SAN FRANCISCO--(BUSINESS WIRE)--Visa Inc., the global leader in payments, is introducing a new mobile service 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.
“Wherever you are in the world, we want Visa transactions to be the most secure, convenient and seamless payment choice,” said Mark Nelsen, senior vice president of risk products and business intelligence, Visa Inc. “By matching the location of the cardholder through a cell phone or other mobile device, to the location of the purchase, Visa’s new service will enable banks to feel more confident about authorizing a transaction that might otherwise have been declined due to suspicion of fraud.”
While infrequent, unnecessary transaction declines can mean lost sales for retailers, additional customer service costs for financial institutions and, ultimately, frustration for the cardholder if unable to make a purchase when traveling. According to Visa estimates, issuing financial institutions spend hundreds of millions of dollars annually to manage customer service calls related to pre-travel requests and to research declined transactions.
By providing financial institutions greater intelligence when approving transactions, Visa expects to reduce such declines by as much as 30 percent, impacting millions of transactions annually and improving the experience for cardholders, merchants and financial institutions.
How it works
Mobile Location Confirmation is an optional service for consumers that will be offered through participating financial institutions’ mobile banking applications. The service uses mobile geo-location data in real time as an additional input into Visa’s predictive fraud analytics. Finsphere Corporation, a leader in the use of mobile data and geo-spatial analysis, 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.
How consumers enroll
To enroll in the service, cardholders download their card-issuing financial institution’s mobile banking app and agree to the use of their mobile location information for fraud prevention purposes. Consumers receive the benefit of the service when traveling by ensuring their phone is periodically connected to a mobile or Wi-fi network, and can deactivate the service at any time.
Available to U.S. card-issuing financial institutions in April 2015, Mobile Location Confirmation is another innovation from Visa designed to provide issuing financial institutions with more information to help protect against fraud while facilitating a better payment experience for consumers.
“Through Visa’s Mobile Location Confirmation service, we’re enabling more precise fraud monitoring, which creates a better payment experience for travelers, assists merchants and reduces unnecessary operational costs for financial institutions,” added Nelsen.
To help increase approval rates for legitimate transactions and reduce consumer frustration while traveling, Visa began offering other travel services last year:
- 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.
About Visa Inc.
Visa Inc. (NYSE:V) is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world's most advanced processing networks — VisaNet — that is capable of handling more than 56,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products. For more information, visit usa.visa.com/about-visa, visacorporate.tumblr.com and @VisaNews.
1 Estimates will vary based on issuer adoption of the service, cardholder adoption and approval decision