Ms. Stone

Revenue Management

Keeping Your Corporate Payments Secure

The Greatest Threat May Also be the Greatest Protection

By Heather Stone, Global Executive Vice President, CSI Enterprises

Understanding and addressing the reasons behind and risks associated with payments processing is a critical issue in the hospitality industry. This introduction to payments fraud provides critical knowledge for anyone dealing with accounting, payments, or vendor relationships.

As the internet continues to usher in a new era of productivity new technologies consistently and dramatically improve the way we work. But along with that evolution has come a new era of cyber security threats. I have been traveling coast-to-coast speaking to business-to-business (B2B) financial executives on this very subject, and from my conversations with CFOs and treasury managers alike the single most pressing issue across all industries is the security of payments. If you think about it, transactions are happening continuously and around the globe so even though you may not be present when these transactions physically occur, your financial likeness is.

The 2017 AFP Payments Fraud and Control Survey examined the trends in payments fraud on business-to-business (B2B) activities. The survey found that 74 percent of participants reported their organizations were exposed to either attempted or actual payment-related fraud in 2016. Business email compromise scams, with reports of wire fraud, increased from just five percent in 2009 to a staggering 48 percent in 2015.

For hotel executives this payments-related fraud is especially troubling with security breaches at global hotel chains making headlines in recent years. Whether the fraudulent activity happens as an insider threat or through the use of a hotel room, it is happening on a daily basis. Executives in the hospitality industry are unified in their beliefs that these concerns could have been alleviated with a better understanding of technology options available today which were designed to mitigate these fraudulent activities and protect the hotel, its employees, and guests.

These innovations actually turn the tide on those security threats by streamlining and transforming the payment process into a touchless workflow - from invoicing all the way through payment processing - without manual error or intervention from hackers. This affords everyone a significantly larger level of protection while enabling businesses to "carry on" as should be done.

This may seem counter-intuitive to those who think of the internet as the root of all security threats, but the process of electronically escorting an invoice through its journey from approval to payment is a bit like protecting that invoice within a virtual steel vault every step of the way.

Automation Removes Human Error and the Risk of Fraudulent Invoices

Not all payment errors are done with malicious intent. Human error accounts for over half of all security breaches. As careful as we are in our daily jobs it is inevitable that at times we still make mistakes and poor decisions. Those mistakes can easily slip through the cracks and be missed as they progress through the layers of manual approval processes.

These challenges include being duped by business email scams. The FBI recently released a report that stated that these scams resulted in $5.3 billion in attempted fraud between 2013 and 2016. This deceit relies on human involvement and the ability to fool the individuals involved. Don't think it can happen to you or your staff? It can! Let's take a look at one example that everyone can relate to.

Most business executives recognize the importance of a strong LinkedIn profile. But this profile also serves as a gold mine full of rich data that a hacker can use to manipulate and scam. This single profile - which includes your network of co-workers - provides powerful ammunition for a harmless email that might read something like this:

"Hey Rick (they know your name), I was talking with David (they know your boss' name) at the conference last week (they know David was scheduled to speak at that conference) and he's agreed to sponsor our next event. Can you please wire that $5,000 (they can guess the dollar amount that doesn't need approval) by end of day so we have time to get his speaking engagement in the program before we go to print tomorrow (they know you're not going to want to take the blame when your boss is angry that his name isn't in the program!)?"

LinkedIn profiles aren't the only social media and email-related targets and, while they do serve a significant business purpose, my goal is to create an awareness when using it. This is just one of many relatable examples that illustrate the gaps in manually-driven approval and payment processes. By automating the workflow with secure technology and removing human factors that lead to poor judgment, we close all of those doors and remove the ability to create and process fraudulent invoices.

Automation Provides Greater Security and Control Over Payments

While some people don't like change, it is true that automation does provide an enhanced level of security. Let's take a look at how an automated transaction traditionally occurs from the time of invoice receipt through payment. Once approved, an e-invoice is ready for payment, and it advances into the payment process workflow.

