Thursday, April 24, 2008

Micromanaging employee expenditures

I'm not sure how I feel about this. Apparently, MasterCard is introducing a feature for corporate cards that allows employers to set very strict parameters on spending. Economy class? Ok. Business class. Nope. HoJo's? Ok. Strip clubs? Not so much. The card also has detailed reporting that allows employers to keep close tabs on spending.

If an employee is spending the employer's money, it makes sense that the employer can set parameters on it. Business Week's article (You've Been Pre-Rejected) on the topic suggests that it smacks of big brother, but a lot of thinking about privacy depends upon peoples' expectations. If people understand what information is being collected and how it will be used (and it is reasonable), it is less likely that whatever is at issue will be seen as an invasion of privacy. Employees who use a corporate card where they know that the bill goes to the employer first can't reasonably be surprised if their employer gets upset over use of the card that does not fit within company policy. If employees know that the employer can set strict controls on the use of the card, I don't see the problem. If employees similarly are informed that the employer can see the bill in detail, it shouldn't be a problem.

Where the problems arise (and I'm sure they will) is that employers will use this product without telling the employees. The surveillance will be covert, which is much more pernicious and DOES lead to the big brother syndrome. You don't know when you're being observed and thsi leads to mistrust and insecurity. And it can also backfire: if an employee does not feel trusted, many will not act trustworthily (if that's a word!).

The product is also being touted as a tool for parents to keep track on kids' spending. Again, if you're spending someone elses' money they probably have a right to control how it is spent. But similarly, they'll have to make sure that their kids' expectations are tempered by the knowledge that Big Father (or Big Mother) is watching.

At the same time, I think the new MasterCard feature can be a benefit for privacy. Your (personal) credit card number and your (personal) credit card account are your personal information and you have a right to know how it is being used. I'd pay extra for a card that sent me a text message to advise of each charge. I'd be immediately alerted to any fraudulent use of the card and would be in a much better position to protect my own personal information. Whether this will be demanded as a card feature remains to be seen. But it is an example of a technology that can be intrusive and a boon to privacy at the same time. It depends upon how it is used and whether the user knows all about its features.

1 comment:

Anonymous said...

You'd pay extra to receive a TM for each transaction? Be careful what you wish for. Doing that could be the precursor to shifting the onus for fraudulent use of a credit card number onto the card holder.

After all, if you've been notified of each transaction, it's easy to say that you're responsible to notify the card issuer of any inappropriate transactions.

What would that do to the balance sheets of banks and credit card issuers -- who now self-insure and, despite mounting losses from fraud, still manage to earn billions each quarter.