Introduction
When it comes to online payments, there’s no better payment method than a purchase card. But like any other type of credit card, they can have their share of downsides as well. In this article, we’ll explore some risks associated with purchase cards and how you can minimize them in your business.
Account compromise
Account compromise is the act of one or more people using your account information to make purchases.
- A thief could steal your credit card and use it to buy something online.
- A hacker could get access to your email account and spam everyone in it with links that promise free stuff, but instead lead them through a phishing site that steals their personal information.
- However, if you know what is a purchasing card you can better learn avoiding these risks.
Unauthorized purchases
The most common risk associated with purchase cards is unauthorized purchases. If you’ve ever had one of these, then you know how difficult it can be to get reimbursed for something you bought with your card when the person who made the purchase didn’t have your permission to use it.
It’s important that people know how easy it is for someone else to misuse their credit card—and what this might mean for them in the future if they don’t take steps now.
Purchase card abuse and misuse
Purchase cards are easy to misuse and abuse. Cardholders can spend more than they are allowed, especially if they buy something that isn’t approved by the card issuer. In addition, purchase cards can be used for personal purchases, which may not be in line with the cardholder’s goals or needs.
For example:
- A purchase card holder may want to buy a gift for their partner but doesn’t have enough cash on hand. They get an eligible item from their favorite store using one of those special discount offers available with these type of cards—and then spend more than $500 without paying for it!
Fraudulent purchase card issuances
- Fraudulent purchase cards can be issued by the employee who is responsible for issuing the card.
- Fraudulent purchase cards can also be issued by an employee who receives them, then passes them on to another person.
- Finally, fraudulent purchase cards can also be used in a merchant’s system without their knowledge or consent.
Lost/stolen cards
You can protect your cards from being lost or stolen by using a strong password and keeping them in a safe place. It’s also important to keep track of where you keep your credit card as well as how long it has been since the last time you used it. If you notice that someone has taken out an unauthorized amount on one of your cards, call customer service immediately so they can reverse the transaction and stop any damage from occurring.
If something bad happens with one of these purchases (for example: if someone steals it), then there are two options available:
- Report it immediately to Chase bank so that they can investigate what happened and help prevent this from happening again in the future (this will take up to 24 hours). This option is only available when dealing directly with Chase Bank themselves; however, there are other ways for customers who prefer not dealing directly with banks such as CitiBank or Wells Fargo Bank which we’ll discuss later!
Merchant fraud
Merchant fraud is when a merchant overcharges for goods or services. It can occur at any time during the transaction process and be difficult to detect, prosecute, recover from and prevent.
Merchant fraud can be particularly damaging in circumstances where there is no direct victim (such as when you buy something online), but it can still cause significant financial loss if it leads to higher premiums on your insurance policy.
Purchase card programs can be susceptible to risk due to the open-ended nature of the payment method.
Purchase card programs are open-ended, meaning that there is no limit to the number of purchases that can be made with a purchase card. This can be a great benefit to consumers, who may find themselves wanting to make multiple purchases from multiple merchants in a short period of time. However, there are also risks associated with this type of payment method—the main one being an open-ended nature can cause fraud and identity theft.
In addition to this risk, purchase cards typically have no regulation or security requirements when it comes to processing payments (though some banks will require you sign up for online statements). This means that your information could easily be accessed by hackers attempting to steal your identity; however, most merchants will still accept them as long as they meet their requirements such as being validly issued by an issuer authorized by law enforcement agencies like Visa® or MasterCard®
Conclusion
We hope this article has helped you to understand the risks associated with purchase cards. Please feel free to reach out if you have questions or need help determining which products may be best suited for your business needs.