A corporate credit card is part of a company’s effort to fund employee business activities. The credit is separate from the employee’s and business’ credit, but the business and employees’ names will be on the card.
The employee may only use it for business-related expenses, and they are usually expenses related to travel. Company credit cards have several benefits that include:
- Being part of reward programs that allow the company and the employee to earn points, miles, or cash back.
- Streamlining spending and reimbursement reports.
- Full purchases can come with assurances and guarantees.
The Costs of Company Credit Card Abuses
The US accounts for more than a third of the 2.8 billion credit cards in use worldwide. Credit cards are key to the retail industry, 77 percent of American merchants sell online, but they present some problems like the rise in card-not-present fraud.
For example, nearly 87% of adults admit to using public WiFi to shop online, which exposes them to credit card risks. Approximately 35% of consumers have fallen to credit card fraudsters, and the figure gets higher the older the consumer. The states with the highest identity theft reports are Georgia, Nevada, and California.
Internal Vulnerabilities
Employees can also be the perpetrators of theft. They account for $50 billion in corporate theft every year. The credit card is a chief culprit when it comes to employee theft.
The employee will have unlimited spending for travel, entertainment, meals, and other business-related expenses. Sometimes there isn’t a means to tell if that meal was with a client or if the employee was the motivator for a pricier expense report, rather than the client.
Furthermore, as companies get bigger and more corporate credit cards are issued, it gets harder to keep track of every transaction and run the business efficiently. Leading to many irregular transactions going uncaught or falling through the cracks.
To help guide you in prioritizing security for company property and data, follow the three essential safety tips below.
Keep Corporate Cards Secure by Using EMV Chips
Skimming is a widespread crime that steals your card’s information when you swipe at a cash register or credit card reader. A solution is to use EMV chip cards. The chip uses a one-time transaction code, so criminals can’t use it to duplicate your card.
Protect Passwords and Computer Systems
Computer and network security are critical for keeping fraud to a minimum. Employees do a lot on their computers, including making purchases and payments. To improve your security, you need to keep your devices updated.
Updates come with security patches that can close security gaps in your system. You can search for “laptop computer repair near me” if you need professional assistance with your IT system maintenance. Employees should also stick to secure websites with an SSL certificate, ones with addresses starting with “HTTPS.” They should also log out of any bank accounts, especially when using a public computer or network.
Criminals can easily break weak passwords using brute force attacks, so a strong password can lower the risk of fraud. Ideally, a password should be long and have random and special characters and numbers. If you are worried about forgetting your password, you can use a password manager.
Set Up Spending Controls
An expense report policy is essential to reducing fraud. It will make employees aware of what can and can’t be expensed and set guidelines on how to submit expenses.
Employees must sign the expense report policy to show that they agree with the terms, understand the rules, and commit to preventing fraud. The guidelines should be clear about:
- Avoiding personal charges.
- Ensuring spending limits.
- Limiting credit card issuances.
- Setting up alerts for purchases outside of approved categories.
There should be a regular audit of expense reports for any breaches or irregularities. When employees know that the company tightly monitors their expenses, they are less likely to commit fraud. An audit is also an opportunity to revisit the policy and see if the company can improve it.
Keep an Eye on the Credit Card
A corporate credit card can ease doing business for your employees. But if you don’t keep an eye on the credit cards, they can become a significant loss center. Manage all your credit cards by using the tips above.