Why payment security matters to SMBs in Asia Pacific
In today's digital age, payment security is no longer merely a compliance checkbox – it is a strategic differentiator that builds trust with consumers and drives innovation. Stakeholders, including consumers and regulatory bodies, are now more informed and demand greater transparency from businesses, including small and medium-sized businesses (SMBs). Moreover, securing payment data is crucial for ongoing innovation. By ensuring its integrity, data can be used in innovative technologies like predictive analytics and artificial intelligence (AI) to improve the payment experience for consumers.
Digital payments drive SMB growth, but that growth also makes them more attractive targets to fraud actors. In 2023, nearly 9 in 10 SMBs used some form of digital payment.¹ Unfortunately, like other businesses, they lost an average of 3.3 per cent of their e-commerce revenue annually to fraud.²
By prioritising payment security, SMBs can not only protect their revenue but also build a robust foundation for long-term growth and consumer trust.
Obstacles to security for Asia Pacific SMBs
Fraud has always been a reality for businesses, but Asia Pacific is Phishing, refund/policy abuse, and first-party misuse are just some of the top frauds businesses in the region face.³ This increasing variety of fraud, coupled with more sophisticated tools available to bad actors, means that SMBs are more exposed to attacks than ever before. The heightened vulnerability makes it challenging for SMB owners to have peace of mind and focus on their core business operations.
Fraud is also becoming more sophisticated, posing significant challenges for SMBs in mitigating and managing attacks. They are often forced to divert time, resources, and attention away from growth and innovation to address these persistent threats. Businesses in Asia Pacific are particularly vulnerable, experiencing an average of 3.4 types of fraud in 2023. In a recent incident, a Singaporean SMB's email system was compromised, allowing an attacker to impersonate an employee and instruct a consumer to transfer funds to a fraudulent bank account.⁴ Such incidents underscore the growing sophistication of these attacks and the need for robust security measures.
Despite the growing threat of fraud, prescribing the right solutions for SMBs can be complicated due to diverse security needs. Generally, the top three operational challenges that businesses in Asia Pacific face are gaps in fraud tools, a lack of security data, and an inability to respond swiftly to emerging threats.⁵ However, varying levels of security maturity among SMBs further complicate the situation. Some SMBs lack any fraud prevention capabilities, while others have small IT teams that are overwhelmed with multiple responsibilities and may require more specialised fraud prevention training. This disparity in security readiness underscores the reality that there is no one-size-fits-all solution for fraud prevention across the board.
Outsmart today's fraud with evolving security tools and training
With the evolving fraud landscape, SMBs must adopt a multifaceted approach encompassing the latest innovations, data analysis, and customisable solutions.
SMBs can work with digital payment ecosystem players utilising innovative security technologies to stay ahead of the latest attacks and adhere to global standards. By aligning with international regulations, SMBs maintain high security against various fraud types and ensure interoperability for smooth payment flows. To help SMBs, fintechs have rolled out security platforms that offer secure payment acceptance and fraud management tools.⁶
One of the advantages of accepting digital payments is that SMBs can leverage the predictive analytics capabilities often built into the security infrastructure of the underlying payment networks
To effectively address the diverse needs of SMBs, security solutions must be scalable and adaptable to their varying levels of security maturity. These solutions should integrate seamlessly into existing systems without disrupting operations. Over the next few years, the digital payments industry will introduce more AI-powered solutions to enhance fraud and risk prevention, providing SMBs with a wider range of options.⁹ Moreover, SMBs should prioritise training and forward planning, focusing on business continuity and risk management rather than relying solely on technological fixes. This comprehensive approach enhances overall security effectiveness and resilience.
Building future-proof SMBs with robust payment security
To ensure their survival in a digital future, SMBs need to see digital payment security as a strategic imperative that drives trust, compliance, and competitive advantage. As SMBs in the Asia Pacific region increasingly adopt digital solutions, they must prioritise robust security measures to protect their operations, foster trust, and meet the higher expectations of today's informed consumers.
Strengthening payment security requires that SMBs work with the digital payment ecosystem to build robust security, get ahead of evolving threats, and ensure long-term resilience. By focusing on outcomes such as business continuity and risk management, SMBs can build a resilient security posture that anticipates and mitigates threats effectively. Ultimately, this will ensure SMBs’ long-term sustainability and success in Asia Pacific’s digital economy.
¹ Visa Asia Pacific SMB Research Regional Report, 2023
² Visa, Enhancing Small and Medium-Sized Business (SMB) Financial Security and Fraud Prevention, 2024
³ Visa, Enhancing Small and Medium-Sized Business (SMB) Financial Security and Fraud Prevention, 2024
⁴ CNA, More SMEs falling prey to scams even as many of them turn to tech like AI for solutions, 2024
⁵ Visa, Enhancing Small and Medium-Sized Business (SMB) Financial Security and Fraud Prevention, 2024
⁶ Cybersource, Payment solutions, accessed May 2024
⁷ Visa, Visa risk solutions, accessed May 2024
⁸ Visa, Visa risk solutions, accessed May 2024
⁹ Fintech News Singapore, Visa set to roll out new AI-powered fraud prevention solutions, 2024