Visa is launching a smartphone tracking service to reduce unnecessary purchase declines triggered by travelling customers.
Consumers can now opt into the service, which geo-locates their smartphone using a location-tracking module embedded in their usual banking app. Visa is partnering with geospatial analytics company Finsphere for the service, which will ping the app for the card user’s coordinates when they make a payment on their Visa card, and report its finding to Visa in real time.
The card payment will not be automatically declined if the phone and card are not being used in the same place. Visa will use it as an additional input for its fraud detection algorithm. If Finsphere does report a location match, however, it will be less likely that the transaction will be declined.
The card issuer estimates it can reduce mistakenly declined transactions, which are often flagged because the customer is making a payment outside their home country, by 30 per cent.
Visa says that it will only be collecting the data needed to establish the consumer’s location, which will normally just be a postcode, and will discard the data afterwards.
“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,” said Mark Nelsen, senior vice president of risk products and business intelligence at Visa Inc in a release.
The service will be available to U.S. card-issuing financial institutions in April 2015.
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