Preventing Invoice Redirection Fraud in 5 Critical Steps

In today’s interconnected global economy, finance managers face an array of challenges when it comes to safeguarding international payments and receivables.

Among these challenges, one that stands out as a growing concern is invoice redirection fraud. This insidious scheme involves cybercriminals manipulating legitimate payment processes to divert funds intended for legitimate suppliers into their accounts.

For finance managers responsible for overseeing transactions across borders, the threat of invoice redirection fraud looms large. In this article, we will delve into five critical steps that can be taken to fortify your defenses against this type of fraud, providing peace of mind and ensuring the security of your international financial operations. 


Step 1: Strengthen Internal Controls 

An essential foundation for preventing invoice redirection fraud is the establishment of robust internal controls.

Finance managers should meticulously scrutinize existing processes, identifying potential vulnerabilities that fraudsters could exploit. Implement strict authorization protocols for any changes to payment details, such as bank account numbers and beneficiary names.

Regularly review and update access controls to sensitive financial systems, ensuring that only authorized personnel can modify payment instructions.

By fostering a culture of vigilance and adhering to stringent control mechanisms, you can significantly reduce the risk of unauthorized alterations to payment instructions. 


Step 2: Implement Two-Factor Authentication (2FA) 

One of the most effective deterrents against cybercrime is the integration of two-factor authentication (2FA) into your payment workflows.

Require dual authentication from both the supplier and your finance department before altering payment details or initiating fund transfers.

This additional layer of security significantly hampers fraudsters’ ability to manipulate payment instructions, as they would need access to multiple authentication factors. 2FA can be seamlessly integrated into your payment platforms, providing an extra level of confidence when processing international transactions. 


Step 3: Conduct Regular Supplier Verification 

Fraudsters often exploit the lack of due diligence in supplier verification to perpetrate invoice redirection fraud.

Finance managers must institute a stringent supplier verification process, including cross-referencing bank details and conducting thorough background checks.

Establish a direct line of communication with suppliers to confirm any changes to payment instructions. By adopting this proactive approach, you can minimize the risk of falling victim to fraudulent supplier impersonation and payment diversion. 


Step 4: Heighten Employee Awareness and Training 

A well-informed and vigilant workforce is an organization’s first line of defence against invoice redirection fraud.

Finance managers should conduct regular training sessions to educate employees about the tactics employed by fraudsters and the warning signs of fraudulent activities. Foster a culture of skepticism when it comes to altering payment instructions, emphasizing the importance of verifying changes through established channels.

By empowering your team with the knowledge to identify and report suspicious activities promptly, you create an atmosphere where fraudulent attempts can be thwarted before they cause harm. 


Step 5: Leverage Advanced Fraud Detection Technologies 

In the digital age, harnessing cutting-edge technologies is paramount to preventing invoice redirection fraud. Embrace advanced fraud detection solutions that employ artificial intelligence and machine learning algorithms to analyse transaction patterns and identify anomalies. These systems can swiftly flag unusual payment behaviours, enabling finance managers to take immediate action.

Additionally, consider utilizing blockchain technology to create an immutable record of payment instructions, making it virtually impossible for fraudsters to tamper with transaction details undetected. 



The threat of invoice redirection fraud casts a shadow over the international financial landscape, making it imperative for finance managers to adopt a proactive stance in safeguarding their organization’s payments and receivables.

By implementing the five critical steps outlined in this article – strengthening internal controls, implementing two-factor authentication, conducting regular supplier verification, heightening employee awareness, and leveraging advanced fraud detection technologies – finance managers can fortify their defences and ensure the security of their international financial operations.

In an era marked by heightened cyber threats, vigilance and strategic preparedness are the keys to thwarting invoice redirection fraud and preserving the integrity of your financial transactions on the global stage. 


How Fexco can help

Fexco provides automated, global payment solutions to businesses (SMEs and corporate), adding operational scalability and efficiency with real-time payment reporting to drive financial decisions.

Fexco International Payments is ISO 27001 certified in recognition of our standards, processes and continued innovations when it comes to securely managing the information of our clients.

We can provide a tailored solution to align with your business requirements saving you time and money.  



Chat with our team about our secure cross-border payment solutions.

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