Finsphere and Visa Just Made Credit Cards Smarter

One of the biggest credit card challenges for users is seeing charges get declined because of potential fraud. In families and many companies, a central card can be shared by many people and when the credit card company flags a potentially fraudulent transaction and alerts the cardholder, it is possible that the card gets immediately cancelled out of fear. This can happen, even if transactions aren’t really fraudulent and in turn can cause a cascade of problems related to automated payments and other pending transactions within the family or organization.

In my experience, the banks are getting better at communicating with their customers about the potential for a transaction to be fraudulent but they are far from perfect. Some card companies like Chase allow you use an app to confirm a questionable charge but the American Express app has been far less useful for me.

In a perfect world, a credit card company should know when you are in Europe because the card was used to book a flight there and subsequently not question all European purchases when customers land.

Mobile Location Confirmation Video from Visa Vimeo on Vimeo.

In an effort to solve such problems and others, Visa, is introducing a new mobile service in April designed to reduce unnecessary purchase declines often triggered when consumers travel outside of their home area. Visa Mobile Location Confirmation uses mobile geo-location information to more reliably predict whether it is the account holder or an unauthorized user making a payment with a Visa account.

This information is taken together with current Visa’s predictive fraud analytics to provide a more accurate rating of transactions. Finsphere Corporation, a leader in the use of mobile data and geo-spatial analyses, provides Visa an analysis of the account holder’s device location data, which is then matched with the transaction location in less than a millisecond, right at the point of sale. 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.

You may recall when TMCnet reported on the company’s funding of over $11 million some years back. It seems they put the money to good use.

Mobile Location Confirmation Animation from Visa Vimeo on Vimeo.

Here are some of the benefits of this new program:

  • Visa Travel Authorization Tag allows issuers to identify when a cardholder is traveling based on airline, rail, cruise or hotel purchases made with their Visa account. By using this information as an indication of cardholder travel plans, Visa is able to provide issuing financial institutions important insights that could protect the cardholder from fraud even if he/she did not call to provide travel information before a trip.
  • Travel Notification Service allows cardholders to contact their issuing financial institution online rather than by phone, making it more convenient to notify their financial institutions with travel information. Travel information is then automatically integrated into Visa’s risk scoring engine to better identify potential fraud and approve legitimate purchases.

Credit card fraud is a multibillion dollar problem and much of it can be controlled by utilizing the smartphone which is generally in possession of the cardholder at the time of the transaction. This is a great step forward in making credit cards smarter – hopefully this news will be just one step in allowing completely secure global financial transactions to take place.

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