Here's a form of two-factor authentication you probably haven't heard of yet: a fraud-scoring engine that rates transaction fraud likelihood after comparing the physical location of the consumer's mobile phone and the location of the payment terminal where their card is being used.
Going on the theory that no one leaves home without their mobile phone, the further apart the accessories are at the time of the transaction, the higher the probability of fraud. This information is then combined with historical data about customer usage to create a fraud score between 1 and 1,000. Transactions above an institution's threshold are declined.
Tennessee-based Secure Identity Systems has imported the technology, dubbed mConfirm, from an Israeli company, which has already successfully deployed it at VISA Cal, an Israel-based issuer. The system works with some of the most common cell phones and wireless networks, including Apple iPhone, RIM’s Blackberry, LG, AT&T, Nokia, Motorola and Samsung.
This cool, new fraud detection tool is one that the company claims virtually eliminates the possibility of fraudulent transactions occurring on a covered account. Whether American consumers will go for the privacy that's implicitly lost when you agree to let your credit card carrier track your movements via your cell phone is another story.
