payments offer numerous benefits, but like any digital transaction, they come with potential risks. Understanding these risks and implementing robust security measures is crucial for protecting your Maryland business. Before reading ahead, be sure to check out our first and second blog in this four part series on ACH payments and how to take advantage of the cost-savings!
Common ACH Payment Fraud Threats
Unauthorized Transactions
Thieves may attempt to steal your account information to initiate unauthorized ACH payments. This can occur through various methods, including phishing scams, malware, and data breaches.
Business Email Compromise (BEC)
Fraudsters impersonate company executives, business email accounts, or trusted vendors to request wire transfers or ACH payments, often targeting businesses with a strong sense of urgency. According to the Federal Bureau of Investigation (FBI), BEC scams resulted in billions of dollars in losses for businesses in recent years.¹
Business Email Compromise/Email Account Compromise (BEC) is a sophisticated scam that targets both businesses and individuals who perform legitimate transfer-of-funds requests.¹
While the majority of these issues with payments and transfers have been observed in the real estate industries, all businesses are at risk.¹
Data Breaches
Data breaches can expose sensitive customer and financial information, making businesses vulnerable to ACH fraud. A Ponemon Institute study found that the average cost of a data breach continues to rise, to a record high of $ 4.45 million, emphasizing the importance of robust data protection measures.²
Best Practices for ACH Payment Security
Employee Education and Awareness
- Regular Training: Conduct ongoing training programs to educate employees about phishing scams, social engineering tactics, and the importance of data security.
- Strong Password Policies: Enforce the use of complex passwords and encourage employees to change passwords regularly.
- Limit Access: Implement role-based access controls to restrict access to sensitive financial information.
ACH Authentication and Verification
- Two-Factor Authentication (2FA): Require an additional form of verification, such as a code sent to a mobile device, to authorize ACH transactions.
- Vendor Verification: Establish strict procedures for verifying the identity of new vendors and updating vendor information regularly.
- ACH Positive Pay: Utilize ACH positive pay services to prevent fraudulent ACH payments.
Monitoring and Detection
- Regular Account Reviews: Monitor bank accounts closely for unusual activity or unauthorized transactions.
- Fraud Detection Tools: Implement fraud detection software to identify suspicious patterns.
- Incident Response Plan: Develop a comprehensive plan to respond to security breaches effectively.
The Role of Financial Institutions
Banks and credit unions play a vital role in ACH security by:
- Fraud Detection Systems: Implementing advanced fraud detection technologies to identify suspicious activity.
- Consumer Protection: Offering fraud protection and reimbursement programs to customers.
- Education and Awareness: Providing customers with security tips and best practices.
Vault Consulting & Payment Solutions: Your Partner in ACH Security
Vault Consulting & Payment Solutions offers comprehensive ACH payment solutions that prioritize security. Our experts can help you:
- Assess your current security measures for payment processing
- Choose the right payment processing and POS solutions for your business
- Implement best practices every step of the way
By partnering with Vault Consulting & Payment Solutions, you can protect your business from ACH-related threats and ensure the security of your financial transactions.
ACH Payment Processing - the Bottom Line
Prioritizing ACH payment security is not only essential for the protection of your Maryland business, but when you identify the right payment processor, you will save money to facilitate business growth. By implementing the recommended measures and partnering with a trusted provider like Vault Consulting & Payment Solutions, you can mitigate risks, safeguard your financial assets, sustain, and grow your business!
References
- Federal Bureau of Investigation. (2023). Internet Crime Complaint Center.
- Ponemon Institute. (2024). Cost of Data Breach Report 2024. IBM.
