Mastercard tests credit cards that won't work unless you're nearby
Mastercard and roaming infrastructure company Syniverse have come up with a way to protect credit card transactions abroad with help from a phone’s location.
The two companies are piloting a service that will enable card transactions for users only when they have their mobile device switched on in a specific geolocation abroad. The aim is to reduce fraud and decrease the number of real transactions that are declined.
“Between 50 and 80 percent of transactions that are declined are actually legitimate transactions, but they are declined by financial institutions for security reasons,” said Hany Fam, president of Global Strategic Alliances at MasterCard.
Within under 300 milliseconds a check goes from the payment terminal into Syniverse’s platform, which keeps track of where roaming phones are located, and then information is returned about whether a transaction should be approved or denied, according to Mary Clark, chief marketing officer at Syniverse.
The platform has been developed to do more than secure transactions, including implementing targeted offers, which will be made more relevant by knowing the location of a mobile device, for example, in close proximity to a retail store, according to the two companies.
As soon as a location is used, there are privacy issues that have to be dealt with. Users will have to opt-in to the service in advance.
For this to eventually work, banks and mobile operators would have to be onboard.