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Visa catches up to competitors with transaction control mobile alerts

Visa is rolling out a new service that enables cardholders to set spending controls, temporarily suspend accounts and receive transaction alerts on mobile in a bid to prevent fraudulent transactions, a move that brings the financial marketer up to speed with its competitors.

Visa is now allowing customers to control how, when and where their accounts may be used, promoting real-time visibility regardless of location. Visa Consumer Transaction Controls brings additional security overviews to mobile so that consumers can receive texts, app alerts or emails when any account activity takes place.

“The objective is to identify fraud as soon as possible to stop future transactions,” said Mark Nelsen, senior vice president of risk products and business intelligence at Visa Inc., Foster City, CA. “We believe that [mobile] is the vehicle that can be used to quickly identify fraud.”

“We had this capability a couple years ago, and it wasn’t delivered to mobile. We found it was hard for consumers to really take advantage of the capability as quickly as they could [with mobile].”

Consumers in control
Visa aims to give its customers additional flexibility in protecting themselves from fraud and security threats by introducing the new platform, which is now available to account holders and Visa card-issuing financial institutions.

As digital commerce continues to grow at a frenetic pace, consumers must become accustomed to taking charge of their own finances.

Customers may leverage Visa Consumer Transaction Controls to input specific spending controls, suspend their accounts using an on/off feature and receive transaction alerts on mobile. The transaction controls can be customized to meet each individual’s needs.

For example, they may be applied to overall card spending, date ranges or types of transactions. After a purchase is verified, Visa will send the customer an informational alert via mobile app, text or email.

Visa Consumer Transaction Controls are ideal for families

“Visa’s pitch with Consumer Transaction Controls is simple yet effective; empower the cardholder to reduce fraud losses,” said Jordan McKee, senior analyst of mobile payments at 451 Research, Boston. “This is a convincing proposal because it hands control over to the party that deserves it most: the consumer.

“More so, it does so via its mobile banking applications, a channel 451 Research finds over half of smartphone owners are already using.”

Visa claims that while the amount of fraud in its system is low, individuals who opt in for transaction alerts encounter 40 percent less fraudulent activities than cardholders who do not.

Additionally, users of Visa Consumer Transaction Controls can manage multiple cards, which may come in handy for customers whose children have companion cards that need to be monitored. Consequently, if the child makes a purchase with the Visa card, the parent will receive an alert letting him or her know about the transaction.

Consumers can also de-authorize cards with the tap of a finger, and request or block alerts for specified activities, such as purchases made online or internationally.

“Integrating Consumer Transaction Controls offers issuers a new, common sense approach to building out their multi-layer fraud defenses,” Mr. McKee said. “By increasing the cardholders’ visibility and flexibility in managing their accounts, this technology can also give way to incremental transactions and card spend.”

Cottoning onto competition
Visa’s move to enter the consumer transaction control space was a smart one, especially since many other financial marketers have already forayed into this strategy and experienced positive results.

Wells Fargo & Co. is reaping the benefits from its mobile-first outlook by revealing that it sent more than a half-billion SMS and email alerts to consumers’ smartphones last year, offering information on topics ranging from ATM withdrawals to bank account activity (see story).

Discover also took mobile management for credit cards to a new level in 2015 with Freeze It, a tool enabling cardholders to instantly stop purchases on their account from their smartphone when a card is misplaced and just as easily reinstate purchasing once it is found (see story).

“Visa is not a first mover with this technology, as evidenced by Discover’s implementation of Freeze It and Fiserv’s CardValet, which already has over 200 banks signed up,” Mr. McKee said. “Visa will, however, be a key enabler of mobile card control thanks to its scale and reach.”