New Visa Feature Uses Smartphone Location Tracker To Prevent Fraud By Knowing Where You Are At All Times

Forgetting to tell your bank that you’ll be traveling far outside of your normal spending zone can often lead to frustrations like having transactions rejected out of concern that your card is being used fraudulently. In an attempt to make the lives of frequent travelers easier – and prevent fraud – Visa plans to launch a new service this spring that automatically informs banks where you are.

The Associated Press reports that Visa Mobile Location Confirmation, which is set to launch in April, uses the location function on consumers’ smartphones to notify banks that customers and their cards are in the same place.

Officials with Visa say the new feature – a software update for bank’s smartphone apps – aims to prevent credit card fraud by comparing merchant’s location with consumers’ most recent cellphone location to prove transactions aren’t fraudulent.

Visa Mobile Location Confirmation works by creating a territory of a roughly 50-mile radius around a consumers’ home. Transactions made at store’s within that radius will be considered low risk for fraud.

If a person travels outside of their designated territory, the feature will notify Visa of the location change using the phone’s cellular data or a wireless connection.

Then when the consumer uses their Visa card to make a purchase, the company will already know he or she is in the area, decreasing the chances that the bank will flag the card for fraud.

Officials with Visa say the service is optional for consumers and they must specifically opt-in to have their locations followed. Additionally, if at anytime consumers choose to discontinue use of the service they can turn off the location tracking option within their bank’s mobile app.

While Visa executive Mark Nelson tells the AP that the new service will prevent “a good portion” of fraud perpetrated by counterfeit cards, it won’t prevent all ne’er-do-wells. The app would be mostly useless if a consumers’ phone and wallet are stolen. Additionally, if a consumer is traveling outside the U.S. and doesn’t have supported cellular service or immediate access to Wi-Fi they will likely find themselves on the receiving end of a red flag or rejected transaction.

Still, privacy experts tell the AP that the feature, if used correctly, could protect consumers and cut down on the billions of dollars lost each year to credit card fraud.

Recently, credit card companies have stepped up efforts to curb fraudulent use of credit cards and better protect consumers from prevalent data breaches. Earlier this month, both Visa and MasterCard announced plans to expand certain security features for online shopping.

Visa wants to track your smartphone to combat fraud [The Associated Press]

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