Sponsored by eNett International
Fraud in the travel industry has always been a big concern. Travel and tourism account for a staggering 10.2% of global GDP and the specific nature of travel transactions make it a lucrative target - high value one-off payments, rapid consumption and a large number of suppliers across the globe.
eNett’s new research, Fraud in Travel Payments, revealed that the three most common types of fraud in the travel industry are stolen payment details, cyber breaches of online booking platforms and stolen security credentials. These, and others, are costing travel intermediaries a whopping US$21 billion each year. And that figure is predicted to increase 20% by 2020, exceeding US$25 billion.
Fraudsters are becoming even more sophisticated in how they are launching attacks. However, there are key ways to reduce the risk of fraud, and get your money back should it occur.
Keep your employees updated on the latest fraud techniques
Fraudsters are constantly innovating and using new channels to trick employees. Educate employees so they can recognise the warning signs, especially when it comes to more integrated social engineering attacks, such as phishing.
Help your employees collaborate to fight fraud by implementing a shared responsibility model. For example, appoint a ‘maker’ who enters the transaction, followed by a ‘checker’ who verifies the data and authorises the transaction. This type of process supports red flagging of transactions by sharing the responsibility amongst employees.
Get to know your customers
This is a simple way to track fraud without a large initial outlay. A customer registration process that includes contact details, nationality, date of birth, payment details and other information will allow you to develop positive lists and negative lists for monitoring and filtering of transactions. Such lists can also form the foundation for fraud control tools and processes while enabling collaboration with other organisations.
Make sure you’re getting the whole protection package from your payment method
Traditional payment methods are often found lacking in the face of today’s sophisticated fraudster. Modern alternatives such as virtual cards or Virtual Account Numbers (VANs) that generate unique 16-digit card numbers for each transaction, reduce fraud significantly. As they are single-use, it is estimated VANs can reduce direct fraud related losses by up to 99% compared to traditional cards.
However, not all virtual cards are the same. eNett VANs for example allow users to define booking and payment parameters, and come with sophisticated chargeback capabilities should fraud occur for peace of mind.
Create a circle of trust
Travel agents face a balancing act between offering a wide range of travel services and the need for due diligence in relation to travel suppliers. It’s important to consider a level of background checking to satisfy yourself that a travel supplier legally exists and is who they say. This includes frequent checks for trusted suppliers to protect against compromised systems. Even if the fraud occurs at the supplier level, the customer will still hold you responsible.
Don’t let payments slip through the security net
Investment in good cybersecurity practices is a given, but agents must make sure to include payment platforms and methods in their scope. This should typically cover requirements for password complexity and change frequency, tracking of login patterns for unusual activity (e.g. locations or IP addresses), use of multi-factor authentication, and account lockouts after failed attempts or account inactivity.
Tighten up on customer transactions
Limiting the number of declined transactions allowed per payment card, establishing a minimum timeframe from time of booking to use of travel service, identification of higher risk third party purchases and manual reviews of higher risk bookings can all lower fraud rates. Listings from travel suppliers and subsequent payments to them may also be subjected to additional scrutiny if established rules indicate reason for suspicion.
As we continue the path to global digitalisation, the problem of fraud in the travel industry will continue to grow and evolve. Download our most recent report “It Pays to Know: Fraud in Travel Payments” to find out more about the impact of fraud on the travel industry and how you can protect your travel business against sophisticated and persistent cybercriminals.
This article from Anthony Hynes, managing director and CEO of eNett International, appears as part of the tnooz sponsored content initiative.