Key takeaways from Visa’s second Small Business, Big Future podcast

In the second episode of Visa's "Small Business, Big Future" podcast, industry experts delve into the pressing issue of digital payment fraud affecting small and medium-sized businesses (SMBs) in the Asia Pacific region. Joined by Ms. Annie Vu, Co-Founder and CEO of Tubudd, and Ms. Dang Tuyet Dung, Country Manager for Visa, Vietnam and Laos, the discussion highlights the growing sophistication of fraud and the strategies SMBs can adopt to safeguard their operations. 

Here are the key takeaways:

1. No business is too small to be targeted

Despite their small size, SMBs are not exempt from being targets of digital fraud. In 2023, of the nearly 43 million local cyberthreats targeting businesses in Southeast Asia, 17.1 million occurred in Vietnam.¹

The financial impact of fraud is also substantial online, with businesses in Asia Pacific losing an average of 3.3 per cent of their annual e-commerce revenue to fraud, according to research conducted by Visa.² Fraud erodes earnings and can damage consumer trust in digital payments, potentially affecting revenues in the long term. Annie shared her experience running Tubudd, a platform that helps international travellers find Vietnamese tour guides and discover uniquely local travel experiences. She encountered situations where potential clients abandoned the payment process due to concerns about online safety. 

2. Fraudsters are getting smarter

SMBs face a diverse array of fraud in Asia Pacific. The most prevalent forms include phishing, pharming, whaling, refund/policy abuse, and loyalty fraud, with first-party misuse emerging as a growing concern.³

As fraud grows more sophisticated, it becomes harder to detect. Annie also recounted instances of transactions that raised red flags and made it difficult to determine whether they were fraudulent. As a result, she had to turn down potential travellers. At the speed at which fraud is evolving, the reality is that SMBs cannot rely on their own capabilities to detect fraud. They must start adopting new tools to manage fraud and mitigate its consequences.

3. Data, especially SMB data, sharpens fraud solutions

Ms. Dung emphasised the crucial role of data in combating fraud. Transactions generate valuable data that can give a comprehensive picture of consumer behaviour and payment patterns. Transaction data, particularly from SMBs, feeds AI and machine learning systems integrated into the infrastructures of banks and payment networks like Visa. These systems can then better detect irregularities and anomalies that may indicate fraudulent activities. As a result, banks and payment networks can intervene to prevent these fraudulent transactions, protecting SMBs from fraud and financial losses.

She explained further that as more data is available, fraud mitigation tools become increasingly effective. They detect fraud more quickly and prevent potentially fraudulent transactions from causing damage to SMBs and their consumers. Hence, data fuels a virtuous cycle where fraud management tools improve over time, enabling SMBs to better combat fraud themselves.

4. Invest in technology to tackle fraud

SMBs need to rely on the right technologies that can combat fraud more effectively. Ms. Dung believes that AI and tokenisation currently hold a lot of potential in helping SMBs stay ahead. 

AI plays a critical role in real-time fraud prevention by understanding payment data patterns to proactively spot fraud trends. Simultaneously, tokenisation makes payment credentials, even if they are intercepted by bad actors, useless to cybercriminals. To fight fraud, Visa invested USD10 billion over the past five years in technology and innovation, focusing on areas such as AI.⁴ These have allowed Visa as a payment network to prevent more fraud, with some USD40 billion in fraudulent activity blocked in 2023, doubling from 2022.⁵ The payment network also launched payment security roadmaps in countries like Vietnam and Singapore to introduce new security measures that will benefit SMBs.^6,7

To fully take advantage of these technologies, SMBs need the support of the financial ecosystem in order to adapt these security tools to their business needs.

5. Partner for smarter fraud prevention

Deploying effective security independently requires substantial investments, which many SMBs cannot afford due to financial constraints. Keeping up with the latest innovations can also be stressful with limited manpower and financial resources.

Ms. Dung shared that the most efficient way for SMBs to combat fraud is to partner with reputable fintechs, banks, and other players in the financial ecosystem to benefit from the latest security technologies. Annie agreed with the strategy, sharing that Tubudd partners with payment companies like Visa, PayPal, and PayME to capitalise on their security solutions, without having to directly invest in developing solutions on their own.

SMBs are not alone in the fight against fraud. While fraud is becoming more diverse and difficult to detect, the financial and technological ecosystem offers a range of solutions that SMBs can use to effectively and efficiently pre-empt, detect, and prevent fraudulent transactions. As fraud tactics change, every business needs to stay alert and flexible, and remain open to the available tools to protect their businesses, setting themselves up for growth.

Watch the highlights of the podcast on YouTube.

¹ VnExpress, Vietnam firms face highest local cyberthreats in Southeast Asia: Kaspersky, 2024.

² Visa, Big on helping you protect small businesses, 2024.

³ Visa, Big on helping you protect small businesses, 2024.

⁴ Visa, Visa’s Growing Services Business Infused with New AI-Powered Products, 2024.

⁵ Bloomberg Law, Visa Says It Blocked $40 Billion in Fraud Transactions Last Year, 2024.

⁶ Visa, Visa launches updated Security Roadmap in Vietnam, 2023.

⁷ Visa, Visa Unveils Future of Security Roadmap to Strengthen Payment Security in Singapore, 2019