While offering unparalleled convenience, the digital age has inadvertently bolstered credit card fraud. The issue has further been exacerbated by the COVID-19 pandemic, which accelerated the shift to remote transactions. With more people shopping online and using card-not-present payments, fraudsters have found new opportunities to exploit vulnerabilities, making it significantly harder to fight credit card fraud, at least according to a recent stripe survey.
Needless to say, hotels are a hotspot for these fraudsters. The hospitality sector remains a tempting target with its constant flow of guests and the exchange of sensitive payment information. So what can hotels do to guard against this problem? This article explores how hotels can guard themselves and their guests from credit card fraud. But first, let's understand the threat we face.
Understanding the Threat
Credit card fraud is essentially the illegal use of someone else’s credit card information to make purchases. In the hotel industry, this can range from in-house purchases to fraudulent reservations. Over time, scammers have developed increasingly sophisticated tactics to defraud guests and hotels; some common tricks include:
Data Breaches: A hotel’s worst nightmare is a data breach. In such an attack, cybercriminals infiltrate a hotel’s databases to steal sensitive information on any customer who has transacted with the hotel, including credit card details.
Employee Fraud or Negligence: It’s also possible to have criminals collaborate with a hotel employee to steal sensitive customer information. Other times, credit card fraud can be a result of negligence on the part of employees.
Card Skimming: Fraudsters also target individuals by installing devices that capture credit card information on ATMs and other payment terminals.
Identity Theft: The most common type of hotel fraud involves criminals using stolen card information to impersonate real guests. These fraudsters can commit card-not-present fraud by making online bookings or phone reservations, or they might physically use a stolen card at the hotel. Other times, there’s the risk of account takeover, where criminals gain authorized access to a guest’s account.
Whichever form the credit card fraud takes, hotels are held liable to a large extent. Not only does it affect their bottom line, but it also hurts their reputation and trust with customers. There’s also the possibility of legal problems and chargebacks.
Hence, any establishment looking to thrive in today’s competitive hospitality sector must be fully aware of the potential for credit card fraud. Beyond being aware, they must also implement major infrastructure to mitigate these financial frauds. One effective way to achieve this is through a PMS system.
Protecting Yourself with mycloud PMS System
Property management systems (PMS) is a centralized software platform that handles various daily activities for hotels, resorts, chains, and many hospitality properties. Smart hotel PMS systems like mycloud PMS offer impressive features for the digital transformation of hotels and delivering exceptional guest experience in the hospitality industry. Let's explore how you can mitigate hotel credit card fraud with mycloud PMS, along with practical security tips.
Customer Verification
Verifying customers at check-in is the first step in preventing card-present fraud at hotels. For this process, hotels should confirm the identity of guests and ensure the information matches the one on the credit card used for booking.
Implementing pre-authorization processes for high-risk scenarios like booking expensive rooms or making last-minute reservations is also good practice. Here, the hotel places a temporary hold on a guest’s account to verify the card’s validity and available funds.
Hotels can also use mycloud’s pre-check-in functionality for card-not-present transactions. The platform’s contactless check-in feature requests for relevant identification and allows credit cards to be authorized in advance, making the check-in process more straightforward for guests and safer for the hotel.
Data Management
As credit card fraud continues to be a prevalent issue, it’s paramount for hotels to evaluate their data management processes. Hotels collect and store guest information, including sensitive data, to streamline future check-ins. While this enhances the guest experience, it also creates a potential target for cybercriminals.
As such, hotels must be meticulous with their data management practices to ensure customer data does not fall into the wrong hands. Maintaining accurate, up-to-date, and secure customer records is essential.
Technology is also crucial, serving as the primary driving force for most innovative trends shaping hospitality today. mycloud PMS offers such technological innovation with its strong encryption and authentication protocols aimed at streamlining record-keeping processes, enhancing accuracy, and improving security.
Train Staff
Staff negligence is, and continues to remain, a significant contributor to credit card fraud. While technology plays a crucial role in guarding against fraud, we should never ignore the human element. Staff handling sensitive information should undergo thorough training and close supervision until they can work independently.
Staff training is an essential element for building a comprehensive fraud awareness program. As such, hotels must prioritize hands-on practice and ongoing training to keep staff sharp and updated. By empowering employees with best practices, hotels can create a robust defense against credit card fraud and protect their guests.
Implement Anti-Fraud Policies and Procedures
While staff training is necessary, covering every possible fraudulent scenario is almost impossible. These fraudsters constantly devise new ways to run their scams, and this dynamic landscape can leave employees unprepared when faced with new scams.
Under such scenarios, staff can benefit from clear anti-fraud policies implemented by the hotel. Such policies provide employees with a procedure for handling suspicious transactions. In some cases, anti-fraud policies could establish clear guidelines for reporting suspicious activities; at other times, they help monitor staff compliance and mandate technology implementation.
Invoice and Payment Management
Finally, hotels can guard against credit card fraud by monitoring and managing every transaction in real-time. Establishments that manage their payment processes effectively can identify suspicious transactions and flag them early before they cause significant harm. Another element of invoice management is clear transaction descriptors. Always use clear descriptions for every transaction, showing all relevant details like the hotel name and location.
The mycloud PMS system offers seamless integration with some of the most secure, globally recognized payment gateways like Paypal, Globalpay, and Stripe, ensuring every transaction is both effortless and secure. Additionally, their platform generates detailed invoices that streamline billing processes and significantly reduce the risks of friendly fraud chargebacks, enhancing your fraud prevention efforts.
Protecting yourself from credit card fraud is effortless with mycloud PMS. Recognized with the Certificate of Excellence Award from Hotel Tech Reports and the High Performer Award from SoftwareSuggest, the mycloud PMS system stands out as the world’s leading end-to-end hospitality solutions provider.
Regarding cyber defenses, the mycloud Hospitality platform prioritizes the highest security and compliance standards to protect your data and ensure seamless operations. mycloud PMS adheres to VAPT compliance, rigorously testing for vulnerabilities to protect against potential threats. Additionally, mycloud PMS is PCI PA DSS certified, ensuring all payment transactions are processed with the utmost security. Our commitment to these robust security protocols will provide you with the most secure and compliant transactions possible.
Conclusion
Credit card frauds are a nightmare for hotels, but they can better secure themselves against fraudsters with proactive strategies. By following these best practices and implementing a comprehensive Software Used In Hotels like mycloud PMS, hotels can fortify themselves against credit card fraud.
However, if you do fall victim to these fraudulent activities, then you should take some basic steps to limit the impact. Immediately contact all relevant departments, including accounting, IT, and law enforcement. Furthermore, you should acquire as much evidence to support your case, particularly regarding chargebacks.
Ultimately, a secure payment system is necessary in today’s digital age. As such, hotels must prioritize customer safety, protect their reputation, and ultimately improve their bottom line.
