Growing numbers of businesses are turning to virtual account numbers in the fight to protect themselves from online fraud.
A surge in ransomware attacks is costing business millions of pounds and pushing up the cost of insurance claims. In recent months, thousands of organisations around the world were crippled by the Petya virus which encrypted company files and demanded a ransom to get them back. In May, WannaCry infected the NHS and Spain’s Telefonica, not to mention thousands of businesses across the US.
But businesses are fighting back by using virtual account numbers (VANs) to improve their data protection and stop fraud. These unsung heroes are already being used by some of the major credit card companies and they’re ideal for the online travel industry which is particularly at risk because of the high number of payments made online and overseas.
So what are VANs?
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VANs are the new kid on the block when it comes to online fraud prevention. When you pay online you hand over your (or your company’s) credit card details, security code, name and address – all details an unscrupulous supplier or fraudster could then use to make unauthorised payments.
The easy payment method of VANs mitigates the risk of fraud by generating a unique, expirable16-digit number, linked to an actual credit card, which can be used to make payments online or to suppliers. A unique number is generated for each new booking or payment transaction so even if it were to fall into the hands of cyber fraudsters they wouldn’t be able to use it because they don’t have the real card number.
Why is it good news for businesses?
Thousands of companies make thousands of online transactions every single day. Take online travel agents, for example where global online travel sales tipped $530 billion in 2015 and are likely to grow to $760 billion by 2019. They make a huge number of payments to overseas suppliers which can leave them open to cyber hacks, especially if they’re paying new suppliers or dealing with countries they’ve not transacted with before. It’s a big concern for industry with 40% saying their biggest worry is fraud or supplier default.
But using VANs as a payment solution can massively reduce the risk of money gong astray in the event of fraud or if data is stolen during a ransomware attack. Even if an attacker does intercept the number they won’t be able to use it for further transactions because that particular number will have expired.
How else do VANs protect businesses?
It’s not just data protection from hacks and ransomware that VANs are useful for. They can help to mitigate online risk in other ways. VANs can be set to expire after a certain number of months which allows a business to manage a subscription, regular payments or make a certain number of payments. Suppliers can be paid set amounts for a set number of months, subscriptions can’t auto renew without you remembering and it stops money going out when it shouldn’t.
VANs are also a great way to stop suppliers overcharging businesses. For example, if a business pays a monthly bill which is around the same figure, the VAN can have preset limits which means any increased payment can be caught and at least disputed before full payment is made.
How do VANs help business?
VANs are connected to a credit card number such as MasterCard. MasterCard is accepted online or around the world in more than 35.9 million locations which means businesses can conduct secure transactions globally. They are also covered by the MasterCard guarantee, adding a further level of protection if a business does fall victim to fraud or supplier default.
In addition, VANs can be generated in many different currencies. This worldwide reach means it is easy for businesses to expand into new markets without needing to set up payment services in each new jurisdiction.
VANs can also help save businesses money. The system can be fully integrated with existing payment systems and automated which can reduce the cost of payment processing and reconciliation.
Are there any downsides to VANs?
Very few. VANs really are the new frontline when it comes to data protection and preventing internet fraud. If your business doesn’t use them, then now is a great time to learn about them and implement the system. VANs are easy to generate online and give an immediate level of increased security. However, they are less easy to generate through a mobile phone.
Although they protect financial information, hackers can still get access personal information such as username, password and date of birth. Having said that, they are still one of the best tools to boost your data protection and reduce the chances of sensitive financial data being hacked.