Corporate Card Security

Corporate cards are credit cards issued by a financial institution to a company for use by their employees. These cards allow employees to purchase business expenses like travel, entertainment, office supplies, etc. These cards allow companies to easily track employee spending while avoiding the need for employees to spend their money for business purposes.  

The use of business credit cards has been rising steadily over the years. As more employees access these cards, companies face increased risks of misuse and fraud. Employees may misuse them, make personal purchases, or fail to submit receipts and documentation as required.

This makes implementing corporate card security critically important. Credit cards open up businesses to financial risks if not properly secured. Companies need proactive measures and policies to prevent fraud, limit misuse, and protect their financial interests. 

This blog provides insight into corporate card security measures and how you can protect corporate cards.

Assess Your Risks

Corporate cards are valuable targets for fraud. When assessing your risks, it’s important to note common types of fraud like:

  • Ghost employees – Setting up cards for non-existent employees
  • Fake vendors – Paying out to sham supplier accounts  
  • Duplicate charges – Charging the same expense multiple times
  • Personal purchases – Using the card for unauthorized personal expenses

You also need to consider insider threats from employees misusing cards. Industry-specific risks are important, too. For example, restaurants often see fraud from staff inflating tips. Retail has risks around refund fraud. Analyzing past cases can reveal vulnerabilities specific to your sector.  

Limit Employee Access

Companies should take care to limit which employees have access to business cards. Giving cards to too many employees or overextending spending limits can lead to misuse and make cards more vulnerable. 

To limit employee access:

  • Set clear policies on appropriate spending limits based on employee seniority and role. Do not issue cards with unnecessarily high limits.
  • Only provide credit cards to employees who truly require them for business purposes. Avoid handing them out freely.
  • If an employee’s role changes, reevaluate their need for a card. Collect cards from employees who switch to positions without purchasing needs.
  • Enforce defined processes for requesting new or replacement cards. Do not allow employees to obtain cards informally.
  • Require employees to sign an agreement acknowledging proper card usage policies and potential disciplinary actions for violations.

Proactively limiting employee access to business cards helps control program risks. Companies should regularly review card issuance and set prudent policies around which employees receive cards and their spending limits. Following careful issuance processes reduces the chance of misuse while enabling necessary business spending.

Enhance Cardholder Security

Corporate cards should have strong security protections to prevent unauthorized access and use. Companies can take the following steps to enhance cardholder security:

  • Require strong passwords: All cardholders should be required to create complex passwords that are difficult to guess. Passwords should be at least 8-10 characters and include uppercase, lowercase, numbers, and special characters.  
  • Enable two-factor authentication: Adding an extra layer of authentication through a one-time passcode helps protect corporate cards. This makes it harder for unauthorized users to log in even if they somehow get the cardholder’s password.
  • Provide fraud education to employees: Educate employees on safe practices like password hygiene, avoiding phishing attempts, reporting suspicious activity, and more. Ongoing education helps prevent fraud by ensuring employees understand security threats.

With the right security controls, companies can better prevent fraud, reduce misuse, and protect corporate cards.

Monitor Transactions

Carefully monitoring all transactions in real-time is crucial for identifying potential fraud. Rely on your travel management software’s advanced AI and machine learning capabilities to flag suspicious charges automatically. Set customized alerts and notifications for transactions exceeding a set dollar amount or outside expected geographies. 

Conduct manual reviews at least weekly to audit charges across all corporate cards. Analyze transactions for unusual spending patterns and flag questionable purchases for follow-up. Maintain detailed records of all monitoring and auditing activities. Monitoring transactions closely lets your team catch improper charges immediately before significant damage is done.

Control Spending Categories

Companies should take measures to control what categories of spending are allowed on corporate cards. This can help prevent fraud and ensure cards are only used for approved business expenses. Specific steps include:

  • Block high-risk merchants: Work with your card issuer to identify and block certain high-risk merchant categories like bars, nightclubs, gambling, etc. This will decline any transactions at those merchants.
  • Set category spending limits: How much can be spent per month in categories like travel, restaurants, entertainment, etc. If limits are exceeded, transactions will be declined.
  • Restrict cash withdrawals: Limit or completely remove employees’ ability to withdraw cash advances on their cards. It significantly reduces fraud and misuse risk.

Proactively controlling spending categories is an important corporate card security measure that gives companies more oversight into how cards are used. Paired with travel management software, companies can further analyze employee spending for compliance with policies.

Integrate with Travel Software

Integrating corporate credit card programs with travel management software provides additional layers of security and control. Card issuers provide direct integrations with travel management platforms to share real-time transaction data. This gives finance teams full visibility into card spend across the organization. Key benefits include:

Automated reconciliation between transactions and expense reports eliminates manual processes. Transactions are verified against receipts and mapped to reports. This saves significant time for cardholders and approvers.

Travel policy enforcement ensures cardholders stay within guidelines for airfare, hotels, car rentals, and other expenses. Transactions outside of policy can be automatically flagged or declined.

Complete visibility of spend with detailed data on the merchant, date, amount, and category for every card transaction. It allows for robust reporting and analysis of expenditures.

Integrating corporate credit card programs with travel booking and expense software adds critical layers of control and security. It also streamlines financial processes for card users and management.

Report Card Theft Immediately

Having a process in place to report lost or stolen cards is crucial to limiting fraud losses. When an employee suspects their card is missing or stolen, they should immediately notify your travel management department and call the card issuer. 

The card issuer can immediately freeze the card to prevent unauthorized transactions. Most card providers have 24/7 toll-free numbers to call. Encourage employees to program the number in their phones to access it if their wallet or purse gets stolen easily.

Tighten Corporate Card Security

A comprehensive approach to corporate card security requires vigilance and ongoing adaptation. Companies must implement a multi-layered strategy that involves many different stakeholders and policies. Though securing corporate cards requires considerable effort, the long-term benefits are worth it.

With ITILITE travel and expense software, you can achieve seamless. Seamlessly integrated into your workflow, our cutting-edge features ensure that your corporate cards are shielded from potential risks and fraud. 

Gain real-time insights into your company’s spending patterns, set customized spending limits, and receive instant alerts for suspicious activity. Our corporate travel management platform analyzes transactions, flagging anything outside the norm and ensuring you stay one step ahead of potential threats.

To know more, book a free demo with us today.