Three years ago banks rushed to be first to offer mobile text-message alerts notifying customers of suspicious credit and debit card transactions. Now Visa Inc. is trying to up the stakes by emphasizing the superior speed of its mobile transaction-notification service compared with other such services.
Wells Fargo & Co. on March 23 became the first bank to deploy Visa’s platform designed to notify credit card customers within seconds of transactions occurring that meet certain criteria. The issuer sends notifications via text message to customers’ mobile phones, along with a toll-free customer service number customers may call if a transaction is suspicious or fraudulent.
Visa and Wells made the announcement on Tuesday at the International Association for the Wireless Telecommunications Industry’s CTIA Wireless 2010 show in Las Vegas.
Visa last November announced commercial availability of the service.
Visa’s text-alert service, which it has dubbed Rapid Alerts, since 2008. Other banks also testing Visa’s service include PNC Bank, SunTrust Bank and U.S. Bancorp.
Approximately three seconds after the issuer authorizes a certain type of transaction, Wells Fargo will send Visa credit card customers who sign up for the free service a text message notifying them of the transaction. That is significantly faster than most banks’ text-alert services, Visa executives say. Visa declined to provide specific comparisons in the speed of its transaction text-notification service.
Customers may opt to receive alerts for transactions exceeding a specified amount; transactions initiated internationally, online or by telephone; cash withdrawals; declined transactions; and gasoline purchases. Visa says fraudulent transactions frequently surface first when thieves test them at petroleum stations, and notification of such purchases may help reassure cardholders by potentially thwarting fraud.
“What caught our eye about the service is the fact that customers receive notification on their phones of certain types of transactions when they are still standing at the checkout counter,” says Peter Ho, a Wells vice president and product manager. The speed of Visa’s notification service makes it different from other banks’ text-notification services that “generally have a lag time” between the card-swipe and the text message notification, Ho says.
JPMorgan Chase & Co., which has provided customers e-mail and text messages for transactions on checking and credit card accounts for the past few years, offers credit card customers the option to receive text-message notifications for transactions above a specified amount, balance transfers, international transactions, when credit limits are being approached and when payments are due or received. Text messages notifying customers of a transaction usually arrive “within three to 10 minutes” of the card-swipe, customer service representatives say. Chase’s text messages provide two-way communication, enabling customers to reply directly to the text message to indicate whether or not they recognize it as legitimate.
Bank of America Corp. also offers text-message notification for credit card customers, including notifications for transactions above a specified amount; transactions initiated internationally, online or by telephone; and cash withdrawals. BofA’s text-message notifications arrive “within a few minutes” of the card-swipe, a spokesperson says.
Michele Janes, a senior business leader for Visa mobile initiatives, says the immediacy of Visa’s text-notification service sets it apart from other offerings and may help grease the wheels for the eventual arrival of mobile payments. “We can see that as people feel more comfortable receiving transaction information on their mobile phones, they will become more comfortable with eventually conducting transactions on their phones,” Janes says.
However, one analyst contends speeding up transaction text notifications is not likely to woo large numbers of customers. “Early adopters and people who like to use these services are already using them, and whether they get notification within seconds or a few minutes later likely won’t make a huge difference to them,” says Brian Riley, a research director at TowerGroup Inc. “If your card is stolen, whether someone uses it at a gas station or elsewhere doesn’t matter because the customer is not liable anyway for that fraud.”
But Beth Robertson, a payments research director at Javelin Strategy & Research, says consumers expect immediate account-status notifications, although most banks’ account information lags hours or days behind actual transactions. “A lot of banks’ systems are not integrated enough yet to provide real-time account information, but this is a goal many are working toward,” Robertson says. “The ability to move real-time information is useful to consumers, and when people have up-to-date information it will benefit mobile payments and mobile banking as a whole.”
That Visa’s text-notification service enables only one-way communication could weaken its appeal to consumers and issuers, Robertson suggests. “The ultimate goal would be two-way communication through text alerts, so you can respond to the message immediately by text, instead of switching modes to hunt down help,” she says.
Visa is working on adding two-way communication capabilities to its transaction-alert service, Janes says. “As we continue to evolve this service, we hope to extend its value through the two-way interactive element,” she says.