Meet Divvy, the Newest, Most Secure Payment Platform

January 15, 2018         By: Blake Murray

Expense management can be summed up in one word: complicated. The process starts by borrowing a corporate card or using a personal card to make a purchase, then tucking away the receipt and frantically searching for it again at the end of the month, and finally, spending hours filing expense reports only to then wait days or even weeks for reimbursements.

And this is just the beginning of the expense management problem. What about the wasteful spending due to the lack of budgets and visibility? Or the small, fraudulent charges from employees here and there on altered expense reports and shared cards? And don’t forget the possible security breaches when sharing and storing data and financial information online. I’ve spent years creating Divvy in order to solve these, and other problems most business owners don’t realize are severely impacting their bottom lines.

The Problem

On November 22, 2016, Uber experienced every company’s nightmare in today’s digital age—a data breach. Hackers broke into the company’s database and stole the personal information of 57 million Uber users, including their names, email addresses, driver’s licence numbers and phone numbers.

Expensify experienced a similar nightmare when their security was questioned after the public found out the company’s claimed “Artificial Intelligence” receipt-readers were actually run manually by workers, namely, Mechanical Turks.

The news highlights a much more troubling problem in the AI world. As author Amy Martyn put it in her November Consumer Affairs article, “Many startup companies, with Expensify as just one example, collect so much personal data on their users that they become, in essence, … an intelligence agency, and thus a prime target to hackers.”

As more companies go digital, the security risks increase exponentially. And unless companies are willing to hire a professional encryptor to develop top notch security, such as 256-bit Secure Socket Layer (SSL) encryption, they put themselves at risk for security breaches that put the company not only in danger of blackmail and extortion, but also at risk of losing the confidence and support of their user base.

But hacking isn’t the only threat to company accounts. Fraud committed by employees is becoming more prevalent in the reality of today’s business owners. Craig Greene, founding partner of McGovern Greene LLP, a forensic accounting firm, gives a great example of how this is done. He explains, “It is very easy to commit fraud these days. The tech of today makes it really easy to make up documents. I book a flight on Southwest to Las Vegas from Orange County on an alleged business trip, get a quote of $226, and Southwest sends me the itinerary, which is what most people submit for their expenditures. I go into Microsoft Word and change the $226 to $426, and — boom! — I just made $200.”

The most recent Report to the Nations on Occupational Fraud and Abuse said that this type of fraud (travel and entertainment fraud) alone accounts for 14.5 percent of all committed fraud. And this number is increasing as employees find it easier to slip in personal perks with their corporate card without notice.

The typical organization loses 5 percent of revenue in a given year as a result of fraud,

according to the Association of Certified Fraud Examiners’ (ACFE) 2016 Report. For large companies like Walmart, that could add up to $42.1 billion in losses in year, and for small to medium-sized businesses (SMBs), $1.25 million.

Companies are ignorant to most fraud because they either don’t budget effectively, or they take a reactive approach with their budgeting efforts. For example, most payment systems don’t send bank or transaction statements until the end of the month. But by that time, controllers and CFOs are left playing catch up with their budget and employee expenses. This traditional process makes it difficult to notice small losses from fraud or wasteful spending.

Attempted Solutions

While companies have tried to find solutions to these problems, they’ve been largely ineffective. Most of the solutions on the market are heavily centered on healing the pain of expense reporting. For example, companies like Concur and Expensify help speed up the expense report and reimbursement process by offering users the ability to snap a picture of the receipt, making the processing of invoices and reimbursements 30 percent faster.

However, that process is still a reactive one. None of these solutions provide a budgeting platform, nor do they regulate any employee spending. Fraud is still free game.

The solutions for wasteful spending aren’t much better. Most banking companies create an option for users to choose from a corporate card or a prepaid card. Companies feed off of reward systems and points when they spend using these cards. However, as companies grow, it’s more difficult to keep track of each card, especially when multiple employees are given access to each one.

Card sharing is a common problem many businesses face, but the seemingly harmless behavior exposes you to fraud and makes for a disastrous audit trail. For example, maybe one of your administrators needed to use the corporate credit card to buy a flight. But then, he uses it to take a client to lunch or to order decorations for the company party. He then passes it to the intern for donuts and you haven’t seen it since. In fact, who knows how many people have used your corporate card? This lack of visibility can be disastrous for a budget.

