How Finance Teams Protect Payments Without Slowing the Business

In my 30-plus years of practicing business law, I have seen Business Email Compromise (BEC) and wire fraud drain a healthy corporate bank account faster than a Chapter 7 liquidation. The tension between security and speed is the ultimate corporate tightrope. If you make payments too easy, sophisticated fraudsters will empty your treasury; if you make them too cumbersome, legitimate vendors will cut off your supply chain. To strengthen safeguards without freezing commerce, I advise clients to implement "Tiered Friction." Let automated software handle IP monitoring and velocity checks for routine, low-dollar payables. However, you must mandate a hard, out-of-band verbal verification—meaning picking up a phone and dialing a known, trusted number, never just replying to the email—for any wire transfer over a specific threshold or any sudden change to a vendor's routing instructions. Under the Uniform Commercial Code (UCC) Article 4A, if your company authorizes a fraudulent commercial wire transfer, the bank is generally absolved of liability, and the catastrophic financial loss belongs entirely to you.

The single biggest vulnerability in your payment system is not a software glitch; it is a junior accounts payable clerk who is absolutely terrified of angering the boss. Fraudsters exploit this dynamic flawlessly, spoofing executive emails with subject lines screaming, "URGENT: Wire this to the new vendor today or we lose the acquisition." The most effective practice I have instituted to get employees to spot and escalate these threats is a cultural shift I call the "No-Penalty Pause," combined with a "Catch Bounty."

I work with executives to draft a binding, written corporate policy explicitly stating that no employee will ever be fired, demoted, or even scolded for delaying a payment to double-check its authenticity—even if a seemingly furious CEO is demanding immediate action. We then pair this with a small, public reward, like a $50 gift card or a prime parking spot, for every spoofed invoice or phishing attempt an employee flags and escalates to IT. When you eliminate the paralyzing fear of executive retaliation and actively reward healthy skepticism, your accounting staff stops acting like nervous, compliant order-takers and transforms into a fierce, impenetrable human firewall.

1. Put friction in exactly the right places. The vast majority of fraud is not going to pass through your typical payment processing. The fraud tends to happen in 3 scenarios: 1) A payment is made to a new payee, 2) A vendor's bank details have changed, and 3) There is excessive urgency in a payment request. The way we've implemented verified recurring vendors (our data centers and bandwidth providers) for example, are approved for recurring payments with no additional steps required. However, any of the above scenarios trigger a callback to a phone number that the trader has previously specified - never an email address or from the payment invoice itself. It takes 5 minutes to verify or unwind a wire sent to a mule account - months to try and reverse the payment, and often the money is long gone. We also implement a 48 hour delay for any changes to a vendor's bank details prior to our processing the first payment on their behalf. They don't mind waiting a couple of days - the scam artists hate it because it kills their time-to-cash model.

2. I've told my team that I will never ask them to verify less than normal payment details (i.e., to verify less than normal payment details to meet a deadline, for a confidential deal, etc.). If anyone receives a request from me to verify less than normal payment details, this must be treated as a potential fraud and reported to the appropriate people. This single rule has been more effective than any amount of training information, because most payment scams are perpetrated by someone pretending to be your boss and it takes a lot of courage to challenge someone who is pretending to be your boss. As long as you are challenging someone who is pretending to be your boss in accordance with the procedure that I have laid out, you will have done the right thing and you should not apologize for it. Last year, someone (correctly) verified a "from Ace" request that I had sent to them. It turned out to be a lookalike domain to our normal domain name - only one letter different. A 10 second phone call had saved the money.

Having built Amazon's Loss Prevention program from scratch and trained investigators globally, I approach payment protection through an intelligence lens rather than blanket red tape.

You protect cash flow without causing friction by running automated digital intelligence and behavioral anomaly checks in the background. Legitimate transactions move instantly, while deviations in communication channels or recipient profiles get automatically flagged for targeted review.

The practice that drove our highest escalation rates was training frontline staff to quickly cross-reference open-source intelligence and social media footprints tied to unusual entities. Teaching employees to investigate the actor behind the transaction--rather than just reviewing paperwork--empowers them to spot manipulation and escalate real threats immediately.

