Called Visa Mobile Location Confirmation, the service uses the location features of smartphones and other mobile devices to pinpoint where consumers are at the time of credit or debit card transactions.
When a cardholder’s mobile device is in the same location as the payment transaction, the issuing financial institution “can more confidently approve the transaction,” Visa said.
The software – which Visa will make available to banks and credit card issuers for use in their mobile apps – also uses a cardholder’s location to identify when they are traveling outside of their typical “home territory,” according to the Associated Press.
The company is pitching the service as a convenience for travelers, because you won’t have to notify your bank or credit card company by phone when you’re traveling, and the likelihood of your purchases being declined by fraud-prevention measures will be reduced by about 30%.
By reducing unnecessary purchase declines and cutting out customer service calls for pre-travel requests, Visa says it can save financial institutions hundreds of millions of dollars and devote more resources to finding actual credit card fraud.
Visa says the service will be available as an “opt in” feature within mobile banking apps and can be disabled at any time – a move that has been hailed by some privacy advocates.
In fact, Visa sought feedback about the location-tracking service from the Future of Privacy Forum, a Washington, DC think tank devoted to responsible data practices, the Associated Press reported.
At Naked Security, we frequently harp on app makers who don’t give consumers the choice upfront to use their location services, because opting in to these services means people are much more likely to understand what data they are consenting to give up and how that data will be used.
It’s quite likely that many people would be happy to trade some of their privacy for more convenience and security in their banking, so long as they have a choice in the matter.
Other card issuers are experimenting with fraud prevention measures that could be considered more invasive.
MasterCard, for example, is piloting a program this year that uses unique biometrics like facial and voice recognition and fingerprint matching to authenticate transactions.
Barclays bank has announced plans to introduce biometric authentication based on vein patterns in fingers.
And fingerprint readers available in the new generation of smartphones, combined with contactless payment systems like Apple Pay, could help us do away with insecure plastic cards altogether.
The future of payment technologies will likely force us to become more comfortable with using our bodies, rather than just our names and a number or password, to identify us.
Image of tourist using navigation app on mobile phone courtesy of Kaspars Grinvald / Shutterstock.com.