SA businesses turn to tech to fight payment fraud

Every year, an estimated R2.2 billion is lost to cybercrime in South Africa. Reports suggest that there are 577 cyberattacks per hour in South Africa, 80% of which exploit the human element, highlighting the risk to the business of using current manual payment processes that rely on human inputting methods.

Ryan Mer, CEO at eftsure Africa, a software as a service platform that protects organisations against fraud and error before payments are made, says payment fraud is an ongoing and evolving reality in every industry across the globe: “Outdated manual processes leave loopholes for human error and are a favoured point of entry for fraudsters. Managing and mitigating these risks is a huge challenge for any business. The environment becomes even more complicated for larger organisations as information for thousands of new and existing payees are processed annually.”

The manual processes used for managing payee master data and EFT payments, and the resultant gaps left for error, leave all organisations vulnerable to payment fraud and compliance risk. Payees are often processed through several individual business units without clearly defined company-wide procedures for managing information, and the processes used rely on multiple sets of eyes reviewing manual data entries so as not to make incorrect payments to suppliers.

Workforce Holdings and it’s Group of Companies with 134 branches across South Africa faced challenges in managing cybersecurity amid multiple layers of manual processes. According to Diane Wright, Workforce National Project Manager, the company needed a secure portal to transact with its vendors. “We also required a solution that could eliminate internal changes to vendor banking details and improve efficiencies and general onboarding processes as the company’s systems were paperwork intensive and time-consuming with no real fraud prevention,” she explains.

Workforce Holdings turned to eftsure as a trusted ‘Know Your Payee’ platform provider, to protect its group of companies against payment fraud. “eftsure was able to deliver a product that we saw as beneficial to us, allowing us to verify new vendors and do real-time verification of their banking details when making payments,” says Wright.

Fighting payment fraud

1) Onboarding and managing payees

eftsure’s secure portal onboards new payees, safeguards existing information and ensures all change requests are routed back and verified by eftsure, placing no reliance on staff to manually perform these verifications. This ensures workflow efficiencies and costs savings by transforming supplier onboarding from a manual, cumbersome process with constrained verification capability to an electronic process utilising sophisticated automated verification techniques and workflow processes.

2) Screen and verify 100% of their payments before release

eftsure uses unique thumb reporting to provide real-time risks and error alerts at the point of payment prior to release. The solution gives organisations like Workforce Holdings the ability to automate, manage, control and secure the full lifecycle of a payee, from onboarding through to the actual point-of-payment with a single solution that checks and validates crucial identity details. This creates oversight and efficiencies all while reducing payment fraud and error by ensuring that electronic fund transfers always go to the intended payee.

Wright says implementing an automated payee solution has been a resounding success: “We have been able to eliminate all fraud up to this point. It has placed the onus on the vendor to provide correct information, preventing third-party intervention and enabling us to make payments timeously and correctly. The portal also allows us to verify the validity of new vendors and there is excellent turnaround time on verifications. We can verify banking details as a payment is being done, which prevents fraudulent changes – which is a helpful double verification.”

Mer adds that while robust risk management policies, data management controls and staff training can all go a long way in minimising insider threats, they are often not enough. “Today’s organisation needs the extra layer of protection against financial fraud which is only possible by automating manual controls, placing less reliance on the manual and human factor. This gives those responsible for releasing payments the confidence that processes and controls are in place and working effectively,” says Mer.