Failed payments are costing your business more than you think: Here’s how to fix it
October 23, 2026Disclaimer:
This blog offers general guidance based on information available at the time of publication. For the most up-to-date details, please contact Netcash or other service providers directly.
Payment fraud doesn’t always look suspicious. For example, you receive an invoice from a supplier you’ve used for years. The invoice looks legitimate, and banking details arrive from a familiar email address. You approve the payment, only to find the bank account has changed.
In many cases, payment fraud happens within established business relationships and processes. A business may work with a supplier for years, trust employees to handle payments, and follow set procedures, yet fraudsters can still exploit one part of that process. A fraudulent invoice, impersonation, or change of banking details can turn an otherwise routine payment into a major financial loss.
For finance teams, preventing payment fraud means looking beyond whether a payment has been properly authorised. You also need to check who is requesting payment and why. This is where fraud detection and payment verification become important parts of fraud management.
This guide explores the common payment fraud risks facing South African businesses today and provides a practical checklist that your finance team can use before releasing payments.
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What is payment fraud management?
Payment fraud management uses processes, security controls, and technology to detect, prevent, and respond to fraudulent or suspicious transactions, ideally before funds leave an account.. It is a multi-layered approach that covers the entire payment process, from onboarding a beneficiary and receiving an invoice to approving and processing the payment.
A strong approach typically includes four layers:
- Prevention: Controls that make fraudulent payments harder to initiate
- Verification: Checks that help verify the legitimacy of the requester, transaction, and beneficiary details
- Detection: Monitoring that helps identify unusual or suspicious activity
- Response: Processes for escalating, investigating, and responding to suspected fraud
Common payment fraud risks in South Africa
Payment fraud can take several forms, and different scams can overlap.
Some of the risks and payment fraud trends your finance team should be aware of include:
- Supplier and beneficiary fraud: A fraudster impersonates an existing supplier or provides fraudulent banking details so that a legitimate payment is redirected
- Invoice fraud: A fake, altered, or intercepted invoice is submitted for payment. The invoice may contain genuine company information, making it difficult to identify without additional checks
- Business email compromise: A fraudster gains access to or impersonates a legitimate email account and uses it to request payments, invoices, or changes to banking details
- Impersonation scams: Someone poses as a supplier, executive, customer, or trusted contact to persuade an employee to make a payment or bypass normal procedures
- Authorised payment fraud: An employee is manipulated into approving a payment that appears legitimate but ultimately sends funds to a fraudster
- Account takeover: Criminals gain access to systems, credentials, or accounts and use that access to initiate or manipulate transactions
Verification checks finance teams should perform: A checklist
A consistent verification process can help you identify suspicious payments before funds leave the business. Not every transaction needs the same level of scrutiny. Routine payments need a basic check. New suppliers, changes to beneficiary information, unusual payment requests, and high-value transactions deserve closer attention.
Here’s a simple fraud prevention checklist to follow before approving payments:
1. Confirm who requested the payment
Start by checking who is requesting the payment and whether the request matches your existing records. Check names, banking details, invoice numbers, and other data that you have on file.
Be cautious if:
- The request comes from a new or unfamiliar email address
- A supplier suddenly changes their usual payment process
- An employee receives an unexpected urgent payment instruction
- The request asks you to bypass normal approval procedures
- The requester insists that the payment must be made immediately
Don’t assume an email is proof that a request is genuine. If you need to confirm a payment or sensitive change, use official contact details you already have on file rather than information supplied in the new request. Call the beneficiary or ask the account manager to be sure.
2. Check the invoice and transaction details
Before approving a payment, check whether the transaction makes sense. Compare the invoice against relevant records, such as the purchase order, contract, supplier profile, or expected payment amount.
Look for:
- Unexpected changes in payment amounts
- Duplicate invoice numbers
- Unusual descriptions or payment references
- Requests that don’t match the supplier’s normal billing pattern
- Invoices for goods or services that weren’t ordered
Keep in mind that a real supplier can still be used to commit fraud. For example, a compromised email account could be used to send you a convincing invoice from one of your suppliers. That’s why checking the invoice alone isn’t always enough; your finance team should also verify the payment recipient and account details as standard, every time.
3. Verify any changes to beneficiary details
A request to change a supplier’s banking details should be treated as a high-risk event. Don’t update a beneficiary record simply because the request appears to come from the supplier. Instead, independently confirm the change using trusted contact information you already have.
Your process could require:
- Direct confirmation with an established supplier contact
- Verification of the new account details
- A second employee to review and approve the change
- A record of who requested, verified and approved the update
This is particularly important because fraudulent account-change requests can look like normal supplier communication. The supplier itself may be genuine; the only fraudulent element may be the new bank account.
4. Verify the beneficiary’s bank account
Before releasing a payment, you should be confident the account receiving the funds belongs to the intended beneficiary. Bank account verification adds an extra layer of protection by checking beneficiary account information before making a payment.
This can be particularly useful when:
- Onboarding a new supplier
- Paying a beneficiary for the first time
- A supplier has requested a banking-detail change
- Making a high-value payment
- A transaction falls outside the supplier’s normal payment pattern
Account verification shouldn’t replace other controls. Instead, it can complement supplier checks, invoice reviews and payment approvals.
For businesses looking to add account verification to their payment controls, Netcash Risk Reports includes an Account Verification Service designed to help verify bank account information and reduce the risk of incorrect or potentially fraudulent beneficiary details.
