Digital B2B Payments: Threats, Best Practices, and Future

The business landscape faced somewhat of a forced evolution throughout 2020. The pandemic pushed employees out of the traditional workplace and drove teams of all sizes to get creative with new avenues for effective communication. Remote work has been a growing trend for years, and we are now over the precipice of this becoming the norm rather than the exception. Other aspects of the business world followed close behind, with the digitalization of business payments becoming increasingly common.

From employee payments to vendors to e-commerce of all sorts, the volume of digital payments saw ten years of growth in the first quarter of 2020. This rapid rise is here for the long haul, and businesses of all types need to adapt and accept this reality to remain relevant and secure. While this progression shows much promise, it also comes with a handful of threats and best practices to be aware of as we push firmly toward the future.

B2B Payments Overview

The rise of digital payments in the B2B world follows a similar trajectory to the public sector. Digitized payments allow for increased convenience, rapid worldwide distribution of funds, and enhanced tracking capabilities. Paperless bills and small-scale person-to-person payments have existed for years, and this is quickly progressing into a potentially paperless e-payments economy in many ways. Some businesses have been quick to adopt this digitization, while others remain hesitant due to a lack of standards and infrastructure surrounding B2B payments. Other hurdles exist in the simple fact that many businesses are unaware of the potential positive impact payment modernization can have.

E-invoicing is one facet that is an apparent plus side to digital B2B payments. According to a white paper released by the Federal Reserve Bank of Minneapolis, businesses spend around $200 billion annually on the manual processing of invoices. These costs can be drastically reduced and streamlined for efficiency along the way by changing from manual invoicing to e-invoicing. This same paper from the Fed shows that US businesses can save $75-100 billion a year just by switching invoicing tactics.

Another business benefit of digitized payments is better access to information on consumer spending habits, analytics, and other valuable data insights. This information can prove priceless in developing effective marketing strategies, alongside the ability to mold these in an effort to increase efficacy across the board. A better understanding of the consumer has always been a valuable commodity, and digitized payments substantially modernize the effort involved toward this end. Businesses can also expect to see lower costs in other areas, fewer accounting errors, and improved cash management systems.


Even though B2B payments hold plenty of potential, several threats also surround digitization. A report by the Association for Financial Professionals (AFP) shows that 78% of businesses had to contend with B2B payments fraud or fraud attempts in 2020. Many of these fraud attempts seem to come from compromised business emails attempting to exploit payment channels within the business. This threat involves an outside source trying to access a business’s payment processes to dish out fraudulent payments or obtain other information.

Another more internal threat exists within B2B payments in the shape of the Purchase to Pay (P2P) process. P2P connects the supply chain and procurement processes of a company for increased efficiency. It allows for quick management of internal fulfillment of goods sold to vendors and relationships with suppliers. It also creates opportunities for internal fraud, such as cooked books, stolen assets, and even bribes. Company personnel with access to financial records are often culpable for this type of fraud, and it can often go unnoticed.

Data breaches are also an ever-present threat surrounding B2B payments, whether they have been digitized or remain in physical format. A breach can expose company and consumer financial records, allowing cybercriminals to gain access to valuable data that can be used to commit identity theft and other forms of fraud. These breaches can lead to a loss of consumer trust, ongoing legal issues, and substantial costs associated with rectifying the situation and improving cybersecurity.

Best Practices

While some businesses remain hesitant to go all-in with digitized payments, this modernization proves to be one of the best methods to reduce the threat of B2B payments fraud. Of the nearly 80% of businesses that experienced direct or attempted B2B payments fraud in 2020, manual invoicing and paper checks were a major cause for this. These forms of payment are less secure overall than are their digitized counterparts and moving away from the old norms is one way to establish enhanced protection against fraud.

Training and educating employees to identify business email compromise is another recommended best practice. This training can help employees spot and report phishing and spear-phishing attempts that can lead directly to B2B payment fraud. A growing number of businesses include this awareness training in their onboarding processes to substantial effect. Verification of any changes to invoice information, bank deposit account numbers, and contact information can also limit the chance of a fraudulent payment being sent.

Data breach defenses and identity theft restoration coverage are must-haves for any business, as well. By having these defenses in place, you ensure that your business is prepared and equipped to handle any potential data breach and limit its effect on your company and customers if such an event does occur. Some larger companies are equipped to deal with security breaches, but most businesses stand to benefit significantly by having external specialists on-call to support and guide the organization through the restoration process while limiting the scope of damages.


The digitization of B2B payments is here to stay. Quickly modernizing your business to accommodate this reality is one way to stay ahead of the curve and to help improve efficiency and security. This transition does not need to be complicated, and the benefits are readily apparent. By following the best practices mentioned here and preparing to advance the prevailing business environment, your organization can stay in tune and on point into the future.

LibertyID is the leader in identity theft restoration, having restored the identities of tens of thousands of individuals without fail. If you retain personal information on your customers, now is the time to get data breach planning and a response program in place with our LibertyID for Small Business data breach preparation program. With LibertyID Enterprise you can now add value to existing products, services, or relationships by covering your customers, employees, or members with LibertyID’s fully managed identity theft restoration service – at a fraction of our retail price – with no enrollment and no file sharing. We have no direct communication with your group members – until they need us.

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