Can fraud be tackle with a combination of mobile phones and location of credit card transactions?
Some company (e.g. Fico Proximity Location service) have developed a fraud protection technology app which checks a person's location, via their mobile phone, against the location of the point of sale (POS) terminal or Automated teller machine (ATM, a cash dispenser or cash machine) where their card is being used.
This Proximity Location service could slash the number of false positives on overseas transactions by up to 70% - 80%. There is no statistically data to support this as of now.
A number of Banks in the United Kingdoms (UK) have developed these types of technology and are now planning to deploy them and give their customers the option to register their mobile phones for the service.
As added advantage, Proximity correlation adds a powerful new technology apps tool that can help credit card issuing banks eliminate a great source of frustration for their customers who travel abroad.
With locations of mobile phones and card transactions service, cardholders can use their cards in other countries with significantly lower risk getting rejected or declined.
You may ask... What about those people who use different mobile phones or dual SIM phones?
Or as you know... you're not supposed to but some people do it - lending their credit card to your partner to use? For the record, YOU Should NOT be lending your card to someone else and giving them your PIN to use even your partner.
How does the proximity work? Does it work using G3/ G4/ GPS, if it does how about the incurred data costs of roaming data which is expensive, and will the bank pay for it?
What happen if your mobile phone battery dies - can you still use your card or if both your cell phone and card is stolen what is the protection? Would the Balance notifications features come through if that is already enabled on the apps?
It is easy to say all these. However, the direct relationship between a mobile phone and a credit card is flimsy, so how much added value does this bring in terms of fraud security?
The answers to all this questions could be used to determine if this is a valid transaction or not. It is just another layer in the security onion.
Anyway, for now, it is highly unlikely that any bank would refuse transactions based solely on the location of the phone.
We all agreed that the link between the mobile phone and the card transaction is strong case. It is possible to tell where the user is whether the customer is at an ATM or carrying out a PoS transaction in a local shop.
Further more, you can even narrow this down for internet transactions as the system can know where you are and where the transaction is originating from.
Especially as the real issue are often card not present transactions or cloned credit cards in the first place.
On the other hands, for example, why would a bank need the Fico system?
Banks mobile phone apps could just interrogate the phone and compare its location with the transaction location. We all agree that itís relatively easy to stop fraud are simply decline more transactions.
As mobile payments become an increasingly common form of payment, the convergence between the payment method and the device, with the right security checks in place, provides the ultimate framework for the likes of Fico Proximity Correlation.