• Anthony Hynes, Managing Director and CEO at eNett International


• 15.11.2017 08:45 am
undisclosed

This week is International Fraud Awareness Week, an initiative designed to highlight the impact fraud has on society and boost awareness and understanding of how to spot and prevent fraudsters. And with fraud on the rise, it’s never been more relevant.

The travel industry in particular suffers from high levels of fraud, with the most common examples being ‘card-not-present’ scams or cloned websites. The International Airport Transport Association (IATA) estimates that fraud is costing airlines up to $1 billion a year² and the Association of British Travel Agents (ABTA) reports that travel fraud is up 425% year-on-year³. By definition, the travel industry involves large volumes of payments, with multiple consumers and suppliers across many different countries using multiple booking and payment systems. With billions of transactions a year, it’s no wonder fraud is a top pain point for travel companies.

Global travel market research company, Phocuswright, found that fraud was the biggest concern amongst travel firms, with 40% stating that credit card fraud and supplier default are their biggest challenges⁴. The problem is so engrained in the industry that travel agencies now set aside 1-2% of their revenue into managing fraud⁵. In an industry where margins are already tight, it’s still a substantial cost. But with today’s advanced payment solutions, minimising the risk of fraud is as simple as changing the way you pay.  

Virtual Account Numbers (VANs) are increasingly popular with travel businesses. A key draw is their protection from fraud. Instead of a single physical card number, a 16-digit Mastercard number is generated uniquely for each individual transaction, making it a safer way to pay. A wide number of payment parameters can also be added for greater control, including restricting the VAN by merchant category code. And with chargeback capabilities, VANs also provide protection in the event of supplier default. A digital solution to minimising the risks of fraud. 

Consumer demand for travel to exotic locations and customised trips organised through different suppliers show no signs of abating. The travel industry will continue to be a target for fraudsters given the vast number of transactions made in different currencies and to far-reaching corners of the globe. VANs provide travel companies with a way of mitigating fraud so that it doesn’t impact profits, as well as a fast, easy and safe payment method for transacting with suppliers and protecting customers.