Protect your business from fraud with secure e-invoicing. In the first part of this two-part series, we explain the key security principles behind e-invoicing - from authenticity and integrity to the risks of insecure transmission methods such as email.
Electronic invoicing, or e-invoicing, is no longer just a digital version of a paper invoice. It involves structured data formats that automate processes and boost efficiency. With the increasing digitalisation of financial transactions, the security, authenticity, and integrity of invoice data are becoming ever more important.
E-invoicing is growing rapidly across Europe and worldwide. This trend is largely driven by regulatory requirements and the push for greater efficiency. The significance of this development is also reflected in the market data. According to e-invoicing pioneer and market analyst Billentis, the global e-invoicing market was worth €8.3 billion in 2024 and is expected to grow to around €22.2 billion by 2028 - an average annual growth rate of 27.9%. These figures highlight the dynamic expansion of the e-invoicing landscape.
Secure e-invoicing is essential for businesses seeking to protect themselves against fraud and to ensure the legitimacy of their financial operations.
The three pillars of secure e-invoicing
To ensure robust security, e-invoicing rests on three fundamental pillars:
- Authenticity: A secure e-invoice must clearly identify both the issuer and recipient. This helps prevent fraudulent invoices and guards against unauthorised third parties posing as legitimate business partners. Technologies such as digital signatures and qualified electronic seals (more on this in our next article) play a key role in verifying the sender’s identity. Internal control procedures can also ensure authenticity by maintaining a reliable audit trail from the service provided to the invoice issued.
- Integrity: Integrity ensures that an e-invoice remains unchanged during transmission and storage. Whether due to technical errors or malicious tampering, any alteration must be detectable - or, ideally, impossible. Digital signatures and tamper-proof transmission channels are central here. Again, internal controls contribute to maintaining data integrity.
- Legibility: An e-invoice must be human-readable, especially the mandatory VAT details. Suitable viewing tools or applications must be used to correctly display the invoice. In structured formats, data must be clearly assigned to specific attributes. Readability must be ensured throughout the retention period.
In addition to the three core principles, two further factors are critical to the security and reliability of e-invoices:
- Non-repudiation: This ensures that neither party can deny having sent or received the invoice. In other words, the sender cannot deny issuing the invoice, and the recipient cannot claim they never received it. Any subsequent changes to the invoice content must be visible.
- Confidentiality: While not always essential for legal validity, invoice confidentiality can be business-critical. Secure transmission channels prevent sensitive financial data from falling into the wrong hands.
E-mail: A risky channel for e-invoices
Sending e-invoices by email introduces significant security risks. Emails can be intercepted, altered, or forged. Attachments may contain malware, and it's often difficult to verify the authenticity of the sender. Relying on email as the main method of invoice delivery exposes businesses to fraud and financial loss.
Common email fraud tactics include:
- Fake invoices: Fraudsters hijack a company’s email account and send customers bogus invoices with their own bank details.
- Altered invoices: Attackers intercept genuine invoices and alter the payment details before forwarding them.
- Redirection scams: Fraudsters impersonate a company via email and request that payment be made to a different account due to a supposed “administrative error”.
Fraudulent invoices and emails often originate from legitimate corporate addresses, making them particularly hard to spot. Some attackers also set up auto-forwarding or filtering rules to hide their tracks and prevent detection by the actual business.
The Verband elektronische Rechnung (VeR), the German e-invoicing association, also warns strongly against these risks. A ruling by the Higher Regional Court of Schleswig-Holstein on 18 December 2024 (Ref.: 12 U 9/24) highlights the dangers of using email invoicing. The court concluded that email is not a secure transmission method due to its vulnerability to manipulation. In the specific case, a company’s bank details were replaced with fraudulent information. The court advised that invoices should not be sent via email without robust protective measures like end-to-end encryption - as failing to do so poses a foreseeable risk to customers.
Case study: Invoice fraud in the traditional system
A high-profile fraud case from September 2024 underscores the importance of secure e-invoicing. The Munich Regional Court handed down suspended sentences to three defendants for large-scale, organised fraud. Between November 2020 and April 2021, the group stole around €200,000 by sending fake invoices to customers of the European Intellectual Property Office (EUIPO).
The perpetrators posed as “IP Register UG”, mimicking official EUIPO correspondence to create urgency and credibility. The case is seen as a landmark in the fight against fraudulent payment requests in the intellectual property sector and sets a precedent within the EU.
Such fraud would have been far harder - if not impossible - had structured, secure e-invoices been used. Standardised e-invoice formats and secure transmission via certified networks or accredited service providers allow for clear traceability of invoice origin and content, making manipulation significantly more difficult.
The role of secure e-invoicing in preventing fraud
Even beyond headline-grabbing cases, invoice fraud is widespread in digital commerce. According to recent studies, over 90% of German online retailers have faced fraud attempts. Compromised email accounts and altered invoice PDFs are especially common tactics. These attacks clearly show how vulnerable conventional communication and invoicing channels are to abuse.
By contrast, structured e-invoices transmitted via certified networks or accredited service providers provide much stronger protection. They allow verification of the sender and contents, making fraud far easier to detect - or even prevent completely. In part two of our blog series, we’ll explore what secure e-invoicing solutions actually look like, how certified networks and service providers operate, and how you can choose the right solution for your business.
To preserve the authenticity and integrity of your financial operations, businesses should move away from insecure methods like postal mail or email - where invoices can be intercepted, altered, or lost - and adopt structured e-invoicing over secure networks.
E-invoices offer a secure and standardised alternative here. They are fundamentally different from just digital PDFs. They're structured data files transmitted directly between accounting systems, with security built into every step of the process.
Secure e-invoices are more than just a technical upgrade - they are your company's protective shield against fraud. But what do secure e-invoicing solutions actually look like, and what benefits do they offer? In part two of this series, we’ll take a closer look at secure e-invoicing solutions, their practical benefits, and how to choose the best option for your business.
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