Corporate cards

Small business credit card fraud - How to prevent?

May 26, 2023

In recent years, there has been an increase in the number of unauthorized transactions in Singapore. Police reported in 2020 that there were 1,848 reports of unauthorized transactions, where criminals would steal the banking and credit information of their victims.


This shows that small business credit card fraud attempts are more of a threat now than ever. Fraud can not only result in huge monetary losses but also be a hit on a business’s reputation. With this in mind, businesses need to be more mindful of credit card fraud and arm themselves with both preventive and corrective measures.

What is credit card fraud?


To put it simply, credit card fraud happens when someone makes an unauthorized transaction on your credit card. There are different types of credit card fraud.


For example, a scammer may steal your credit card information and use that information to make purchases without your knowledge.


Small business credit card fraud can also occur when you physically lose your card, resulting in someone else procuring and using it.

How does credit card fraud happen?


Methods like phishing or skimming, which involve copying your credit card information without your knowledge, and outright stealing your card are some ways small business credit card fraud can happen. You need to be aware of all the ways your information can be stolen to prevent it.


1. Stolen cards


If you carry around physical cards, you need to make sure that you keep them safe and do not misplace them.


Criminals may misuse your card upon finding it, or even outright steal it from you. Once the card is in their possession, they will use it to commit small business credit card fraud.


2. Phishing and skimming


Be careful of where you store your information and what you download. Techniques like phishing and skimming can copy your card information without your knowledge, letting hackers use that information as they will.


You want to be sure that you’re not clicking on any suspicious download links that could enable hackers to steal your information.


3. Application fraud


Other than stealing your card or card information, criminals could also steal your personal information like your full name, address, and phone number to procure a card under your name.


They’ll change the mailing address so you won’t ever receive the card, but you’ll be responsible for clearing the bill after they use it.


4. Account hijacking


Application fraud isn’t where it stops. After stealing your identity to apply for a new card, criminals will be able to tell the bank your card has been lost and they’ll require a new card. They will also change your mailing address to send a new card to them and use it as they wish.


5. Data breaches


A data breach can happen to anything from a single card to hundreds of cards. In short, data breaches happen when unauthorized parties gain access to your card data.


Oftentimes, this will happen at a provider level instead of an individual level, so you want to pick a provider with tight security.


6. Interception


It’s possible for hackers to ‘intercept’ your emails and view their content to steal your personal and card information. This is why it’s important to ensure that you limit access to sensitive data such as these and implement security measures for your email exchanges.


Choose a trusted email provider to make sure your emails are safe.


7. Employee fraud


Unfortunately, internal fraud attempts caused by employees misusing cards can also happen from time to time.


While this shouldn’t stop you from allowing your employees to make business expenses, you should implement strict corporate credit card policies and monitor employee spending to avoid running into any employee fraud attempts.

How does credit card fraud affect businesses?

Financial loss

The most obvious negative impact of small business credit card fraud is that it will result in financial losses for the business.


When criminals hijack your cards or card information, they will likely use it to make large unauthorized purchases. If you don’t stop it immediately, you could end up with an enormous credit bill.

Damage to reputation

Being a victim of small business credit card fraud is not a good look for any business. If word goes out that a business has been victim to card fraud previously, it could take a hit on its reputation.


Existing and potential clients may be wary of doing business with fraud victims in fear of their own data security.

Increased security cost

Even if a criminal doesn’t steal a large amount of money from your cards, the damage that credit card fraud can still be costly. You’ll have to reinvest in more security to prevent any further incidents.


Compared to investing in preventive measures prior to card fraud happening, this could end up being more expensive.

Personal damages

It’s not only clients and external parties who would be wary of businesses that have been victims of small business credit card fraud.


If your business suffers from credit card fraud, then chances are your employees will also be on guard. They may start questioning the legitimacy of your business and its security measures, causing demotivation.

Steps to take if your business is a victim of credit card fraud



1. Change your credentials


When a credit card fraud attempt hits your business, you want to change your credentials as soon as possible to disable any scammers or hackers from accessing your information.


Make sure that you reset your passwords and cut off their access to your accounts before more damage is done. 


2. Check card statements for suspicious transactions


It may be difficult to track how much damage the credit card fraud attempt has cost your business.