5. Apply the right approval and escalation controls
Verification shouldn’t end with one employee deciding whether a payment looks legitimate. You can reduce risk by setting clear approval rules based on a transaction’s value, type, and risk.
For example, your controls could require additional approval for:
- New beneficiaries
- Changes to existing bank account details
- High-value payments
- Unusual or urgent transactions
- Payments that don’t match established supplier patterns
Finance teams should also know what to do when a check fails. If something doesn’t match, don’t release the payment simply to meet a deadline. Stop the transaction, investigate the discrepancy and escalate it to the appropriate person or team.
If you suspect fraud, preserve relevant records such as emails, invoices, and payment information, and follow your business's incident-response process.
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The rise of authorised payment fraud and impersonation scams
Traditional ideas about payment fraud often focus on criminals gaining unauthorised access to accounts or payment systems. However, businesses also face situations where a legitimate employee is manipulated into making the payment themselves.
What is authorised or push payment fraud?
Authorised payment fraud occurs when a person is tricked into authorising a payment to a fraudster. The payment therefore appears legitimate from a technical perspective as the misled individual logged in correctly, followed the payment process, and authorised the transaction.
Push payment fraud takes many forms, including impersonating legitimate actors such as your bank, creditor, or government agencies.
For businesses, a fraudster might pose as:
- A company executive requesting an urgent payment
- A supplier requesting a change to banking details
- A customer asking for a refund to a different account
- A service provider submitting a new invoice
- Another employee asking for a payment to be processed outside the usual procedure
These attacks often rely on social engineering rather than technical vulnerabilities. They typically involve urgent requests for immediate payment, making them difficult to reverse once the funds have been transferred.
How authorised payment fraud affects businesses
The immediate impact is lost funds, but the consequences can extend further.
A fraudulent payment may result in:
- Lost working capital
- Time spent investigating and attempting to recover funds
- Disruption to supplier relationships
- Additional administrative and legal costs
- Pressure on finance teams and management
- Reputational damage if customers or suppliers are affected
The risk is significant because a payment can pass through normal approval processes while still being fraudulent. That is why finance teams need controls that assess who is being paid and whether the payment makes sense, not only whether it was technically authorised.
How to prevent fraudulent account changes
Changing a supplier’s banking details can create a significant payment risk because the fraud may be hidden inside an otherwise legitimate business relationship.
What is account change fraud?
Account change fraud occurs when a fraudster convinces a business to replace a legitimate supplier’s banking details with an account the fraudster controls.
For example, a criminal may impersonate a supplier and send an email saying that the supplier has changed banks. If the finance team updates the beneficiary record without independently verifying the request, future payments could be sent to the fraudulent account.
A compromised supplier email account can make this difficult to identify. The message may appear to come from a genuine supplier and may even fit naturally into an existing conversation.
The role of bank account verification in reducing payment fraud risk
Bank account verification can add another layer to a business’s payment controls by helping finance teams check beneficiary information before releasing funds.
What is bank account verification?
Bank account verification is a process used to check information associated with a bank account and confirm it matches the expected beneficiary.
For a finance team, this can help answer an important question before payment:
Does the account we’re about to pay correspond with the beneficiary we believe we’re paying?
This is useful when onboarding suppliers or responding to changes in banking information. It’s important to understand what account verification does and doesn’t do. Verification is a risk-reduction measure, not a guarantee that it will identify every fraudulent payment.
It works best as part of a broader process that includes supplier due diligence, invoice checks, approval controls, and employee awareness.
Why supplier and beneficiary verification matters
Supplier verification helps you establish confidence in who you are dealing with. Beneficiary verification takes that a step further by checking the payment destination. This distinction matters because a fraudulent payment doesn’t always involve a fake supplier.
A fraudster could impersonate a legitimate supplier, intercept genuine communication, or manipulate an employee into paying the wrong account. In each case, you may believe you’re paying a legitimate supplier while the funds are actually being directed elsewhere.
Verifying beneficiary details can provide an extra checkpoint before money leaves the business.
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Frequently asked questions about payment fraud prevention solutions
Build stronger payment fraud prevention controls with Netcash
Payment fraud prevention isn’t about relying on one security measure. You need layers of protection that help verify payment requests, suppliers, and beneficiaries before funds leave.
That means combining payment procedures with invoice checks, approval controls, verification, and the right technology. Bank account verification can form an important part of that process, particularly when onboarding suppliers or responding to changes in beneficiary details.
Netcash Risk Reports provides businesses with risk-management tools, including an Account Verification Service that helps finance teams strengthen payment verification processes.
Looking to reduce payment risk before funds leave your business?
Contact us to explore Netcash Risk Reports and strengthen your account verification process.
Author:
Aqeelah Japie
Client Onboarding Manager
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Aqeelah Jappie is a Client Onboarding Manager at Netcash with over 10 years of experience in the financial services and payments space. She’s passionate about creating smooth, stress-free onboarding experiences and helping clients feel confident from day one. With a strong focus on KYC and end-to-end onboarding, she makes sure everything runs seamlessly behind the scenes. She enjoys working closely with clients to set them up for long-term success.
Disclaimer:
This blog offers general guidance based on information available at the time of publication. For the most up-to-date details, please contact Netcash or other service providers directly.
