Visa customers’ lives are about to get that much easier when they are planning to be traveling far from home. Whereas it was once necessary to call the bank before leaving or risk the bank turning off the card for fear of fraud at the first foreign swipe, now it seems Visa customers will be able to skip that step.
Visa is offering its banking partners location tracking. The new service uses customers’ smartphones to verify their locations whenever a card is swiped. In the event of a mismatch, Visa uses additional screening measures to determine if the use is legit; the card won’t be cut off just because because someone happened to forget their cell phone in a hotel room.
A location match indicates a lower likelihood of fraud, giving banks less incentive to mistakenly decline a legitimate transaction even if otherwise looks suspicious. Visa estimates it can take a 30 percent bite out of bad transaction denials with the new tech.
So how does Visa know which smartphone is yours for tracking purposes? The card company is working with card-issuing banks to embed a location-tracking module into their regular banking apps. Visa partner Finsphere, a geospatial analytics company and Visa partner, pings the app to locate the phone and then reports its findings to Visa.
PinPoint, a similar service developed in jointly by Finsphere and Location Labs, launched in 2010. PinPoint did many of the same calculations the Visa program will soon be carrying out and alerted users to possible fraud occurring on their cards. The difference is that Finsphere’s collaboration with Visa directly affects whether a transaction is approved or declined.
Consumers have to opt into the service, so your bank won’t track you — at least not wirelessly — without permission.
Finsphere CEO Mike Buhrmann noted in an email to Gigaom that Finsphere and Visa only collect the location data necessary to make fraud determinations; once that is done, they discard the data. Visa further noted that location tracking is only active when you’re outside of your home area and that the info gathered is not for marketing purposes.
“No running tab is kept, but we do know your last region of location so transactions can more effortlessly be approved or actual fraud detected in case you lost your credit card,” Buhrmann said.