To combat fraud, Visa wants to track your smartphone
FEBRUARY 16, 2015 LAST UPDATED: MONDAY, FEBRUARY 16, 2015, 1:21 AM
BY KEN SWEET
THE ASSOCIATED PRESS |
WIRE SERVICE
* Tracking could cut fraud, experts say
NEW YORK — Those days of calling your bank to let it know that, yes, you really are in Thailand and, yes, you really did use your credit card to buy $200 in sarongs may be coming to an end.
The payment processing company Visa is rolling out a feature this spring that will allow its cardholders to inform their banks where they are automatically — using the location function found in nearly every smartphone.
Having your bank and Visa know where you are at all times may sound a little like “Big Brother.” But privacy experts are actually applauding the feature, saying that, if used correctly, it could protect cardholders and cut down on credit card fraud.
Credit and debit card fraud costs consumers and banks billions of dollars each year, and that figure has been growing as data breaches have become more common. The banking industry had $1.57 billion in debit card fraud in 2013 and $4 billion in credit card fraud in 2012, the latest years for which data are available, according to the Federal Reserve.
Facing these high costs, banks and the payment processors have been stepping up their efforts to cut down on fraud, and Visa’s announcement is just one small piece of this drive. JPMorgan Chase’s CEO Jamie Dimon has said repeatedly that his bank spends $250 million overall on cybersecurity every year, and plans to double that spending.
Here’s how it works: Starting in April, banks will update their smartphone apps to include Visa’s new location-tracking software. If the consumer opts in, the Visa software will, over a period of time, establish a customer’s home territory of roughly a 50-mile radius. If the person uses his or her Visa card at stores in that area, those transactions will be considered low risk for fraud.
