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How to prevent fraud in B2B BNPL transactions

A practical look at common fraud patterns in B2B transactions and the controls that help merchants manage them.

29 October 2024 2 min readPastPay editorial team

In brief

A practical look at common fraud patterns in B2B transactions and the controls that help merchants manage them.

Published on 29 October 2024. This article is educational and may reflect the market context at publication. Current PastPay availability, pricing and terms are defined by the product pages, individual proposal and the terms shown before confirmation.

B2B deferred-payment transactions combine company identity, authorised representatives, delivery and payment. Fraud prevention therefore needs more than a single credit check: it must connect company verification, user verification, transaction monitoring and proof of fulfilment.

Common fraud patterns

  • Identity misuse: someone attempts to buy in the name of a real company or representative.
  • Phantom companies: a business with little or no genuine activity places a high-value order.
  • Account takeover: an unauthorised person gains access to an existing buyer profile.
  • Misrepresented financial information: documents or data overstate the applicant’s ability to pay.
  • Burst-out behaviour: several normal transactions are followed by a sudden unusually large order.
  • Fulfilment disputes or collusion: the order, delivery or underlying commercial event is not genuine.

KYB and representative verification

Know Your Business checks help confirm the company, while identity and authority checks help confirm the person acting for it. Company-register data, ownership and representation information, official documents and suitable verification steps work together to reduce impersonation risk.

Verification is not a one-off event. A new delivery address, an unusual basket, repeated attempts or behaviour that differs from the company’s history can justify further review.

Transaction and fulfilment controls

Before approval, the buyer information, delivery destination, order content and transaction history should be considered together. Higher-risk cases may require manual review. Linking payout to evidence of genuine fulfilment also helps ensure that money moves only for a real commercial transaction.

What merchants should ask a provider

  1. How are the company and its representative verified?
  2. Which transaction anomalies trigger additional checks?
  3. When is manual review or more documentation required?
  4. How are delivery disputes and suspicious destinations handled?
  5. Which approved non-payment risks are covered, and under what contractual conditions?

The practical takeaway

Good fraud prevention adds friction where risk is unusual without making every genuine purchase unnecessarily difficult. The current merchant agreement and transaction rules define the exact controls and responsibilities.

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