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Visa leverages geo-location to enhance travelers’ card payment experiences

Visa is entering the geo-location market with the new Mobile Location Confirmation, a service that gathers location data from customers’ mobile devices to deduce whether or not an unauthorized consumer is making a purchase when an account holder is traveling outside his or her home region.

The service was created to decrease unnecessary purchase declines that may occur when Visa customers travel outside of their usual area of residence, a move that will enable consumers to feel more secure about making payments with their credit cards. It will also benefit retailers that may have lost out on previous transactions, due to users’ cards being declined.

“When consumers make purchases outside their typical buying patterns, transactions are sometimes mistakenly declined,” said Mark Nelsen, senior vice president of Risk Products and Business Intelligence, Visa Inc., San Francisco, CA. “Mobile Location Confirmation helps remove this friction by giving banks new geo-location intelligence so they can more confidently approve valid transactions.

“This means consumers can pay with ease and have no need to notify their bank of upcoming travel plans.”

Preventing transaction declines
The service is predicted to cut down purchase declines by as much as 30 percent, according to Visa. Using geo-targeting technology, Visa will be able to pinpoint a user’s location via their mobile device, therefore allowing financial institutions to authorize a transaction that may have previously been turned down due to concern about fraud.

The brand revealed that 71 percent of cardholders claim they would be willing to adopt cards equipped with geo-location security capabilities, with 46 percent admitting that feature would fuel them to use their credit cards more often.

As a whopping 54 percent of participants in a survey conducted by Finsphere claim they would be less likely to use their cards after having been declined once, offering these types of options is paramount for financial institutions seeking to cater to their customers’ needs.

This service is also set to benefit retailers, as fewer consumers will be declined due to fraud suspicions.

Visa estimates that the adoption of greater financial intelligence such as this technology will impact millions of annual transactions, as well as result in a streamlined experience for merchants, financial services and consumers alike.

Combatting fraud
Visa’s Mobile Location Confirmation is an opt-in service that users can select to participate in via select financial institutions’ mobile applications. The brand has partnered with mobile data firm Finsphere, which will offer Visa analysis of an account holder’s device location data.

It will then match the data with the location of the transaction to determine whether the user is in fact in that region, providing financial institutions with more confidence in approving the purchase.

Consumers seeking to take advantage of the service may visit the mobile app of the financial institution that issues their credit card, and opt-in to the use of mobile location information. If customers change their minds about participating in the service, they can deactivate on-the-go at any time, as it ensures the mobile device is frequently connected to a Wi-Fi or mobile network.

Visa has also dabbled in other travel-related services, such as its Travel Authorization Tag, which enables issuers to discover when a cardholder is en route on a cruise, airplane or rail, ensuring that purchases made in those locations will be approved. Its Travel Notification Service provides consumers with the ability to inform financial institutions of expected travel plans online rather than by phone.

“We want Visa payments to be the most secure, convenient, and seamless payment experience,” Mr. Nelsen said.

Final Take
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York