Visa is rolling out the Visa Mobile Location Confirmation feature, which uses mobile geo-location information to more reliably predict whether it is the account holder or an unauthorized user making a payment with a Visa account.
It’s meant to both reduce fraud and unnecessary purchase declines often triggered when consumers travel outside of their home area. But it will require users to opt-in to be tracked geographically by the payments company.
The convenience factor may woo many to sign up for the service. Unnecessary transaction declines can mean lost sales for retailers, additional customer service costs for financial institutions and, ultimately, frustration for the cardholder if unable to make a purchase when traveling. Visa said that it expects to reduce transaction declines by as much as 30%, impacting millions of transactions annually and improving the experience for cardholders.
However, in order to make the service work, consumers should be aware that the service uses mobile geo-location data in real time as an additional input into Visa’s predictive fraud analytics. Finsphere provides Visa an analysis of the account holder’s device location data, which is then matched with the transaction location at the point of sale. When a cardholder’s mobile device is in the same location as the payment transaction, the issuing financial institution can more confidently approve the transaction.
“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 at Visa, in a statement. “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.”
To enroll in the service, cardholders download their card-issuing financial institution’s mobile banking app and agree to the use of their mobile location information for fraud prevention purposes. Consumers need to make sure that their phone is periodically connected to a mobile or Wi-Fi network, so that they can be located.
“Through Visa’s Mobile Location Confirmation service, we’re enabling more precise fraud monitoring, which creates a better payment experience for travelers, assists merchants and reduces unnecessary operational costs for financial institutions,” added Nelsen.