Do You Swipe When You Travel? Visa Makes It Easier to Avoid Declined Transactions

Visa announced in a press release  a new mobile service to make those transactions while traveling easier. Starting in April, travelers will be able to have their location tracked via mobile device using the new Mobile Location Confirmation. The locator will be able to track the consumer’s travel in order to ascertain that the purchase is a valid purchase.

Mark Nelsen from Visa said in a statement,

Wherever you are in the world, we want Visa transactions to be the most secure, convenient and seamless payment choice. By matching the location of the cardholder through a cell phone or other mobile device, to the location of the purchase, Visa’s new service will enable banks to feel more confident about authorizing a transaction that might otherwise have been declined due to suspicion of fraud.

This does not mean that any purchase will be declined if you don’t have your cell phone on you. Understandably, it’s possible that someone left their phone in a hotel room or what not. When the mobile device isn’t present, the system will revert back to the ordinary methods used in detecting unauthorized transactions. (Source: gigaom.com)

Visa expects the system to reduce declined transactions by as much as 30% for users of the new program. This will translate into enhanced usability for consumers and savings of hundreds of millions for financial institutions by reducing the necessity of customer service representatives dealing with declined transactions of travelers.

Currently, travelers have the option of informing their card issuers of their travel plans, so as to avoid declined transactions. Most credit card issuers have a special option in the online account to inform them of your travel plans. Using the new system, this wouldn’t be necessary for Visa cards.

This service is optional and enrollment is done through the financial institutions mobile app. When downloading the app, users agree to use their mobile location information for the purpose of verifying transactions. Consumers can opt out at any time after the initial enrollment.

The service is likely to draw the ire of privacy advocates, worried about what information Visa may be gathering. Visa denies this, insisting that any data is discarded after verifying the validity of the purchase. They also note that usually it’s only the zip code that is tracked, not the precise location. For those who are comfortable with the privacy aspect, it could be a neat way of reducing those declined purchases.

HT: pymnts.com

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