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How virtual credit cards can help prevent a data breach

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Why Virtual Credit Cards

by Diane Laschet, AirPlus International | Oct 15, 2019 10:11am

Single-use virtual credit card payments reduce the risk of exposure during a data breach. Photo credit: AirPlus InternationalShareFacebookTwitterLinkedInEmailPrint

Cyberattacks targeting the hotel industry show no signs of leveling off. In fact, the situation appears to be getting worse. A 2019 survey from AirPlus International, in partnership with the Global Business Travel Association, shows that 68 percent of business travel managers think the risk of fraud is worse today than it was two to three years ago.

Since 2010, several dozen data breaches have been reported by hotels, affecting not only the major multinational corporations that tend to make headline news, but smaller, single properties as well. The survey reveals that there were 338 hospitality sector breaches throughout the past year (the second-highest of any sector), with most (90 percent) targeting point-of-sale systems.

Photo credit: AirPlus International

There is a solution on the market today that renders data exposed during a breach useless. Virtual credit cards are used to settle a specific vendor payment transaction and are issued for a specific monetary amount. Even though the functionality of a VCC is identical to that of a common, plastic credit card, its unique 16-digit card number is far more secure and as individual as a fingerprint because it is created for a single transaction up to a certain amount and is only active for a designated period of time. 

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A successful hacker could obtain all the card data: the card number, the expiry date and the three-digit security code, but until the number is activated for use, the credit amount is set to zero. On activation, the card data is sent directly to the merchant in real time and the transaction is executed. At that point, the card expires because the transaction is complete and the card cannot be reused. If anyone attempts to use the card for another purpose, it simply will not work. 

Critical Need for Increased Adoption

Hotel properties go to great lengths to protect the physical belongings of their guests while on premises. A growing number of hotels and their corporate entities are also realizing they must be equally careful in protecting the financial data of their valued customers. 

In the U.S. market, research shows that virtual cards experienced almost double-digit growth in the most recent year (11 percent in 2018 to 20 percent in 2019). Because today’s business travelers continue to adopt VCCs for their hotel booking and travel needs at such an impressive rate, now is the time for more hotels to accelerate VCC integration into their payment systems. In doing so, hotels will gain benefits that range from enhanced guest relations by the reception staff to management capturing revenue and more market share of the business travel sector. 

Single-use virtual credit card payments reduce the risk of exposure during a data breach. In addition, VCCs mitigate the invoicing process and overhead associated with managing accounts receivable. 

A VCC also simplifies and streamlines the check-out process, benefiting both hotel guests and reception staff. In addition, VCCs enable fast, reliable, real-time and last-minute reservation capabilities, which can lead to increased bookings and revenues for hotels.

VCCs Provide a Stress-Free—and Safe—Travel Experience 

Corporate travel managers also see the benefits of VCCs. According to the AirPlus/GBTA survey, more than two-thirds of travel managers (69 percent) say their business travelers have been affected by a breach of payment data from outside vendors, and 79 percent of travel managers say virtual cards are effective at “preventing fraud by an external party such as a hacker or a thief.”

Irma Rinkel, travel manager for Bluewater Energy Services, said VCC payments ease the company’s travel bookings, especially for less-experienced travelers. With VCCs, her department is able to handle the logistics, eliminating any issues employees would have faced had they booked their travel and accommodations independently using their own credit card. 

“[Once] we had to book a large group, which also included less-experienced travelers, at several hotels that involved reserving 20 rooms for 30 or 60 room-nights,” Rinkel said. “Luckily the hotels we used accepted our VCC, enabling us to securely book all the accommodations seamlessly for our employees because asking each of them to pay would have been challenging. Our finance department also benefited because it had fewer expense sheets to process.”

Simple Implementation

Hotel managers can integrate VCC payment methods directly into their property-management system, allowing for a seamless reservation from booking to billing. Accepting VCCs is as easy as accepting an actual plastic credit card. The process is similar to receiving a booking online. Upon a guest check-out, the hotel front desk staff does the following:

  1. Enter the sale amount in your terminal and confirm. 
  2. Instead of swiping the card, enter the card number manually, if it isn’t already stored in your system and ready for use. 
  3. Follow the instructions on the terminal. If the expiry date is required, enter the expiry date on file or shown on the document provided by the traveler. 
  4. Information will be processed through the network just as with any plastic card. If there is an issue with the card number, it will be displayed on the terminal. 
  5. Print a receipt for the customer and hand it over together with the hotel invoice.

Diane Laschet is head of Americas for AirPlus International. Read More OnData BreachSecurityCredit Card SecurityAirPlus International

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