Fraudulent activity affects all types of businesses, but small businesses are more heavily impacted by fraud than larger companies that have greater resources. A recent global fraud study indicated that the average fraud loss for businesses with fewer than 100 employees is $150,000 — which is the same rate for organizations with over 10,000 workers. This level of loss is much more difficult for small businesses to overcome, proving to be highly detrimental.
Luckily, you can minimize the risks of fraud loss with small business fraud prevention. One of the most cost-effective ways to prevent fraudulent activity is to issue tokenized cards for your company. These virtual debit cards have many protective features in place that can benefit your small business by reducing the risk of fraud.
How Virtual Cards Prevent Fraud in Small Business
Virtual cards are key players when it comes to small business fraud protection. This mobile payment method doesn’t require a physical card, eliminating the risks of standard company debit cards.
You can feel safe and secure against fraud when you experience the many advantages of virtual cards.
Virtual cards protect your account information through a process called tokenization. This encrypts your account number and replaces it with tokens — or randomly generated payment credentials. They essentially minimize the amount of personally identifiable information (PII) users share when they make a purchase.
Tokens prevent the exposure of your primary account number and can only be charged one time. Hackers cannot use or interpret tokenized data, making it useless for fraudulent activity.
Virtual cards have many safeguards in place that only allow the virtual card owner to use the card. When used at the point of sale, they often require face scans or pin numbers once to unlock the phone and again to make a payment. Virtual cards also don’t have a magnetic strip or visible numbers that thieves could use to infiltrate your company’s bank account.
Physical cards do not have these preventive features, meaning unauthorized individuals can swipe and use the card without difficulty.
When you use a virtual card, any transactions you make can appear as debits in your bank account. These purchases increase visibility, making it easier to notice fraudulent activity in real time and dispute the charges immediately. This eliminates the risk of letting any unauthorized purchases slip through the cracks until they show up on your debit card statement at the end of the month.
Many virtual card programs will not hold you liable if your card is subject to fraud and will even notify you of any suspicious activity on your account. These programs will automatically restore any stolen money to your account in the event of theft, meaning you won’t take the hit for fraudulent activity.
Control Your Expenses With Hydrogen Cards
You can protect your small business against fraud with Hydrogen’s virtual debit cards. Our quality cards are easy to issue and offer all the preventive features you need to keep your company’s bank account safe and in the right hands. Sign up to issue your virtual card with Hydrogen today.