What you can do to gauge this, collect evidence, and prevent any further damage is to check your card statements. Make a list of all suspicious transactions to report to your card issuer and authorities.


3. Contact credit card issuer


It’s important that you contact your credit card issuer as soon as possible. You want to get your cards frozen and blocked to stop any fraudulent activities.


Your business credit card issuer will also be able to help and guide you through the next steps, such as changing your credentials or filing legal reports.


4. Inform legal authorities


After you contact your credit card issuer, typically the next step that they’d advise you to take is to file a police report. This could help stop the criminals from causing further damage to your business, and in some cases, you may be able to recover some of the money you’ve lost.


5. Review your security measures


The last thing you want to happen after a fraud attempt is for it to happen again.


As soon as you recognize that your business has fallen victim to small business credit card fraud, you should immediately review your security measures and see if there are any gaps. You want to reduce these risks as soon as possible.


6. Contact insurance company


Depending on your insurance company and the plan that you have, your insurance may cover small business credit card fraud.


In that case, you could contact the insurance company and ask for details and guidance on how to file a claim.


However, keep in mind that while you may receive a payout, it could affect your future insurance premiums.

Switch to virtual cards for business payments

Eliminate the risk of small business credit card fraud with virtual cards
Learn more

How to prevent business credit card fraud from happening?



Review card statements


Make it a habit to review your card statements regularly. You won’t know that there have been any fraud attempts until it’s too late unless you’re aware of what transactions you and your employees are making.


Make sure that all the transactions on your card statement are actually ones that you have made. 


Secure your card data


It’s important that you have preventive security measures in place.


Make sure that your business credit card provider has all the industry-standard certifications to ensure your card data security. You want all your card data to be inaccessible to unauthorized parties and kept in a place that you can guarantee is secure.


Explore the future of secure payments with our comprehensive guide on virtual credit card. Discover how having a virtual credit card can help your organization in establishing better control over business expenses without compromising on security.


Limit access to sensitive information


One of the reasons why card sharing is risky is that you don’t know how many people have access to your card information.


Ideally, you want to keep track of who has what information within your organization. Have policies in place to help ensure that only concerned personnel have access to sensitive information.


Do proper vendor verification before making payments


The last thing you want is for your data to be stolen while you’re trying to make a vendor payment.


Make sure that when you’re entering your card data to make payments, your vendor information is correct and verified. You don’t want to accidentally send card data to scammers pretending to be your vendors.


Educate your employees


Considering that there are many types of credit card fraud, you want to prepare your employees for all of them.


Educate your employees on each type of small business credit card fraud and what preventive and corrective measures can be taken.


The more educated your employees are, the least likely fraud attempts will occur.


Set transaction alerts


You may not always be on standby to review your card statements at all times. This is where transaction alerts come in.


You can set them for large transactions, ensuring that you’ll get notified whenever they happen.


Be sure to read them thoroughly to confirm that they’re authorized transactions within your business.


Have a strong credit card policy within the organization


Implementing a strong and clear business credit card policy within your company is a great preventive measure.


When everyone in your organization is on the same page, it makes it more difficult for scammers and hackers to get your credit card information.


Not only that, but employees will also be mindful to not misuse their cards.


Switch to virtual cards


Physical cards can get stolen, lost, or misplaced. If you’re not careful, they can be susceptible to many types of credit card fraud.


Making the switch to virtual cards eliminates the tangible element. It allows you to not worry about where you physically store your card, thus reducing the risk of small business credit card fraud. 


Read our article to discover the best virtual cards for businesses in Singapore in 2024.

Secure your business payments with corporate virtual cards


Small business credit card fraud is definitely something that you should familiarize yourself with. It’s important that you know what preventive measures to take to avoid fraud attempts, as well as what can be done should an unfortunate attempt occur to recover from it.


Luckily, there are many corporate card providers that can help you mitigate these fraud risks. Volopy offers corporate cards and an expense management system with industry-standard certifications to ensure the safety of your data. With Volopay virtual cards, you won’t have to worry about misplacing your cards.



Also, check out our article to know the 10 use cases of using virtual cards for business payments.

Streamline your business payments with Volopay

Get in touch to discuss the virtual card options!
Contact us now