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Spotting counterfeits Payment professionals are familiar with the emergence of
"fintech," but did you know that there is another recent
in wine and payments development, which I call "winetech"? (I just made up that
term). In "Ignore the Snobs, Drink the Cheap, Delicious
Wine," New York Times wine writer Bianca Bosker noted
the emergence of "industrially farmed grapes which
are manipulated and tailored to fit predetermined
specifications, based on audience research."

Producers can now use chemical shortcuts to develop
consistency and stability and mimic high-end wines.
This is a more subtle form of counterfeiting that takes
advantage of discoveries in scientific wine research. So
much for terroir.

Counterfeiting in payments
Counterfeiting exists in the payments space as well. While
most readers of The Green Sheet are focused on credit card
processing, it is useful to know about the other types of
payments your clients make in the course of their daily
work. When you know what your clients go through every
day to process payments, it helps you to understand their
By Brandes Elitch pain points, and enables you to come up with solutions,
CrossCheck Inc. or at least try to, which gives you credibility in the eyes of
your clients.
onoma County, where CrossCheck is located,
tops Napa Valley as the Best Wine Vacation, The Association for Financial Professionals is a trade
according to the annual travel rankings revealed association for cash managers and treasury professionals.
S June 20, 2017, in U.S. News & World Report. Napa It just released the 2017 Payments Fraud and Control Survey,
came in third; Italy's Tuscan wine region came in first. which shows that cybersecurity models and strict control
governance are crucial for all businesses, since 75 percent
This is excellent news. However, when you have a of survey respondents were targets of payment fraud last
successful (and profitable) product that is in high demand, year (although these are typically large enterprises). Checks
in some cases to the point where the winery is sold out are the most frequently targeted, which is not surprising
of a certain product, this creates an opportunity for since over half of all business-to-business payments are
counterfeiting. A recent BBC Radio 4 documentary, called check-based; many are high dollar. Fortunately, there are
The Wine Detectives, estimated that up to 20 percent of the many ways to counter check fraud, such as:
fine wine market may be counterfeit. Someone may buy • Dual tone true watermark
up original bottles and corks on the web and fill them • Micro-printing, chemical wash detection box,
with a similar but obviously cheaper substitute, seal them, chemical reaction paper, and thermochromatic ink
and resell them to collectors, many of whom could never
tell the original wine from the counterfeit. • Customized controlled paper stock
• Bank positive pay, payee positive pay, and reverse
A sophisticated winemaker might try another approach: positive pay
create your own bottles, labels, paste and a wine with
similar characteristics to the superior wine, and produce • Segregation of accounts
the inferior wine on a large scale. A third approach is • Daily reconciliation
to create wines that never actually existed in the year,
appellation, brand, terroir, etc., you print on their labels. The second most targeted area researchers identified was
wire transfers, which are always high dollar and the scariest
Techniques exist for checking authenticity. Glue and for banks. Third place went to corporate and commercial
paper labels can be forensically dated. The corks may credit cards, followed by automated clearing house (ACH)
have extraction grooves. Lead caps crease more easily debit fraud. One howler in the report is "ACH is considered
than aluminum ones. Nobody is going to counterfeit a $20 more secure than check," which contradicts my experience
bottle of wine, but at higher price points it becomes more working in the cash management department of one of
plausible. Relying on a knowledgeable, trusted, local wine the largest California banks, where we viewed ACH as so
expert whom you know personally is your best defense. risky that a new ACH originator had to be signed off by
the bank's Chief Risk Officer.

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