Author: Derrick Wright, Security and Compliance Manager at Shell
28 Jul 2014
Driven by our ever-increasing preference for paying without cash, the global card payment industry has grown almost beyond recognition in the last two decades. In fact, according to CapGemini’s latest World Payments Report, there were a staggering 307 billion worldwide cashless transactions made in 2013. That’s more than 40 for every person on the planet.
Perhaps unsurprisingly then, fuel card usage in the commercial road transport sector is also on the rise. Increasingly, fleet operators are choosing to give their drivers the freedom, convenience and control to fill up using a company-funded solution. For example, every year, Shell fuel cards are used to make around 260 million transactions worldwide.
Yet sadly, greater use can also mean greater abuse. Fuel cards remain the most secure, efficient and simple way for drivers to fill up on the road, but as more and more payments are made, the number of opportunities for organised crime increases too. After all, fuel is – and will continue to be – one of the world’s most valuable commodities, so for many fraudsters, trying to obtain it illegally constitutes a full-time job.
[A]s criminal tactics advance and become better targeted, the techniques to fight them are getting more sophisticated too
For the fleet industry, the result is millions of dollars lost every year to fuel card related fraud – a problem that affects all countries and all fuel card providers. Add the fact that, nowadays, fuel can already account for up to 30 percent of a fleet’s running costs and the need for operators to ensure card payment security has clearly never been greater.
A simple solution
But enough of the doom and gloom. The good news is that as criminal tactics advance and become better targeted, the techniques to fight them are getting more sophisticated too. In fact, for fleet operators especially, a range of effective ways to combat fraudulent behaviour exist already. And as with so many issues faced over the years, the first and most important step to take is actually the most straightforward.
To illustrate the point, let’s assume for a moment that you probably have a debit or credit card. Possibly both. Now consider what you do with your pin code for that card. The chances are you keep it safely stored in your head. And given that fuel cards are really just credit cards too, it follows that we should therefore take the security of their pin code just as seriously as we do for our personal cards.
Unfortunately, this is not always the case, which can make life incredibly easy for criminals. Yet, on the plus side, it also means that just by helping drivers and staff learn how to ensure the security of their fuel card pin, fleet managers could eliminate a large number of fraud cases virtually overnight.
So far, so simple, but of course, not everything is quite that clear-cut.
There are also more complex types of criminal behaviour, including card copying, falsified or hijacked accounts and abuse of genuine fuel cards, which require hi-tech anti-fraud solutions to minimise impact. Such solutions can also help to alleviate some of the pressure on busy fleet managers by allowing them to focus not just on matters of security but on wider operational concerns.
One such tactic is to encourage drivers to fill up at stations with comprehensive onsite security measures, in particular CCTV. This is a serious deterrent to fraud because of its success in identifying – and, ultimately, catching – perpetrators.
Equally important is to ensure that existing management tools are being employed as effectively as possible. This is especially true for online fuel card solutions, which can help users analyse transactions according to specific criteria – such as when, where and by whom a fuel card is used – and receive personalised alerts if a payment occurs outside the ‘normal’ pattern or exceeds a pre-set maximum fill-up limit. This, in turn, means potentially fraudulent behaviour can be detected early and, crucially, allows for a swift response.
The final step is for fleet operators to work with a fuel card partner offering cutting-edge anti-fraud techniques.
Criminal tactics change and adapt, so it is up to companies like Shell to help its partners stay one step ahead of the game. That includes offering sophisticated technologies, such as online systems for real time fraud detection and dedicated teams of anti-fraud experts, who review transactions with up-to-date country specific and fraud trend knowledge. Both are highly effective in minimising the impact of criminal behaviour.
But what does all this mean for the battle against card payment fraud? Primarily, that it’s going to run and run. Indeed, as long as the world’s appetite for cashless payments continues, card fraud will go on. For fleet operators, working with a fuel card provider with a proven ability to combat illegal behaviour is therefore imperative – an approach that should be supplemented by ongoing staff education around proper fuel card pin handling and secure fill-up locations.
Put another way, the best way for businesses to achieve payment security success and protect drivers from fraud is to ensure they have the tools and techniques to make life as difficult as possible for criminals. Beyond that, it is only by constantly refining, reinventing and renewing our methods of fraud prevention that this race can ever truly be won.