Visa has partnered with Finsphere, a geospatial analytics company, to provide location information of mobile devices at the time of a card transaction. The card network is now working with card issuers to embed the mobile geolocation features in their mobile banking apps and estimates that 30 percent of wrongly declined transactions can be stopped.
Finsphere jointly launched a service called PinPoint in 2010 along with Location Labs. It was a similar mobile geolocating service to what Visa is looking to implement, although notifications went directly to the cardholder rather than the card issuers. Partnering with Finshpere, Visa plans to offer location tracking to their issuing bank partners in hopes of reducing unnecessary declines when a consumer travels.
Mobile geolocation has been around for several years but has met resistance as many consumers do not want to be tracked and wireless carriers are apprehensive to provide such data. The new service planned by Visa and Finsphere will require consumers to opt-in, but may reach more cardholders as Visa plans to have financial institutions add the tracking feature to their existing mobile apps.
When a consumer who has opted-in to the services makes a transaction Finsphere will ping the mobile device and determine its approximate location through the feature added to the card issuing banks’ mobile apps, which must be installed on the device. The location data will be provided to Visa, who takes this additional risk signal into account along with many other risk screening measures.
Finsphere CEO Mike Buhrmann seeks to quell consumer privacy concerns highlighting the fact that the location data is used for the transaction and then discarded. Visa’s approach of embedding the location technology within a financial institutions app may also boost consumer adoption of such services considering that many consumers already have such apps and many have a high level of trust for their banking institutions.
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