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Visa said the test, which it announced Monday, is part of an effort to expand its mobile capabilities. Analysts said such alerts could make consumers more inclined to use their phones for financial services.
"We're looking to expand our payment and value-added services into the mobile channel, so alerts and notifications are really one piece of that puzzle," Pamela Zuercher, Visa's global head of product innovation, said in an interview.
The San Francisco payments company said last month that it was evaluating the use of mobile phones to send and receive remittances. It is also testing phones that could be used to initiate contactless payments at the point of sale, and Ms. Zuercher said it is testing other mobile payments capabilities worldwide.
The service lets consumers set up as many as four alert triggers for transactions made with their Visa cards: cash withdrawals made at automated teller machines, purchases that exceed a set limit, purchases made abroad, and online purchases. The alert thresholds can be set at the issuers' online banking sites or with a mobile phone, and if a transaction meets any of the conditions the cardholder will receive an alert by e-mail or text message.
The alerts are generated by the same system Visa uses to authorize purchases, and are sent in what the company calls "near-real time." Ms. Zuercher said she has tested the system herself, and that she generally received text-message alerts before leaving stores where she had made purchases.
Because it uses the existing authorization process, the alert system required relatively little investment, she said. The main cost "was enabling the mobile channel," to send messages from Visa's system to consumers' phones.
The system is not configured to block certain types of transactions, though Visa said it would continue to evaluate enhancements to the services.
Many banks already offer similar e-mail and text-message alert services that can be set up through their online banking sites to notify customers about specific types of transactions on their bank accounts.
Visa is not attempting to compete with its issuers' alert systems, Ms. Zuercher said. "There are complementary programs that can be put in place" from issuers, she said, but the Visa service adds "the ability to help our banks deliver that near-real-time capability."
Visa employees began testing the alerts last year. The company is now expanding the test to 2,000 employees of eight issuers in the United States and Canada: PNC Financial Services Group Inc., SunTrust Banks Inc., U.S. Bancorp, Wachovia Corp., Wells Fargo & Co., Royal Bank of Canada, Toronto-Dominion Bank, and Vancouver City Savings Credit Union. The service may be made available to more Visa issuers in 2009, Ms. Zuercher said.
James Van Dyke, the president and founder of Javelin Strategy and Research, said 44% of issuers offer at least one type of alert. Visa's system, with its near-real-time feature, is "an important leap-ahead capability," he said.
Bruce Cundiff, Javelin's director of payments research and consulting, said the alert service "might be that driver that brings a lot of consumers" to mobile banking products. It "might drive consumers to bank-generated, in-house mobile banking solutions," and "could be a catalyst for more consumers to engage via the mobile channel with their financial institution," he said.
"The pervasiveness of this type of activity, delivering this type of capability to cardholders, has to be done at the network level," Mr. Cundiff said. Because Visa is "a network instead of an individual financial institution ... that may lead them to be able to provide a better service to the issuer community as a whole."
