Security & Fraud

What Consumers Want In Transaction Alerts


In the age of sophisticated cyberfraud, and more specifically fraudulent payments, it’s not enough for cardholders around the globe to wait till their statements arrive in the mail (paper or electronic) and ferret out suspicious activity. By then the damage has been done, the trail has run cold.

To that end, TSYS, the global payments solutions provider, said earlier this month that it has begun offering its cardholder alerts solution to its clients based in Europe, with an eye on pushing information to consumers, via text, voicemail and email. MPD’s Karen Webster spoke with Morgan Beard, Strategic Marketing Director at TSYS, to discuss the benefits of issuers interacting in a proactive manner with consumers, developing a partnership in the fight against would-be thieves.

KW: [TSYS Alerts is] something that has been part of the U.S. market for a while and cardholder alerts are now travelling across the pond to Europe. Give us a little context with respect to the interest level and demand from issuers and their customers for this kind of service.

MB: Similar to what we found in North America, the cardholders in Europe really do want the ability to interact with their financial institutions — where, when and how they want. Obviously in the digital age this is going to include the mobile phone and the Web.

So [TSYS] Alerts are developing a wide appeal for consumers, particularly those that are digitally engaged. It empowers the cardholders to get the information in real time, using the preferred channel of communication.

And that’s not just us saying that — we went out and surveyed a thousand cardholders in the U.K. and Germany, and they told us very similar things.

They rank having an alert sent to their computer or mobile phone for things like use pattern and purchases made as a very valuable card feature. Well over half of the respondents in the U.K. and Germany said [these features remain important] this year and that was a very substantial increase over the people we talked to in 2015. We think there’s a very strong consumer proposition there.

KW: Let’s dig into it a little bit. There are all kinds of alerts that issuers can push out to their cardholders. But there is a fine line for what is considered helpful and what is considered intrusive and perhaps a little too much. How are you working with issuers to help them straddle that line and not really cross it?

MB: It’s a matter of putting the consumer front and center in control of that whole scenario. The ability is there for the cardholders to let their issuers know what type of alerts they want to receive. Is it for fraud alerts only? Then fine they can tick the box that says send me things that might be suspicious. If it is more granular for every single purchase being made, or for purchases within certain category codes or countries etc., the cardholder will have the opportunity to dictate those preferences. There’s the more blanket variety where the issuer can set up in terms of the general push notification.

There’s a balance between the cardholder being in direct control over those preferences, and that fits in with the strategic view of the issuer too.

KW: What’s driving this? Is it because cardholders are afraid that their cards can be used fraudulently, so they want the alert to check up on fraud? Or are they just interested in getting more information to help them keep track of their spending?

MB: Both. We see a lot of the initial implementation of this newer technological development often take place in the fraud realm. And the idea that waiting for fraudulent transactions to be uncovered when the cardholder reviews the monthly statement is frankly problematic for the issuers. Research shows that when a cardholder is the first one to discover fraud on their own — and that it comes up after the fact — that their trust level really does plummet. And that could jeopardize the wallet space and the share of the issuer.

Conversely, if you can put the cardholders — kind of deputize them — in the fight against fraud, they become much more of an active partner. They see the relationship that exists, and the partnership, in the battle against fraud. Beyond the fraud the idea is that it is just convenient to have simple things like the balance inquiry right there at your fingertips. That is pretty straightforward.

KW: What about the impact that these alerts would have on what we would all describe as friendly fraud? Kind of scamming the merchant when the merchandise has been legitimately purchased but there is a claim that “Oh I never got it, or this is really not mine …”  Is there any evidence, aside from just anecdotal, to suggest that these alerts do have an impact?

MB: I don’t have hard stats on that but I think your intuition is spot on — I think it would be much more difficult for all but the most hardened criminals to say “You know, that wasn’t me," particularly when they have the alert that is sent to the mobile phone on their person the moment the transaction occurs.

They have much less of a stand to make that says “that wasn’t me,” because the question then becomes, well, “why didn’t you respond to the alert at that time?”

KW: Is this an opt-in service for consumers or an opt-out?  And is there a regulatory requirement that makes it hard to opt-in consumers in Europe?

MB:  In London and in Brussels we have the CA and the EBC, respectively, and they are very much concerned about customer outcomes and the idea that we must simplify the communications with the cardholders is front and center at this time for the issuers. Whether it’s an opt-in or opt-out scenario very much depends on the issuer. Increasingly, we are finding these will be opt-in, but the idea is that the European market is so varied, the country by country and issuer by issuer scenario is there as well.

KW: What’s involved in enabling your solution to the issuer?

MB: The overall solution runs the gamut. Part of what we can offer is an end-to-end service where we can handle card integration and the communications to the cardholder themselves. Or, we can parcel out some of the issuers’ API as well. So there is a lot of flexibility in terms of how we can deliver the solution. On an issuer by issuer basis we can optimize the whole solution set for the issuers.



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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