Commentary
Visa Will Track Devices To Combat Credit Card Fraud
- by Erik Sass , Staff Writer @eriksass1, February 13, 2015
In an interesting twist on the whole mobile payments trend, Visa announced it will begin tracking mobile devices to combat credit-card fraud -- even when the credit card isn’t linked to the mobile device with a payment app.
The credit card giant will use tracking data from customers’ mobile devices to confirm that they are making legitimate credit card transactions, by comparing the location information from their devices with the location of the business where the transactions take place.
Customers can still use their cards if they don’t have their mobile devices with them -- after all, there are still a few of us who occasionally wander about without our digital ball and chain. Instead, Visa will simply trigger another round of security checks to make sure the transaction isn’t fraudulent.
The location information is gathered via banking apps from Visa’s card-issuing bank partners, who immediately discard the information after the transaction has been verified. Customers have to opt in to the service.
Of course there’s always the possibility that a thief nabbed your phone along with your wallet, but Visa estimates that the mobile location screening system should still cut fraudulent transactions by 30%.
This is just one of a number of new measures to increase the security of credit-card transactions announced by Visa this week. It’s also expanding its use of a new technology, the Visa Token Service, which allows it to do away with the traditional 16-digit account numbers for purchases made with mobile payment apps. The VTS replaces sensitive account information with a unique set of numbers that can authorize payment without revealing account details, further limiting opportunities for fraudsters to gain access to accounts. VTS debuted with Apple Pay last year, and the company expects the service to be adopted by a range of major device manufacturers and technology companies in 2015.
Erik Sass is editor of Publishers Daily. You can reach Erik at eriksass@gmail.com.
It's great to see that steps such as this are being taken to protect the consumer, the merchant and combat fraud. We have been providing mobile data solutions to reduce fraud and verify who the consumer is that is on the other end of the cell phone by processing mobile numbers and transactions via an API in real-time for many years.
Looking at the carrier information (contracted vs. prepaid or non-contracted) is yet another "trigger" as well as mapping back the source of a consumer record can help to identify potential fraudulent activity. For example, if a consumer's cell phone record is also on a subprime database or pay day loan application, this consumer record could be looked at more closely and monitored for possible fraud.
Leland: Is that a warning to never supply your cell phone number on applications of any kind? ;)
It is not a warning at all! As you know, most online application forms have mandatory fields such as a phone field to be provided. Analyzing and monitoring mobile data is an "art and science." It is not like traditional postal data and takes email sourced data to a higher level!