Visa uses software to reduce declined payments for travellers

Visa introduces service to prevent card transactions being declined when user is overseas by checking their mobile phone is in the same place in real time

Visa has introduced a service that will prevent card transactions being declined when the account holder is overseas by confirming that the customer’s mobile phone is in the same location in under a millisecond.

The service will stop transactions being declined when a Visa card is used outside the account holder's home country.

The Mobile Location Confirmation provides an additional level of security to complement Visa’s predictive fraud analysis, and uses mobile geo-location data in real time. The service will initially be available to US customers, from April 2015.

“Wherever you are in the world, we want Visa transactions to be the most secure, convenient and seamless payment choice,” said Mark Nelsen, senior vice-president of risk products and business intelligence at Visa. 

“By matching the location of the cardholder, through a cell phone or other mobile device, to the location of the purchase, Visa’s new service will enable banks to feel more confident about authorising a transaction that might otherwise have been declined due to suspicion of fraud,” he said.

Visa said unnecessary transaction declines can mean lost sales for retailers, increased costs for financial institutions and major inconvenience for the cardholder. 

The company said financial institutions spend hundreds of millions of pounds annually to manage customer service calls related to pre-travel requests and to research declined transactions. It expects to reduce the number of declined transactions by as much as 30% with the introduction of the Mobile Location Confirmation service.

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“Through Visa’s Mobile Location Confirmation service, we’re enabling more precise fraud monitoring, which creates a better payment experience for travellers, assists merchants and reduces unnecessary operational costs for financial institutions,” said Nelsen.

The service will be integrated into the mobile banking applications of financial services firms. Mobile data and geo-spatial analysis company Finsphere Corporation provides Visa with an analysis of the account holder’s device location data, which is then matched with the transaction location in under a millisecond.

In January, Lloyds Bank launched a notification service which allows online and mobile banking customers to inform the bank when they will be travelling abroad.

To use the service, customers simply log into online or mobile banking and add their travel dates and destination on their profile page.

The updates are instantaneous, allowing users to submit travel information at any time of day. Lloyds expects a 50% increase in customer travel notifications over the next year.

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