Visa to Prevent Fraud by Using Mobile Phone Location
Visa Europe will start using the location of customers’ mobile phone to prevent credit card fraud. Partnering with ValidSoft, a company specializing in fraud prevention, Visa will be able to determine the proximity of a customer’s mobile phone location to where the credit card is being used. If the credit card and mobile phone are found to be in different locations, the system may assume that someone else is using your credit card and it will send an alert signaling a potentially fraudulent transaction.
Visa’s new fraud-detection system may start a trend for other credit card companies to start doing the same. Gartner, a research company, predicts that by 2015, more than 15% of card transactions will be validated with the mobile phone location information. But already, some issues arise. Will this fraud-detection service pose problems for customers who leave their phone at home and shop with their credit card? And if someone’s card and phone are both stolen, then the system will fail to detect a fraud. Perhaps the “other variables” used in Visa and ValidSoft’s system will help sort out these kinks, but it may be too soon to foresee the long-term effects of this new fraud-prevention system.
Photo Credit: Asim Bijarani