I founded hagel IT in Hamburg in 2004, so I see these requests land in real inboxes. The sales office of an industrial group we support received a phishing email asking to change an employee's bank details for salary payments. Since then our support only accepts requests from senders on their staff list, and anything else is confirmed by phone. The rule is simple enough that nobody has to guess whether a request looks genuine. Jens Hagel, Founder & Owner, hagel IT (Hamburg, Germany)

We saw employees become more willing to report suspicious requests when we changed how we talked about mistakes. Instead of asking them to prove that fraud was happening, we encouraged them to report anything that seemed unusual. This change mattered because employees often hesitate when they worry about being wrong. We wanted them to feel comfortable raising concerns before a problem grew.

We also treated every report as useful, even when the request turned out to be harmless. A brief acknowledgment showed employees that we valued their judgment. We shared examples of near misses without revealing identities and explained what made them suspicious. This helped employees recognize unusual urgency, changed instructions, and requests to skip approval as warning signs worth checking before money moved.

Linking payment approvals to scheduling data changed how we handle refunds. Any refund over a certain amount now requires checking the attendance record. An admin recently caught a refund request from someone who hadn't attended a single lesson. Because we trained staff to verify details, that request got stopped. It's not perfect, but checking lesson history makes it easier to catch suspicious requests without slowing down real customers.

The practice that made our team more likely to flag suspicious requests was removing any hint of blame from the reporting process.

We had an incident at Pigment where someone on the team received a convincing vendor email with updated banking details. She hesitated before processing it, but what made her actually speak up was something we had established months earlier: anyone who flags a suspicious request gets thanked publicly, regardless of whether the concern turns out to be real. We made it explicit that a false alarm is infinitely better than a missed threat.

That cultural piece matters more than any technical safeguard. You can build multi-approval workflows and require dual authorization for payments over a certain threshold. We do both. But the system only works if the person who notices something wrong feels comfortable saying so immediately, even if it means slowing things down for twenty minutes.

The operational layer that keeps legitimate payments moving is simple: routine payments from established vendors with unchanged banking details go through a streamlined single-approval process. Anything involving new vendors, changed payment details, or amounts outside normal patterns triggers a secondary verification through a different channel. Not email. A phone call or video message to the actual person who supposedly requested it.

The balance is treating the safeguard as targeted friction rather than blanket friction. Protect the moments where fraud actually happens and leave everything else fast.

Putting a suspicious payments playbook right into our CRM. STOP, CALL, CONFIRM, and sample scripts. The team is identifying risky requests much more quickly. All the info and response-times needed in a single place that helps them look less out-of-their-depth when something unusual happens. Put this kind of information where team members work instead of forcing them to go hunting for it.

The secret to safeguards that don't slow us to a halt is putting controls at the point where risk is real. Payments that are high value or new get an extra eyeball, but the rest run automatically - which kept projects moving. We also drilled staff to pause on every important account change, and it's second nature now. Pen-and-paper practice scenarios helped us spot gaps we hadn't realized existed.

We favor preapproved payment lanes with clear rules for eligibility. Payments that match an established supplier, approved terms, and expected invoice patterns can move quickly. Requests that fall outside these rules should be sent for review before payment is released. This approach helps us avoid checking every transaction with the same level of care while focusing on cases that do not follow the normal pattern.

We should track why exceptions occur and fix repeated issues at their source. If valid payments are often delayed because purchase order details are missing or supplier records are outdated, we should treat these as process problems rather than fraud concerns. By correcting these issues, we can reduce false alerts and keep more time available for meaningful investigations.

Fraud attempts rarely looked suspicious on their own, they looked urgent, so the team stopped training people to spot clever tricks and started training them to pause whenever a payment request arrived with pressure attached. A simple rule was introduced: any request to change bank details or pay outside the usual process gets a quick call back to the person on a number already saved in the system, never one given in the message itself. One finance executive used it when an email, seemingly from a long standing packaging vendor, asked for a same day transfer to a new account. The call back took four minutes and exposed the fraud before a single rupee left. The company then began sharing such near misses openly each month, with no blame attached, which made people far more willing to raise doubts. Escalated suspicious requests rose 61%, confirmed fraud losses fell to zero in the following two quarters, and normal payments still cleared within the same day. Safety grows when asking a question feels easier than staying quiet.

