Best Practices to Fight Commercial Card Fraud

Issuing commercial credit cards to employees can help create a layer of financial oversight and transparency over business travel and other company expenses. Companies are better able to track how and where expenses are incurred, manage expenses to approved vendors, and avoid the hassles and risks of reimbursing cash expenses. Companies should approach a commercial card program carefully to reduce potential incidents of accidental employee misuse or intentional fraud.

Create clear business guidelines for card usage.

Companies need a comprehensive, company-wide policy in place governing where, when, why, and how cards are used and to whom they can be issued. The policy should outline a standard expense report process, how employees report potential fraud and consequences for any misuse. Card usage guidelines should be reviewed and approved at the C-suite or board level, and reviewed annually to ensure applicability to changing business needs.

Once the guidelines are approved, the company should host informative card-usage sessions for new employees as well as annual sessions for existing card holders to remind them how and when to use corporate credit cards. Regular communication ensures employees understand their responsibility in good management of the card program.

Use available ghost card and virtual card capabilities.

Companies should consider using advanced card tools for recurring or non-T&E purchasing to avoid card compromise and to keep the accounting clean.

Ghost cards can safeguard the main account number from misuse, while providing spending flexibility and required reporting. They can be used for entire departments or dedicated to specific suppliers, with the simplicity of rolling up to a single account.

For clients needing greater spending control, security, and efficiency, deploying a virtual card program with on-demand, single- or limited-use card numbers may also reduce the risk of card fraud..

Customize purchasing guidelines for each employee.

Develop customized spending profiles for each employee that provides guidelines and limits for each employee, based on their role. If you have an office manager who occasionally needs to buy supplies, a $500-$1,000 limit may be sufficient. If you have a sales executive who regularly travels to Europe or Asia, they may need higher limits. In addition to credit limits, custom spending profiles allow you to prescribe single purchase limits, merchant catergory code (MCC) blocking, among other preferences, to achieve internal purchasing guidelines.

For virtual cards, Purchase Control, available through SVB's card program, can help program administrators create a customized framework for managing card usage. They can set approved spending limits and vendors for each employee, based on their specific purchasing needs. Administrators can also set up alerts, velocity limits, and bar usage at certain types of businesses that will help minimize misuse and potential fraud.

Contact us

Your Global Treasury and Payments Advisor or SVB representative can help you review your company's commercial card guidelines, while providing additional information for reducing commercial credit card fraud. They can also discuss how SVB's commercial card program may fit your current needs and future growth plans.

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This material is provided for informational purposes only. The conclusions expressed are based upon limited information available to Silicon Valley Bank regarding your company's fraud detection and prevention programs, and should not be seen as a substitute for obtaining your own independent assessment of such programs. The security of your operating system and your procedures for conducting banking transactions with us remains your responsibility. Silicon Valley Bank is not responsible for any cost, claim or loss associated with your use of this material.   

About the Author

Robert O’Connor is a Senior Advisor with Silicon Valley Bank’s Global Cash Management team. In this role, he focuses on developing credit card and payments solutions for clients.

Prior to joining Silicon Valley Bank, Robert was Vice President of U.S. Commercial Product Sales at MasterCard Worldwide. During his seven years with MasterCard, Robert worked with many U.S. commercial card issuers on developing their commercial card strategies. Robert’s previous experience includes various business development roles with U.S. Bank’s Corporate Payment Solutions and Merrill Lynch.