The threat of payment fraud is a growing concern for many UK businesses. Recent data shows that over £620 million was stolen by criminals through payment fraud and scams in the UK during the first half of 2025. In addition, two-thirds of this fraud took place online, creating further complexities and digital considerations for UK enterprises.
Digital technologies have opened up vast opportunities for businesses to evolve and grow. However, the same advancements have created different challenges in the form of risk exposure and vulnerability. Payment fraud is a significant aspect of this, as fraudulent actors find ways to access digital systems for their own profit.
In this article, we explore how this type of activity can be combatted, including how server-side validation reduces payment fraud and fortifies your payment processing systems.
Contents
- What is payment fraud?
- Why are validation services important?
- How server-side validation reduces payment fraud.
- Strengthen fraud protection with Interbacs payment solutions.
What is payment fraud?
Any illegal activity that accesses payment systems in order to gain funds or information without authorisation is known as payment fraud. This can include stealing confidential customer data or acquiring funds without approval through nefarious means.
There can be serious consequences when payment fraud takes place, particularly for impacted businesses and customers. Payment fraud usually leads to financial losses, which might restrict the operations of an organisation or consumer due to limited funds being available.
If payment fraud takes place and becomes public knowledge, there could be potential reputational damage. Customers who are affected by payment fraud may lose trust in the business and move their custom to another organisation.
When systems are illegally accessed, it can take a large amount of work, time and money to repair the damage and regain full control over tools and technologies, compliance and security measures as well as impacting profit margin. These occurrences can naturally create financial burdens which could impact operations for a number of weeks or months to come.
Why are validation services important?
The introduction of validation and authorisation services into payment processing cannot be underestimated in importance. Validation services not only assist fraud prevention, but also enhance operational efficiencies and help organisations maintain compliance regulations whilst protecting capital.
Validation services are important as they support:
- Fraud detection
Helping to detect and prevent fraudulent activity, these services verify customer bank details to ensure they belong to the correct person. Validation services also check this information against known fraud indicators to help prevent unauthorised access to customer accounts. - Regulatory compliance
The verification of customer information to ensure identity is accurate helps to meet and maintain compliance requirements, such as GDPR regulations and Know Your Customer (KYC) guidance. - Improved efficiency
Validation helps to ensure that the right payment is taken from the right customer using the correct bank account details. This level of accuracy decreases the amount of time payment processing teams have to spend on missing payments or payment reconciliation.
How server-side validation reduces payment fraud
Server-side validation can be described as the final and powerful process of securely verifying and gatekeeping payment information. Server-side validation prevents fraudulent activity by checking that all data submitted to the server involved in payment processing is accurate and proper.
Evidence shows that server-side validation is more protective than client-side, as this can suffer exposure to fraudulent actors. The checks involved in server-side validation rigorously vet data in a highly controlled environment before payment processing begins.
Server-side validation reduces payment fraud through the following methods:
Tamper prevention
Server-side validation repeats verification of all data inputted into the server, checking that information has not been tampered with or altered in any way during transmission.
Enforced data security
Data undergoes meticulous checks to ensure it complies with the necessary format, type and standards. These actions help to prevent exposure to security risks that may compromise an entire payment system if allowed to take place.
Action authentication
Comprehensive checks, such as user authentication, can be performed by the server. Checking and verifying the identity of the user helps to ensure only approved users can take actions they have been authorised to perform.
Advanced verification tools
Customer information verification services and account validation help to reduce incidences of fraud and ensure only verified customers who have checked information can be added to the system for payment processing.
To explore payment processing solution security in more detail, read our Bacs security and compliance explained: the complete business guide.
Strengthen fraud protection with Interbacs payment solutions
Did you know that Interbacs was one of the first Bacs-approved bureaus in the UK? The regulations that define a Bacs-approved bureau are extremely rigorous, with the bureau consistently meeting the highest standards of compliance.
Our payment solutions and systems maintain the highest levels of security to ensure the payment processing is completed with strong validation and verification checks.
We are always on hand to listen to your requirements and deliver secure and sensible solutions. You can also explore our Solution Finder to discover payment management services that could transform your business.
Contact our team today to discuss how streamlining your payment processes can reduce administrative burdens and free up time to achieve your business goals.
Photo © by VORONA from voronaman.
