Visa is rolling out a pilot mobile-based transaction alert system that will provide cardholders at eight North American banks a potential early warning—via an SMS text message—of a potentially fraudulent card transaction.
Visa announced that 2,000 cardholders will be part of the test run, and will include those from PNC Bank, SunTrust Bank, U.S. Bank, Wachovia, and Wells Fargo in the U.S.; as well as Royal Bank of Canada, TD Bank Financial Group and Vancity up north.
Consumers will get real-time alerts within seconds on any transactions that trip a risk threshold established by the consumer. The transaction could be an ATM cash withdrawal, an overseas or Internet transaction, or an amount exceeding the amount set by the cardholder.
Visa has been testing mobile notifications since last year. “This is part of our strategy for broader mobile offerings that we plan to add,” including payments, money transfers, value added services such as alerts and marketing offers, says Pam Zuercher, head of global product innovation for Visa.
James Van Dyke, president of Javelin Strategy & Research, says that the service is a welcome step to enact more consumer control over security. “With one out of two cases of existing account fraud currently discovered by the account holder—and not the provider—it simply cannot be denied that individuals play a valuable role in their own security,” he said via e-mail.
“It’s easy to see how mobile devices can significantly speed up fraud detection, which in turn will lead to lower fraud rates,” Van Dyke says. “More importantly though, Javelin believes that the marketing value of alerts and other accountholder controls will actually provide greater financial value to the financial industry than the security value, as individuals choose and stay with card brands, issuers at a higher rate when advanced alerting capabilities are available.”