Geolocation: Visa Europe adopts VALid-POS
- Visa plans to use mobile phone geo-location to fight bank card fraud by checking on its customers' presence at the time of the transaction (store or ATM). France is already well equipped with payment terminals and secure ATMs, this tool mostly targets transactions made abroad. If a transaction seems suspicious, the mobile operator can locate its customer and provide his bank with an authentication number.
- If this process shows that the card and cardholder were not at the same place at the same time, Visa can deduce that the card was copied or stolen and, if so, reject the transaction. This system requires cardholder's agreement, he must provide his phone number to enable tracing. The Irish company ValidSoft will provide the geo-location system. A test should be conducted in the months to come with the help of three banking institutions (the name of which was not yet disclosed). Once these tests conducted, the solution will be proposed to Visa Europe customers. It should be reminded that Visa Europe manages 380 million cards.
- In March 2010, ValidSoft, Elephant Talk Communications subsidiary, received the European Privacy Seal for VALid-POS, considered compliant with the European law on private life protection and data security.
See August 2010 Watch
- Bank card fraud represented 342 million Euros in 2009, one third of this amount includes frauds occurring abroad (or, 0.5% of all the transactions performed with French cards outside of French borders). However, risk management tools (scoring) used by the banks sometimes induce inappropriate card blocks (false-positive). ValidSoft and Visa propose an innovating solution which fully exploits the dynamic mobile phone channel. The tests should provide them with a first opinion as to its interests. The limits to Geo-location functioning are in fact very real, for instance, it is not operational when the mobile phone is turned off.
- Geo-location, facial recognition, voice signature solutions, are new tools likely to be set up through the use of mobile phones. But, this authentication method might be considered intrusive by customers who could see this tracing as a means to spy on them and affect their private life.
- According to a study published in November 2010 by Atelier BNP Paribas and Ifop, 65% of the French population disposes of a device equipped with a GPS function, 48% of these devises are autonomous car GPSs, 10% are integrated car GPSs, and 19% use satellite positioning on smartphones.