For many, the term e-payments conjures up visions of bank wires and ACH payments. While these payment methods remain relevant, they represent only a piece of the equation. Financial executives make all types of payments, including ACH, credit cards, check payments and even foreign payments requiring currency conversions. The myriad of payment methodologies deployed in a given organization is the means, by itself, to create unwitting risk.

The risks arise because these multiple payment methods have traditionally required disparate systems from multiple providers. However, the payments industry has undergone extraordinary innovation in recent years with sophisticated technologies that are designed to safeguard all of your payment data within one system. Unfortunately, while widely adopted, it is not in use everywhere in the hotel industry yet.

When exploring your payment system options it is important to look into not only the ease of use but also the technology and security behind it. Comprehensive payment systems work to automate the payment process, enabling all types of payments. It really has become as simple as uploading one payment file and relying on the secure technology to process and verify the transactions and also deliver the payment safely to the vendor.

Like the e-invoicing discussion above, an integral part of these new payment systems is the built-in workflow approval process which ensures all necessary approvals are secured before any transaction is processed. This technology further prevents unauthorized access to the data, so that clever fraudsters cannot intervene and 'trick' either the user or the system. Fraudsters are smart, and getting smarter every day, but the systems are smarter and truly mitigate the risk in their functionality alone.

Automation Simplifies Global Payments

Business is growing and never is that more true than in the hotel industry. Whether expanding operations overseas or relying on foreign manufacturers and suppliers, the hotel industry has a growing need for global payments. Yet we tend to forget that international payments are among the most complex and costly transactions to complete. They also provide the most opportunity for fraud-related issues due to additional transaction-related steps.

Global payments are so complex that they often fall outside of the scope of 'normal' payment processes. Because of this, they can go unchecked, without the close analysis and scrutiny that other payments undergo. All this is before currencies are exchanged and recalculated. The results can extend beyond wire fraud to include inflated exchange rates, excessive bank fees, or additional fees incurred by suppliers for transactions that settle outside of local currencies. And when they don't settle in a timely fashion because of bank delays or other things they can also accrue late fees.

This too is changing thanks to technology innovations. Sophisticated payments companies have global payments offerings within their platforms, thus enabling even these foreign exchange transactions to benefit from secure automation. As noted above, global payments can be included in the single payment file and disbursed to all vendors, even to some of the world's most complicated markets to navigate, such as China. Funds are then directly settled into the supplier's local bank account in their local currency thus greatly improving transparency while reducing fees.

When it comes to keeping payments secure it is important to understand that technology is not the enemy. Quite the contrary, the right technology that's built for the enterprise can be your greatest protection when it comes to keeping your invoicing and payment systems secure. Modern B2B platforms are uniquely designed to automate business workflows while protecting your most critical financial assets. At the end of the day the systems protect not only your assets but also your reputation. Just think about all the companies that do not protect their financial transactions and assets correctly. Frankly, I bet you can name a handful of them without even trying that had they automated their payments processes properly would never have seen the level of risk nor the level of media scrutiny that they underwent as a direct result.

In the hotel industry more than almost anywhere else it is essential that image and assets be protected and exposed to the least amount of risk possible. Guests, providers, and property needs are changing on a constant basis presenting a constant influx of new challenges. When you want people to work with you and to "feel at home" that means feeling safe and protected - when checking in and of course, when checking out. One of the best ways to do this is by automating your payments processing platforms and by using technology to protect your financial environment.

In 1989, Heather Stone co-founded CSI Enterprises, a highly-acclaimed and award-winning company in the 'FinTech' space, providing innovative payment solutions to some of the world's most iconic brands. As Global Executive Vice President Heather has been a driving force in developing corporate payment solutions within the company’s Electronic Accounts Payable, Mobile, Travel, P-card, fuel card and globalVCard® divisions that serve specific market needs in many verticals including manufacturing, construction, energy, hospitality, healthcare, media, sports and entertainment. Ms. Stone can be contacted at 239-595-0977 or Please visit for more information. Extended Bio... retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by

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