Another risk for corporate cards comes from punching in a single card number for every online subscription (e.g., Slack, Microsoft, Uber). If one card gets compromised, every single one of those subscriptions must then be secured and updated—a lengthy and frustrating process. Corporate cards overall lack in both visibility and control when it comes to regulating overspend by setting specific limits to individual payments.

Our Solution

Divvy, unlike any other solution in the industry, doesn’t just speed up the expense management process, it breaks it down into a simple, secure and proactive payment platform. We’ve worked hard to solve the tedious expense report process, eliminate the risk of fraud and hacking and enable companies to easily budget to prevent wasteful spending. Here’s how:

Divvy eliminates the need to keep receipts and file for reimbursements by automating each transaction in real-time. To do this, users must use a Divvy card (physical or virtual) to make a payment. Then the Divvy web app automatically uploads each payment into an exportable file for your accounting software. This way, employees don’t have to create expense reports, and controllers don’t have to chase them; Divvy automates the entire process.

What I learned from my own experience trying to manage budgets and employee expense reports is that the major pain point in this whole process comes from wasting or losing company funds and trying to figure out where we went wrong only after the damage was already done. So instead, we created a system to prevent wasteful spending and fraud in the first place.

Using the Divvy app, admins can create and categorize budgets for teams or individuals to preemptively limit the spend on each budget and/or card. When an employee needs to access funds, he or she makes a request on the app—just as they would on Venmo—for the amount and purpose. Then admins can approve or deny the funds.

Admins also have complete visibility of all transactions as they happen, so you’ll always know if, for example, the funds were used for personal purchases. In other words, fraudulent spending will not go unnoticed.

Divvy not only prevents employee fraud, but also prevents any third-party fraud, overcharge or unexpected fees, especially when it comes to subscriptions. Using Divvy virtual cards, employees can create and assign an individual virtual card for each subscription. This way, specific budgets and limits can be set for each subscription, and in the event that a card is compromised, you can simply trash the virtual card with a single swipe and generate a new one without affecting the other subscription payment methods.

SMB owners can avoid the mess of expense reports, fraud, budgeting and subscription management using Divvy’s secure financial platform. Launched in 2016, Divvy has had no problem finding users. With hundreds waiting to onboard, current customers are already saving thousands this month. Here’s one of them:

Case Study: Friendemic

About Friendemic

Friendemic is a fast-growing leader in social media management and online reputation. Founded in 2010, it offers its clients “everything social media,” including DIY software tools, social advertising and organic engagement.

Clutch, a ratings and reviews firm based in Washington D.C., recently rated Friendemic in the top 15 social media marketing agencies. Coming in at No. 7, Friendemic has more than 5,000 projects, 100 employees, and an average price range of $100-$149 per hour.

Finding Divvy

While Friendemic was hitting the rankings as a top social media marketing firm, it had some internal room for improvement when it came to organizing their own company expenses. Expense reports and constant nagging for receipts and reimbursements took a toll on how the company managed payments, and exhausted any time for creating and monitoring budgets.

“Honestly, I spent too much time on expense reports,” Friendemic CFO Travis Landry said. “We never really spent any time on budgeting because we were too busy trying to gather receipts and expense reports.”

Friendemic jumped on the opportunity to start using Divvy in August 2017 after seeing how it simplified expense management and promoted secure budgeting. Divvy not only got rid of Friendemic’s tedious expense reporting process, but also created a budgeting system for every employee to use based on individual and departmental needs.

“Divvy helped us organize, assign and monitor our spending,” Landry said. “I love that at any moment I can log in and see who just spent money. It is so user friendly for me as the CFO, but also super easy for our staff to use and comprehend.”

Results of Using Divvy

  • Time: Before Divvy, Friendemic spent 25 hours a month completing expense reports. With Divvy, it now takes roughly two hours.

  • Money: Friendemic has calculated an average monthly savings of $700 using Divvy. With real-time transaction monitoring and secure budgeting, Friendemic proactively prevents any unauthorized or wasteful spending.

  • Budgets: Friendemic went from spending 0 to 5 hours a month budgeting.


Author Bio:

Blake Murray is the CEO of Divvy, a secure financial platform for businesses to manage payments and subscriptions, build strategic budgets, and eliminate expense reports. When not neck deep in building Divvy, he enjoys playing sports with his three kids and traveling with his wife.