Visa Wants to Link Up Your Credit Card, Phone Location to Cut Fraud
It also requires that the phone has some means of communicating with the relevant bank or the location process won't work. And of course such communications require use of your data plan while traveling, which can get expensive depending on the carrier involved. Once a customer has downloaded the banking app, they will be required to decide whether they want the app to track their location for fraud control purposes. Customers can choose not to allow it and in that case Visa will fall back to the older method of risk analysis, and more confirmation checks would result. Of course, the financial institution has to enable the location tracking and the back-end processes to communicate the location data to Visa. Only when those steps are accomplished can the Visa location tracking be enabled. Visa said that this location tracking process should be available to all of its banking customers by April 2015. In one sense, customers are giving up a share of their privacy by agreeing to the Visa location tracking, but in reality, they're not really giving up all that much. After all, when you use a credit card during travel, your location becomes known immediately anyway.Visa's Mobile Location Confirmation may also eliminate one other risk for customers by making it clear exactly where the travel is taking place. I recall hearing about a traveler who found that several fraudulent charges took place in India while he was traveling in Europe. The problem turned out to be that his credit card issuer had him listed as simply "traveling" without any indication as to where and even though charges were happening in India and Europe within a few minutes, it didn't trigger an alert. I think that this is one area that can ultimately add to overall security at every step up the line. Now that mobile phones can be locked with biometrics or passcodes, it helps ensure that the right user has the phone. Couple that with a reasonably certain authentication method such as EMV chips and PINs and fraud becomes harder to accomplish. The privacy impact is minimal because the entities involved already know where you are anyway.
Likewise your mobile carrier always knows where you are if only to allow you to make and receive phone calls. What's really happening here is that Visa has developed a way to connect those pieces of information and in the process to make your day-to-day travel activities a bit easier.