Company Spotlight

Guess Who’s Entering The Mobile Authentication Business?

Who better than a mobile operator to actually deploy mobile authentication solutions for commerce? Well, that’s at least the opinion of AT&T who soon plans to test a service for international travelers so that they can avoid declined card transactions. How will their solution compete with others already in market?

In February, MasterCard and Syniverse announced they were testing a service in which MasterCard customers could opt in to a mobile-payment program activated when they enter a predetermined geographic location outside of their normal service area. The goal was to eliminate transaction denials caused by issuers’ or merchants’ overly conservative fraud-prevention measures.

Now AT&T plans to pilot a similar service for international travelers. The initiative is designed to enable companies to confirm the location of customers participating in the fraud-protection service.

Citing Nilson Report data, AT&T says the cost of global payment card fraud grew by 10.2 percent in 2013, to $12.42 billion. Verification of customer identity was the top challenge in controlling international fraud last year according to Javelin Strategy & Research.

AT&T is adding the new capability to its Location Information Services portfolio via an application programming interface (API), which can proactively notify companies when their customers who opt-in for the service arrive in a new country. The telco says it will begin a pilot this summer, and the company expects to deploy the service to enterprise customers later this year. It intends to make it available in more than 150 countries.

When in use, a credit card company could confirm when customers have traveled to a new country as soon as they land and turn on their mobile device. In doing so, credit card companies can make more informed decisions on whether to approve their purchases, AT&T said in the announcement of the initiative.

Other ways in which companies may use the service include tracking the movement of equipment to prevent stolen assets, or a hospitality company may offer an enhanced experience for travelers and reference a customer’s location to provide local restaurant listings, AT&T said.

“Companies want to get ahead of customer expectations, offer new ways to solve challenges and differentiate from their competitors,” Laura Merling, AT&T vice president of business digital experience, said in a statement. “Our new Location Information Services API does that by allowing enterprises to provide an extra layer of credit card security, keep track of valuable assets, and enhance a traveler’s experience with timely local information.”

The new phone-tracking service builds on AT&T’s Mobile Identity API Toolkit, which launched in December. The toolkit is designed to help make mobile transactions safer by allowing businesses to authenticate the identities of subscribers on the AT&T network.

In February, James Davlouros, MasterCard’s vice president of global strategic alliances, framed the card network’s similar program during a podcast interview. He cited the areas of travel planning, information alert channels and retail messaging as just a few ways in which the partnership will evolve in the months ahead.

In a June 6 statement, MasterCard noted that it continues to work with Syniverse to roll out a global solution that connects mobile network operators and financial institutions in geographies globally.

Like AT&T’s service, MasterCard’s requires cardholders to opt in to participate. “The solution aims to reduce consumers’ frustrations associated with having their payment cards used without their knowledge or having their own transactions unnecessarily declined when trying to make purchases in another country,” MasterCard said in the statement. “Financial institutions will also have an additional tool that will help them make more effective decisions when approving or declining a transaction on behalf of their customers.”

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