Travel Managers: Fraud and Data Breaches on the Rise

Combating fraud is a major challenge for travel managers, particularly in an era rife with risks from large-scale data breaches and card skimming or identity fraud.

The Global Business Travel Association and Airplus International polled 144 travel managers and buyers on their experience with fraud and data breaches. More than two-thirds said their organization has been affected by a payments-related data breach in the last year, and nearly the same amount said they see the risk of fraud growing as time goes on.

The report identifies three core areas of vulnerability for travel managers: vendor data, data security, and accommodation breaches. Most of the time, organizations are notified of a breach by vendors or the news media, not their travel management company or travelers themselves.

While 62 percent of those polled provide data security tips to travelers, high-spending companies are more likely to turn to education to prevent fraud or breaches.

Single-use virtual cards are seen as most effective at preventing fraud, with 79 percent of the travel managers polled viewing them as effective or very effective. Still, just one in five travel programs use virtual cards, up from 11 percent last year.

“We have seen the need to educate around virtual card benefits not just to travel managers but to corporate finance and procurement departments as well,” said Diane Laschet, president and CEO of AirPlus International, which just so happens to offer virtual card solutions. “This method of payment has the strongest level of security controls available on a payment tool which is critical in the age of data breaches. When you couple that with the comprehensive data associated with each transaction it is easy to see why this is the future of business travel payment. The benefits really touch all areas of the company from the back office to the traveler.”

With respect to fraud prevention, travel managers turn to limits on where a traveler can use a card and limit the amount that can be charged in a single transaction. Still, 61 percent polled said they don’t bother to deploy these limits, mostly because most corporate cards don’t allow these kinds of controls.

Another focus for travel managers is preventing their travelers from making out-of-policy bookings. Most accomplish this using centralized payments through their booking tool, necessitating travelers to book using a specific payment method.

While 73 percent said corporate cards are effective at preventing fraud, 63 percent were still concerned about travelers spending extra on out-of-policy upgrades and 53 percent were concerned about travelers using corporate cards to buy booze or merchandise.

Virtual cards can help, but there’s no silver bullet for travel managers to prevent fraud. For the time being education and awareness can go a long way.