Strong fraud safeguards depend on consistency, especially when payment teams are under pressure to move quickly. I recommend documenting a small number of nonnegotiable checks for changed instructions and making those checks easy to complete. Employees should not need to interpret a lengthy policy when a payment request is time sensitive.

The most successful reporting practice was closing the feedback loop after every escalation. Employees were told whether the request was legitimate, incomplete, or fraudulent, along with the specific signal that prompted review. That feedback sharpened judgment over time and made future reporting more accurate. It also demonstrated that escalation was not a bureaucratic detour, but a meaningful part of protecting cash flow and preserving confidence in the payment process.

Legitimate payments slow down when controls ask every employee to become an investigator. Better systems assign narrow decision rights. The requester confirms the business purpose, the budget owner confirms the obligation, and a separate record owner confirms payee details. Each check is small, auditable, and completed in parallel rather than serially.

I would also publish a one-page escalation map that shows exactly who responds within a defined window. Employees report more readily when the next step is predictable and does not depend on finding the right senior person. In large partner networks, ambiguity creates silence because people assume another team has checked. Clear routing converts that assumption into accountable action without turning routine invoices into a prolonged review.

As payment fraud risks evolve, I think the key is adding deliberate friction only where the risk is highest, rather than slowing every legitimate payment. In my work, I've learned that people often override their instincts when something appears urgent or comes from someone they trust, so any unusual request—especially one involving new payment details, a changed bank account, or pressure to act immediately—should trigger independent verification through a known phone number or established contact channel.

One practice that makes employees more likely to spot and escalate suspicious requests is using realistic scenario-based training instead of relying on a policy document. I've seen how repetition builds instinct in ballet and physical training: when you rehearse what to do under pressure, you're far more likely to respond correctly when it matters. Teams can apply the same principle by regularly walking through believable fraud scenarios and making it clear that questioning a payment is responsible behavior, not an inconvenience; that creates a culture where employees feel comfortable stopping and escalating something that doesn't look right.

For Indian SaaS clients, we set up GST and payment dashboards to flag round-number transfers and frequent credit notes. Added one rule to daily standups: discuss one weird transaction. That's it. But it worked. People got comfortable speaking up when something looked off. Keep reviews short and regular so you catch problems early without slowing down payments.

Staff get better at spotting and escalating suspicious payment requests when the training is consistent and repeated. I work in medical aesthetics, where precision and accountability in treatment protocols matter a great deal. There I've built fraud-awareness training into our routine staff meetings and tied it directly to real cases. In my clinic we regularly discuss unexpected vendor requests, emails impersonating patients, and unusual billing patterns. We go through why each one came up and how to check whether it's legitimate without hesitating. Specific lessons like these make staff more confident at recognizing red flags, the same way diagnosing skin irregularities gets easier with regular exposure and hands-on practice.

We also have a clear, "no-judgment" escalation process, so team members report concerns right away without worrying about stepping on toes. As with a client's skin health, preventing fraud means watching for small changes and acting quickly instead of waiting for a crisis.

I think this mix of regular training and the freedom to act applies in other industries too. Whether you're checking ingredient formulations for efficacy or payment flows for inconsistencies, the principle is the same. People need to know what to look for and feel free to act on it quickly.

The fastest way to prevent fraud is often to improve how unusual payments are handled. Instead of adding checks to every payment, focus on situations that need closer attention, such as a first payment, changed payment details, unusual timing, or requests that bypass normal procedures. This approach makes controls more effective by focusing on changes from trusted patterns. It also helps employees recognize when something needs further review.

Employees should be allowed to pause a payment without having to explain their concerns immediately. A simple escalation option labeled "something does not fit" helps them report concerns before dismissing their instincts. Reviewers can check the facts afterward. This process preserves early warning signs and helps the organization respond more carefully.

The safeguard is a pause that is narrow enough to be trusted. If every item disappears into an investigation, employees learn that escalation creates delay. Instead, isolate the payment instruction itself, confirm it through an independent channel, and set a standard for resolution. The invoice can remain ready, so a request is released after the uncertainty is cleared.

We improved detection by treating changed bank details like a specification change. In furnishings, a dimension or finish is never assumed to be interchangeable simply because the item name is unchanged. Employees understood the parallel. A new account number is not an administrative edit, it is a different payment destination requiring fresh evidence.

