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Visa Wants To Track Smartphones To Prevent Fraud

Tuesday, June 30th, 2015

Payment giant Visa is all set to introduce a new security feature that would allow the company to track the location of its users via their Smartphones. The payment processor company is introducing the feature to combat debit and credit card fraud which costs banks and financial institutions billions of dollars every year. The feature would also be a boon for tourists and business travelers since their overseas transactions won’t get declined automatically just because of their location.

At present, you need to inform your bank whenever you are travelling overseas or to a different city. That’s because, credit card transactions occurring at a place other than your home city or county are declined automatically. While this may seem like a restriction, it is in fact a great security feature that protects you from credit card frauds.

Visa’s new location tracking feature would be embedded into banking apps. Customers would need to opt into the program to allow Visa to track their locations. The software will identify user’s current location and mark a 50 mile radius around it as the safe zone. All transactions occurring in that area would be marked as safe and get approved (of course, other restrictions would continue to play their part).

When the person travels outside his home city or to a different country altogether, his new location is conveyed to Visa as soon as his Smartphone connects to a phone or Wi-Fi network. So the next time the person uses his card, Visa is less likely to decline it just because his current location happens to be hundreds or thousands miles away from his home city.

Visa’s new security feature is completely optional and users can opt out of it at any time. Also, the company won’t be collecting any other personal information other than the current location or zipcode. Even this information would be discarded after the transaction has been verified and would never be used for marketing purposes. Since the feature would only come into play only when you are out of your home city, it seems like a good way to remain safe from fraudulent transactions.

Visa also hopes to combat fraudulent transactions occurring due to the use of counterfeit credit cards with this feature. As of now, it is extremely simple for criminals to counterfeit a card and use it to buy something online or fund their shopping sprees. But once the location tracking feature comes into play, transactions occurring at locations that are far away from the user’s current location would get automatically flagged or declined.

While the new security feature would improve the security available to the end users dramatically, it won’t address every security issue. For instance, if someone happens to lose both his mobile device and credit card at the same time, he could still become a victim of credit card fraud. The new feature won’t cover online transactions either which account for a big portion of frauds occurring these days. However, it is a step in the right direction that will offer an additional security cover to credit card users.

June 30, 2015

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