Four in 10 UK businesses have been on the receiving end of payment fraud in the last year, overtaking the US, where some 35% of businesses were victims of financial crime over the same period.
According to the Bottomline Business Payments Barometer, payment fraud in the US has remained at a relatively consistent 35% (2022: 37%), whereas the UK has experienced a marked increase.
However, as the graphs above illustrate, there are significant differences in the level of fraud in the US experienced by different sized organisations. While 46% of ‘enterprises’ (companies with more than 10,000 employees or a turnover of more than $675m) had been hit by fraud (up from 32% last year), the percentage of large companies hit by fraud fell from 46% to 32%, with a similar finding for medium-sized companies. There was a small uptick in the percentage of small companies to be defrauded (28% to 32%).
At the same time, more than eight in 10 businesses in both countries say they have had to accept new payment methods over the last 12 months.
Both UK and US businesses have ranked “keeping up to date with new payment technologies”, such as cloud payment solutions and pay-as-you-go technologies, as the biggest driver of change in their payments processes in the coming year. This trend continues to be driven by the rapid adoption of new technologies that exploded during the pandemic.
But despite the rise of new payments accepted, most finance leaders are still dropping certain payment options, with seven in 10 businesses in the UK (74%) and the US (72%) becoming stricter about the payment methods they accept.
When it comes to understanding new payment initiatives and upcoming regulations in the UK, businesses continue to show a limited understanding. Levels of familiarity are virtually the same for all the initiatives mentioned in the survey. Only 54% know at least a fair amount about Open Banking/Payment Services Directive 2 (PSD2), 50% about UK New Payments Architecture (NPA), 56% about new overlay services, and 53% about adoption of ISO 20022 formats.
Awareness of new payments initiatives is higher in the US, as seven in 10 respondents claim to have some familiarity with real-time payments (72%) and Open Banking (68%), and around six in 10 know something about the adoption of ISO 20022 formats (62%) and the California Consumer Privacy Act (CCPA) (60%).
Finally, real-time payments are gaining popularity in the UK. In the past 12 months, companies of all sizes have embraced them, with adoption up from 48% to 55%. Small businesses are also adopting real-time payments, with only 16% of small businesses stating that they have no plans to adopt them, down from 27% in 2022.
In the US, adoption is difficult to gauge since true real-time payment rails were only introduced in 2017. However, their adoption is likely to increase in the future, with the introduction of the Federal Reserve’s real-time payment system, FedNow, launching this year.
Philip Smith is editor of The Treasurer
