Finding out that your credit or debit card has been disabled while traveling around the world can result in lost sales and major frustration. Given today's smartphone and electronic banking technology you would think there was a better way to integrate the two.
Last week Visa announced Mobile Location Confirmation, powered by Finsphere. In combination with your smartphone, mobile banking application, Visa, and Finsphere's services geo-location data will be used to verify the legitimacy of your transactions.
Current practice is to call up your bank or credit card company in advance of your travel to pre-authorize card use in a location away from home. This new Visa Mobile Location Confirmation should eliminate the need for such pre-travel planning and notification while also providing enhanced security that pairs your smartphone with your physical card location.
The service is optional and will be available from various financial institutions starting in April 2015. The service will work with your smartphone whether it is connected to a cellular network or WiFi network and is under your full control. There is no wireless carrier involvement so the service is not dependent on your carrier granting access.
Finsphere stated that there is no impact on battery since the geo-location service is not in a constant pinging mode. Significant changes in location are what trigger the verification with your financial institution.
Your privacy is also maintained while the security of your card is improved over current standard pre-travel authorization. If you were to lose your card today, a thief could still use it in the same location and rack up fraudulent charges. With the Finsphere technology, your smartphone must be in the same general location as your card in order for the algorithms to verify realistic charges.
The Finsphere geospatial analysis engine analyzes the geo-location data and then transforms that data into a score that is passed along to financial institutions for authentication. Your personal data is not captured, saved, or shared. As Finsphere representatives wrote in a blog post, "Cardholder privacy, safety, and security were considered to be of paramount importance during this development process."
It's great to see financial institutions working to use today's technology to help improve our travel experiences while also increasing security and reducing credit card fraud. Data shows that merchants lose something on the order of $200 billion a year to credit card fraud so hopefully this kind of advanced technology can lower that figure.