Security & Fraud

Payment Security In The Palm Of (The Cardholder’s) Hand

Imagine if your payments – or at least the technology powering them – were smart enough to know that a customer’s mobile device being in one location while a payment is made in another could mean fraud. PYMNTS recently caught up with John Badovinac, Director of Developer Partnerships at TSYS, to discuss how access to open platforms is fueling game-changing innovation.

How do you turn a consumer’s mobile device into an extra layer of security for in-store transactions?

TSYS' latest Mobile Locator Service concept may have the capability to do just that. John Badovinac, Director of Developer Partnerships at TSYS, says that way if a person’s mobile device location says they are in San Francisco, but a retail store purchase is being attempted with their credit card data in New York City, it is a sure bet that some type of fraud is probably taking place.

Theoretically, if a customer were to install their credit card company’s mobile app and then authorize the use of the mobile locator feature concept, it would be able to identify whether the customer’s mobile device is near the payment card reader where the attempted transaction is taking place.

Once a customer installs their credit card company’s mobile app and then authorizes the use of the mobile locator feature, it can identify whether the customer’s mobile device is near the payment card reader where the attempted transaction is taking place.

This capability is made possible, in part, Badovinac noted, because of its access to toolsets made available through Visa's Developer Platform. Though TSYS is currently vetting four use cases, Badovinac spoke specifically to how access to these APIs can help TSYS develop new products and services that can increase security for cardholders - and enable what Badovinac describes as the top priority for TSYS: improving user experiences at the point of sale.

“There's so much going on with mobile development and it’s a different group of players that are helping us with our mobile projects, which allows us to connect more quickly with new entrants and niches that we haven't yet explored. But it also enables us to give them tools to innovate faster with us in a secure manner," he explained.

Building on that concept is one that utilizes tokenization as a tool for merchants to set up secure, recurring payments for their customers.

A business like a gym or a dry cleaner would essentially be able to configure a token using a smartphone or a tablet in order to set up and process ongoing payments, taking the customer’s credit card data out of the system and instead using a secure token for all subsequent transactions.

“Rather than storing card data at the POS, it's storing a token – making customers less susceptible to a breach and making us, as a payment ecosystem more secure,” Badovinac said.

As the payments landscape continues to evolve and move toward newer technologies such as wearables and the Internet of Things, Badovinac pointed out the importance of connecting together the guts of the payments infrastructure in order to inject commerce into these new experiences.

"People don't want to wake up and go make payments, people want to get up and do stuff. This type of relationship based on application-to-application calls or interfaces can enable invisible payments and those new experiences like that,” he added.

“There are people out there who will be able to take these ideas and run with them, it's just an exciting time for us, not just as members of the payments ecosystem, but also as consumers.”



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.