Kiwi Software Prevents Massive Payment Fraud

As the millions of dollars lost to payments fraud mounts exponentially, there’s a New Zealand company with unique software invented to combat this crime and protect organisations of all shapes and sizes becoming victims of deception.

VigilantPay was recently chosen by ANZ Institutional in Australia to collaborate on exploring innovative ideas to make cross-border payments safer.

CEO Sam MacGeorge created VigilantPay eight years ago after suffering from business fraud himself. He’s proud that when VigilantPay is deployed to check prepared bulk payments, on average 10% are detected as incorrect.

VigilantPay ensures the single most important payment item is correct – the bank account number. It’s all about payment integrity.

“Well done to Sam MacGeorge on building a company that’s transforming how organisations manage payment security,” says Jarrod Cassidy, ANZ Institutional Head of Strategic Partnership Origination.

VigilantPay was successful in the recent FinTech Australia Banking Reverse Pitch event when addressing a challenge from ANZ to enhance the security of international money transfers at both the customer and bank level.

VigilantPay is proven to help reduce compromised email fraud and incorrect data input, which were ANZ’s key concerns against a background of A$42 billion of cybercrime in Australia each year. Making payments overseas further heightens the risk of fraud due to increased complexities in international payment processes and diverse regulatory environments.

“When payments are identified as incorrect it means our clients can stop the fraudulent or erroneous payment before it is made and on average* saving themselves $100,000- $150,000 each year,” Sam MacGeorge says.

Fraudsters are constantly working to rip off any organisation they can and he recognises that in hard economic times fraud is even more prevalent. Worldwide there is a huge increase in email hacking and false invoicing fraud, and artificial intelligence is now being used to make this easier and more effective for fraudsters.

“The VigilantPay software prevents payment fraud and errors by validating payment instructions before they are sent to the bank– in particular, checking the large batch files of proposed payments organisations use for accounts payable and payroll,” Sam MacGeorge says.

“VigilantPay scans 100% of payment batch files set up for bank processing and our advanced algorithms check each transaction for issues in real time.

“Our software gives customers great comfort that their bulk payments are legitimate, as it’s not a spot check. The algorithms analyse every transaction, one by one, to detect and flag errors early in the payment process,” he says.

The software streamlines payment processes and detects variations businesses may not be aware of such as supplier changes affecting bank account numbers or a legitimate bank account number modification, MacGeorge says.

“Consumers are gaining a greater understanding of financial fraud through scam education and media attention. Every business owner, director and CFO knows the same problems highlighted for the general public are happening inside a business,” Sam MacGeorge says.

And while the banks are currently highly focused on addressing what’s known as retail fraud – fraud that affects the public – there’s less attention on business customers, he says.

It’s not just the sophisticated online fraudsters that companies need to be wary of – employers must be mindful of internal fraud.

“It’s important for organisations to have proper processes in place to manage cash and prevent internal fraud, particularly during times of economic hardship,” Sam MacGeorge says.

“For example, remote workforces provide an opportunity for fraud as the same checks and balances within the financial processes don’t exist. Plus, online security can be compromised when people work on their home wifi.”

The software integrates with accounting and payroll systems and can be deployed to detect employee payments fraud.

VigilantPay becomes such an integral part of a customer’s financial processes that it can’t do without it,” Sam MacGeorge is proud to say. VigilantPay customers in New Zealand range from publicly-listed companies to SMEs and not-for-profit organisations.

How it works:

Confirmation of payee details is difficult for individuals, businesses and banks to validate because the information received can’t always be trusted. Payee details are being intercepted and manipulated by internal and external bad actors.

VigilantPay is an innovative business solution that automates payment checks across your systems, turning a difficult manual task into a simple process. It works by aggregating disparate payment data silos and enables an organisation’s accounts payable team to resolve issues before they cause any loss of time or money.

The unique system analyses in real-time the customer’s historic payment data and compares it to the collective data of the wider community using the VigilantPay platform. The ‘strength in numbers’ defence cross-checks take an instant and the customers can then process and approve payments with confidence.

VigilantPay integrates into customers’ existing workflows, seamlessly sitting between the accounting systems and the bank. There is no integration required.

Today VigilantPay analyses billions of dollars worth of transactions for its users and holds one of the largest private database of account details to also check against.

VigilantPay is a sophisticated solution that audits proposed payments in real-time, stopping account manipulation such as false invoice scams, insider tampering and business email compromise (BEC).

VigilantPay history:

VigilantPay is a passionate team of digital crime fighters, data wranglers, developers and professionals transforming how organisations manage payment security. Since 2014, its New Zealand-based team has been developing products to assist a wide range of organisations with multiple business challenges across the areas of payment security and anti-money-laundering compliance (AML).

Sam experienced internal fraud in a company where he was a director when an employee stole funds. The case was settled confidentially out of court as an HR issue and the funds recovered. Along the way Sam learned such white-collar crime wasn’t a police priority and the onus to compile the evidence lies with the victim. Like many firms in similar situations, his company moved on to avoid any embarrassment and further effort.

Sam’s anger that this could happen was the catalyst for some research. He found the problem was largely due to limitations in accounting systems and banking platforms that criminals take advantage of. Sam realised the scale of the issue with word of mouth proving large businesses were being caught out. He wanted to save other businesses from this burden. Some friends liked his concept of how the problem could be solved and VigilantPay was born.

*VigilantPay in 2022 analysed its data and found a 10% failure rate among batch files. There was one or more erroneous payment in 10% of batch files a customer set up for payment. Considering the average transaction cost and one error per batch file, VigilantPay estimated savings of $100,000 to $150,000 per customer.

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