Visa wants to put an end to those annoying calls you sometimes get from your bank when buying things far from home.
The credit card company will roll out a new feature in April that allows cardholders to automatically let Visa know where they are using the location services built into nearly every smartphone. The optional service will match up the coordinates of the smartphone with the location of the sale to more accurately predict instances of credit card fraud.
To set up the location tracker, Visa has made deals with card-issuing banks to add the option to their mobile banking apps. Over time, the location service will plot out a home range with a radius of about 50 miles. If the customer leaves that territory, the tracker will send that information to Visa, and the company will be less likely to flag that card for fraud when purchases are made.
According to the company, retail purchases often slow down when customers travel because of the burdensome process of verifying location by phone to a financial institution. The process also costs these institutions millions of dollars in customer service costs of noting pre-travel requests and rooting through mistakenly declined purchases.
While the idea of a credit card company tracking your every move may sound disconcerting, some privacy experts welcomed the idea for its potential to cut down on credit card fraud and protect personal financial information. The company also claims that the feature can be switched off at any time and that data will never be used for marketing purposes.
Justin Bookman, director of consumer privacy at the Center for Democracy & Technology, told the Associated Press that banks already effectively have access to customer location data through purchase records.
With cyberattacks on consumer information becoming increasingly common, the monetary loss every year by credit card fraud is on the rise. According to the latest data available from the Federal Reserve, $1.57 billion was lost in debit card fraud in 2013 and $4 billion in credit card fraud in 2012. Read more…