New research reveals the employee furlough surge of 2020 has resulted in a decline in corporate card fraud.
But providers are anticipating a resurgence, and this week’s Commercial Card Innovation Tracker finds a range of new commercial card products and value-added features to support adoption.
Cape Lands Government Backing For SMB Card Technology
Small business credit card to start-up Cape, based in Australia, has secured government funding to support the company’s efforts to develop a cash management platform to support spend management and payment efficiency for its business users, Australian FinTech reported. Open banking supports the capability to provide cash flow management intelligence, while its card product facilitates spend. The government grant will help Cape accelerate product development and sales initiatives as it prepares for an official launch, according to the report.
U GRO Capital Adds Cards To The Mix
In India, small business lending FinTech U GRO Capital is collaborating with SBM Bank to debut its small business credit card product, Mint reported. Dubbed the GRO Smart Business card, the offering supports tap-to-pay contactless payments, the ability to withdraw cash from ATMs and support for expense management and employee reimbursements. “[Small businesses] face a frequent need of urgent credit, catering to which becomes a challenge causing drastic cash flow disruptions,” said U GRO Capital Executive Chairman and Managing Director Shachindra Nath in the report. “This arrangement will enable the businesses to tackle these situations effectively.”
CLC Lodging Debuts A Virtual Card Solution
CLC Lodging is expanding its footprint in the corporate travel and expense management technology space with the launch of a new virtual card solution, according to a press release. Expanding beyond travel management services, the company is rolling out its CLC Trip Card, a virtual card product for CLC members to Pay for business travel related expenses. “Our customers have asked for a simpler way to manage their employees’ per diem expense,” said Ron Rogers, group president of FLEETCOR’s Lodging Division, in the release. “This virtual, contactless payment solution allows businesses to minimize reimbursement time and costs, while providing employees with access to funds when they need them on the road.”
Revolution Payments Enables Level III Processing
Revolution Payments is broadening support for commercial card transactions at its card terminals with the introduction of level III card processing capabilities, according to an announcement. Revolution Payments aims to help lower the cost of corporate card acceptance via level III data capture. Visa and Mastercard charge higher interchange rates when commercial cards are processed with only level I data capture. With the ability to obtain greater transaction detail at the point of sale (POS), merchants can secure a lower interchange rate. “Given the current low profit margin derived by processors today, the focus should be to better manage the interchange cost of accepting credit cards,” the firm said in its announcement.
AFP Finds Corporate Card Fraud Downturn
The Association for Financial Professionals (AFP) has published its annual fraud report, and the findings reveal good news for corporate card users: rates of fraud related to commercial card misuse were down in 2020 compared to the year before. AFP analysis revealed a decline in corporate credit card fraud from 34 percent in 2019 to 24 percent in 2020. The cause of this decline may not be so positive, however. According to the report, shrinking payrolls and a surge in employee furloughs can be attributed to decreased spend on corporate cards, and therefore decreased card fraud. However, the AFP also found that the fraud decline can be attributed to an increase in chip card adoption, as well as more sophisticated fraud detection methods by card issuers. At the same time, expense fraud remained high, with 79 percent of survey respondents reporting fraud on travel and entertainment (T&E) cards, and 61 percent citing fraud on purchasing cards. It is unclear how the AFP differentiates purchasing cards from corporate credit cards.