Business owners increasingly worry about payment fraud, survey shows

People working at a gelato shop serve customers in New York on February 18, 2024.  (AP Photo/Ted Shaffrey, File)

NEW YORK — Small businesses are increasingly concerned about payment fraud.

That’s according to a small business survey from regional bank KeyBank. Nearly 2,000 small-to-medium-size businesses with annual revenue of less than $10 million were surveyed.

The top concern among survey participants was payment fraud of various types. Forty-four percent were worried about unauthorized transactions or unauthorized electric fund transfers; 37 percent were concerned about identity theft; 28 percent said malware and ransomware attacks were their biggest concern; and 27 percent were worried about phishing and email scams.

“With the introduction of new technology over the last several years, small businesses are some of the many that have fallen victim to fraudulent activity,” said Mike Walters, president of Business Banking at KeyBank. He stressed the importance of owners having a plan in place to combat fraud.

READ: Scammers took consumers for $8.8 billion in 2022

Aside from fraud, the survey found that the top three anticipated economic challenges in the coming months were high overhead costs, delayed payments from clients or customers, and fluctuating revenue.

But businesses remain confident in their ability to weather challenges, with 65 percent of small business owners saying they feel confident they could fund their operating expenses for one month with their cash reserves if an unexpected need arose.

Small business owners’ “resilience is a testament to years of weathering financial uncertainty, and with their confidence remaining strong, they’re able to power through the last leg of inflation and keep themselves on track for economic growth,” Walters said.