What 98 Pct Of Consumers Miss About Protecting Their Cards From Fraud

From finding a nearby restaurant to finding a date, smartphone location controls are used by consumers for many cases. These mobile controls, however, also offer consumers a powerful tool for dealing with arguably higher stakes: the risk of credit card fraud. Location controls can be used to prevent merchants from charging consumers’ credit cards if their smartphones aren’t close by, and restrict purchases to a particular geographic area or country.

As a part of fraud protection efforts, card issuers and financial institutions (FIs) already flag unusual locations for potentially fraudulent payments. Location controls, however, can reflect account holders’ personal travel and spending habits, providing more sophisticated safeguards than anti-fraud algorithms alone.

Despite this potential for improved mobile security, location-based services are scarcely used by consumers to protect their accounts. In the latest installment of the Mobile Card Services Playbook series, a collaboration with Ondot Systems, PYMNTS surveyed 9,500 U.S. consumers to analyze why more consumers aren’t taking advantage of location control tools.

While only 1.4 percent of consumers currently use services similar to location controls, their interest in them is another story. Consumers recognize location controls as a way to gain greater control over where their credit and debit cards are used. The research shows that 52.9 percent of consumers believe location controls could reduce their fraud risk.

Consumers are particularly interested in using the mobile controls to restrict credit and debit card usage by merchants within a certain proximity of a smartphone. More than 44 percent of respondents cited this as an attractive feature. Other functions are similarly popular, such as being able to limit domestic and international card usage.

Location controls are also appealing to consumers with financial dependents, an indication that they view the service as a way to keep loved ones and others from misusing a shared account. For example, 17.4 percent of those under the age of 35 who provide financial support described themselves as “extremely interested” in location controls, compared to the 13.8 percent of their peers without dependents. In the 35-to-64 age bracket, 27.4 percent of those who support dependents currently use the mobile services, compared to the 21.4 percent who do not. On the other hand, respondents aged 65 and up who do not provide financial support stood out as the least knowledgeable about location control availability, with 61.4 percent unaware of it.

One reason consumers may not be leaping into using mobile location services could be concerns about data theft and security. According to the research, 33.8 percent of consumers are deterred from using location controls by the possibility that their payment data could be stolen.

To learn more about consumers’ perspectives on location controls and their untapped potential, download the report.



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border. Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.