In their ever-evolving effort to combat fraud, credit card issuers will often flag purchases outside a card holder’s home area and decline the transactions, or block future purchases.
Visa is now offering something it calls “Mobile Location Confirmation” which effectively tracks a card customer’s whereabouts in real-time via their smartphone. Visa says this will “more reliably predict whether it is the account holder or an unauthorized user making a payment with a Visa account.” The service will be available to U.S. card-issuing financial institutions in April.
The location service will plot out a home area within a radius of about 50 miles. If the card customer leaves that defined location, the smartphone tracker will relay that information to Visa, and the credit card issuer will be less likely to flag that card for fraud when purchases are made.
“Wherever you are in the world, we want Visa transactions to be the most secure, convenient and seamless payment choice,” said Mark Nelsen, senior vice president of risk products and business intelligence, Visa. “By matching the location of the cardholder through a cell phone or other mobile device, to the location of the purchase, Visa’s new service will enable banks to feel more confident about authorizing a transaction that might otherwise have been declined due to suspicion of fraud.”
The service can also save money for the banks that issue credit cards and rack up significant expenses to track suspicious transactions. According to Visa estimates, issuing financial institutions spend hundreds of millions of dollars annually to manage customer service calls related to pre-travel requests and to research declined transactions.
By providing credit card-issuing banks greater intelligence when approving transactions, Visa expects to reduce unnecessary purchase declines by as much as 30 percent, affecting millions of transactions annually.
Mobile Location Confirmation is an optional service that will be offered through participating financial institutions’ mobile banking applications.
To enroll in the service, cardholders download their card-issuer’s mobile banking app and “agree to the use of their mobile location information for fraud prevention purposes.”
Consumers can activate the service when traveling by ensuring their smartphone is periodically connected to a mobile or Wi-fi network, and can deactivate the service at any time.