Beyond payments: Why SMBs need both contactless acceptance and modern fraud controls

Small businesses today face a dual challenge: keeping up with rapidly evolving payment preferences while protecting themselves against increasingly sophisticated fraud.

Consumers now expect payments to be fast, seamless, and mobile-first. At the same time, fraud is becoming more pervasive and more creative. Three data points show how payments are growing and where bad actors are finding gaps to exploit:

1. In December, Mastercard reported that contactless payments accounted for over 75% of its transactions in 2025. 

2. Meanwhile, credit card fraud became the most common form of identity theft in Q3 2025, rising 54% year-over-year and increasing steadily since 2019 according to the FTC

3. And that fraud exposure is accentuated for small and medium-sized businesses (SMBs) that don’t possess the headcount of their enterprise counterparts to combat fraud: A 2024 Verifi study showed that fraud rates on accepted orders is 65% higher for SMBs than it is for enterprise businesses.

Despite these risks, card payments remain popular with both consumers and small and medium-sized businesses. For SMBs, these trends create a delicate balancing act. They must deliver the modern payment experiences customers demand while implementing the kinds of fraud protections that were once available only to large enterprises.

So what does that mean for banking partners? Reducing payment fraud means proactively addressing emerging threats while building products for consumers’ wants. For Bluevine, in our mission to serve small business owners across the US, that means making anti-fraud solutions previously limited to large corporations available to the average SMB. That, in turn, helps build customer trust and drive business growth. 

Understanding the changing payments landscape 

Payment acceptance methods have evolved and improved over the decades as technology has advanced. Although still fairly ubiquitous, swipe payments are being phased out due to their vulnerability to theft of unencrypted data. . Fortunately, better alternatives have arrived with one clear winner – contactless card payments.

A 2025 global survey found that 71% of consumers prefer contactless payments, up from 62% in 2022. In the U.S., 87% of shoppers prefer contactless payments in-store.

For SMBs, accepting these payment methods is no longer optional. Businesses that cannot support modern payment experiences risk frustrating customers or losing sales altogether.

Historically, however, adopting new payment technologies required expensive point-of-sale hardware and complex setup. That created a barrier for many small businesses – from independent contractors to local retailers.

Today, newer solutions such as tap-to-pay on mobile devices are lowering that barrier. A smartphone can function as a payment terminal, enabling SMBs to accept contactless cards and mobile wallets without specialized hardware. For many small businesses, this reduces cost and complexity while expanding their ability to serve customers wherever transactions occur. 

For us at Bluevine, that provided a simple roadmap: Creating Bluevine Tap-to-Pay so that even small businesses, like contractors, could accept contactless payments. But the path to creating that product –  something that users can see and feel in their hands every day – was filled with considerations around building guardrails that consumers don’t often think about.

Contactless payments improve both convenience and security

Contactless payments are often discussed primarily in terms of speed and convenience, but they also offer meaningful security advantages.

Modern contactless transactions rely on EMV chip technology and dynamic cryptograms that help protect card data. Because each transaction generates a unique encrypted value, sensitive card information is far harder to reuse even if intercepted.

Additionally, in tap-to-pay transactions, customers typically retain possession of their cards or devices throughout the payment process, reducing opportunities for card data to be captured or skimmed.

For SMBs, these protections matter. Fraud-related disputes and chargebacks can be costly and time-consuming to manage, particularly for smaller organizations without dedicated finance or risk teams. Payment technologies that reduce exposure to fraud help small businesses focus on running and growing their operations.

Fraud risks extend far beyond card payments

While modern payment methods offer stronger security, card fraud represents only one piece of the broader risk landscape facing SMBs. Many businesses are equally vulnerable to fraud through account access, ACH debits, and compromised payment credentials. Unlike large enterprises, small businesses often lack the internal tools to detect and manage these threats.That is why fraud prevention must extend beyond payment acceptance to include a broader toolkit of financial controls. 

So we built ACH positive pay controls, debit blocks, 3D Secure, and 2FA push notifications to ensure our customers are always connected to what is happening with their accounts.

ACH debits are risky because account and routing numbers are shared openly, allowing bad actors to initiate unauthorized debits. To hedge against that, ACH positive pay fraud controls help prevent unauthorized access to routing numbers and give SMBs the flexibility to monitor, review, and decide on individual ACH debits before funds leave the account, rather than relying only on post-facto disputes.

Similarly, account-level controls such as debit blocks, spend controls, and sub-account structures can help businesses streamline and organize their operations and isolate risk. Debit blocks allow SMBs to create sub-accounts for receiving funds only, enhancing protection. 

For organizations that issue debit cards to employees, spend controls help protect against fraud and reduce reimbursement friction. For example, property management companies can create separate sub-accounts for each property, with debit cards assigned to each, allowing them to track and manage financial operations individually and provide visibility and control. If a card for a sub-account is compromised, exposure is limited to that sub-account, helping isolate risk.

Authentication tools also play a critical role. Technologies, such as 3D Secure, use one-time tokens to verify transactions, reducing the risk for compromised cards. And 2FA via push notifications provides more security than traditional SMS, which is susceptible to interception, redirection, and SIM-swap attacks. Push notifications ensure the message goes to a specific device, and the end user must log in before responding, which strengthens authentication.

Innovation and security must move together

The future of payments will continue to evolve quickly. As consumers adopt new payment technologies, fraudsters will adapt just as rapidly.

For financial institutions and fintech providers, the path forward is clear: innovation must be paired with robust protections. Payment convenience alone is not enough. Security and trust are equally essential.

Small businesses depend on both.

By delivering modern payment experiences alongside accessible fraud protection tools, banking partners can empower SMBs to operate with confidence, strengthen customer trust, and focus on what matters most – building and growing their businesses. Together with fintech partners, they can meet the moment.