I recommend establishing a single, clearly identified reporting channel for suspicious payment requests. As part of this process, employees should report unusual payment timing, unexpected urgency, changed banking instructions, or any request to bypass the standard approval process. A simple "pause and verify" rule gives employees a clear course of action when something seems suspicious, without unnecessarily delaying legitimate payments. In developing and implementing the particular controls, finance or procurement leadership should conduct a risk assessment to see where the organization's most critical risks arise, and then design and implement controls to address those risks. Once risks or risk areas have been identified, categorized, and prioritized, it's important to consider what type of internal controls could best mitigate those risks, i.e., preventive or detective, manual or automated. You want all new supplier banking details and changes to existing details to be independently verified and approved before the change is committed. This means contacting the vendor using a trusted contact number already on file, rather than one provided in the change request, to verify the change was a legitimate request. And, you may want to set up your system so that purchasing users can enter vendor information, but only accounts payable users can approve vendors for payment, with clear separation between entry and approval responsibilities. The exact roles may vary, but sensitive changes should always be subject to appropriate independent review. Similarly, different people should be approving your invoices and payments. Developing a robust call-back process to independently verify unusual payment requests or changes to banking instructions before funds are sent is another important safeguard. Finally, give employees a secure, accessible way to report suspicious requests, anonymously or with their identity where appropriate, so concerns can be escalated promptly.

What actually worked for us was setting up a separate workstation for big payments, requiring two approvals and a callback to a verified contact before releasing funds. It caught the suspicious requests, sure, but it also made people slow down and speak up when something felt off, since the script and escalation step are built right in. Worried about speed? These checks add just a few minutes per transaction and become second nature fast.

At Akinda, we added a 'flag as suspicious' button to every payout screen. One tap and it goes straight to the risk team, no forms, no delays for normal transactions. We even ran drills in training and rewarded people for using it. That part mattered most. It made flagging feel normal instead of like you were causing trouble. When the path is that obvious and painless, people actually speak up.

To start building stronger protections against fraudulent activity, you can begin by integrating fraud prevention into your daily routine; it's not simply an additional layer of paperwork. For example, if you are a financial planner and your employees are handling sensitive client information and conducting financial transactions on behalf of clients, then a request to alter direct deposit information, rush a wire transfer, or bypass established procedures for approving purchases should raise red flags. I think that the most effective way to accomplish this is to establish clearly defined guidelines for verifying payment requests, as well as providing employees with relevant training on what to look for when identifying potential problems, how to independently confirm the legitimacy of a request, and whom to report suspicious activities to, without causing undue delays in processing routine payments.

An excellent approach is to conduct simulated phishing exercises and fake credit card scam scenarios; afterward, the findings can be discussed among your staff, rather than criticizing those who were tricked during the exercise. When employees are allowed to go through the exact steps they would take during a real event (such as calling a client at their previously established phone number to confirm any changes to their account), training is greatly enhanced. Additionally, for an SEC-regulated investment adviser, such exercises need to support compliance policy documentation and written escalation procedures. Ultimately, the objective of conducting such exercises is to make reporting potential fraudulent activities normal behavior for all employees as a means of protecting your clients and building their trust.

At Domus Lending, we only require dual approval for high-value or first-time wire transfers. Routine vendor payouts skip that step so clients aren't waiting. The rule that made the biggest difference: any last-minute account change automatically pauses the transfer and flags it for review. That one trigger caught more fraud without slowing normal payments down. Make "urgent change means stop and check" something your team just does automatically.

We gave all merchants a single fraud dashboard that flags unusual order spikes. When one client suddenly whitelisted a high-risk country, our team spotted it right away and stopped payouts before any money went out. The dashboard isn't perfect, but it lets people catch red flags fast without slowing down legitimate transactions.

Executive impersonation succeeds partly because organizations train people to respect urgency more than process. The safeguard is to establish a trusted channel for payment instructions and make every other channel provisional. An email, text, or chat message can initiate a request, but it cannot alone authorize a bank change or an off-cycle payment. That rule preserves speed because employees do not debate each message from scratch. They simply move sensitive requests to the approved channel.

I would pair it with brief practice drills using realistic messages, then publicly thank people for escalating them. Recognition changes reporting from a fear of being wrong into evidence of sound judgment.