CreditorWatch founder Colin Porter has announced the launch of PayOK, a B2B SaaS platform designed to combat bank payment frauds.
Additionally, Porter, who also launched Avenue Bank, has received $3 million in a Series A round led by Nightingale Partners for PayOk at a $10 million valuation.
According to Porter, bank payment fraud is an increasing concern for any Australian business. “Every business regardless of size, location or industry can fall victim to bank payment redirection, internal fraud and cybercrime,” he said.
Bank payment fraud costs Australian businesses millions of dollars each year. The Australian Federal Police has warned businesses about the possibility of a Business Email Compromise (BEC) in which cybercriminals mimic suppliers in order to shift the business bank account details to their own.
More than 3,300 incidents of BEC were reported to the ACSC through its Report Cyber portal in the last year, with over half of those scams resulting in financial loss.
According to Australian federal police data, the impact of BEC scams on victims in Australia is huge, with financial losses totalling more than $79 million in the previous 12 months.
Scammers can compromise a company’s email by faking an email account or website, sending phishing emails, or using malicious software.
Last year, Levitas Capital became adevastating example of how a vicious cyber-attack might bring a corporation to its knees after its trustee and administrator approved $8.7 million in fraudulent invoices due to a fake Zoom invitation.
According to the Australian Banking Association, Australians lost more than $850 million to scammers, while payment redirection scams cost Australian businesses $128 million in 2020.
Recent ABA analysis of data showed more than 80 per cent of Australians prefer to pay bills, check account balances or transfer money online.
The use of cash is continuing to decline, with RBA data showing ATM withdrawals decreasing by 20 per cent in the year to August 2021, after falling 16 per cent in 2020.
How can PayOK help?
Many businesses continue to rely on insecure and time-consuming methods, such as requesting bank statements or confirming a supplier’s bank information over the phone.
PayOK says that it can deliver a streamlined compliance approach that would allow firms to instantly verify the correct bank details every time, with continuing monitoring alerts in case of any significant changes.
“I’m applying the same expertise from founding a credit bureau that has helped thousands of businesses get paid and reduce their credit risk, with internal banking knowledge to address payment redirection scams that are internationally becoming a critical issue,” Porter said.
PayOK intends to become an accredited data recipient under the Consumer Data Right (CDR) overseen by the ACCC which will ensure the organisation adheres to strict data security requirements around governance, system controls, testing, monitoring and reporting.
“It’s evident that payment fraud is under-reported, in many cases due to embarrassment. Businesses should not go on hoping that it doesn’t happen again, PayOK will provide better solutions for ongoing protection that will reduce risk and mitigate fraud at large,” Lindsay Phillips, Chairman and Managing Director of Nightingale Partners said.