Thursday, March 25, 2010

Fair is Fair....Hats off to Visa...Genuine progress in fraud prevention!

Wells Fargo announced a few days ago that they were taking advantage of a new Visa feature. Of course, I had to immediately enroll. You then receive text message alerts when certain types and size of transactions occur. The idea is that if it isn't you, you can immediately respond and become part of the fraud prevention paradigm. I was somewhat skeptical, as usual, but as it turned out hours later I was picking up my wife's BMW from the shop (ouch $1200!!!) and while I was still standing at the check-out desk, my phone got a text reporting the transaction to me. It was very descriptive, telling me that my "Wells Fargo Card ending in xx was used at xxx Motors in xxx town for $xxxx.xx ....


This is real progress.


I had previously enrolled in their alerting offer but due to the number of different acquirers and issuers and the batch nature of credit card processing, these often did not arrive until days later.

Since, Visa's switch is involved in the authorization of all Visa transactions, these alerts can go out literally in real time.



Of course someone will try and call this a mobile payment! (see my article in Venture Beat!)
http://venturebeat.com/2010/03/10/what-will-it-take-to-make-mobile-payments-mainstream-in-the-us/

6 comments:

Роман said...

This feature (SMS on every transaction) is implemented by every (or almost every) bank in Russia for a couple of years by now. I don't know if US banks do this. So it seems more like catching runaway train, and less like progress :-)

Roman Zhikharev, 2pay

SKlebe said...

A few banks have been offering the old method which often meant multiple day delays before the SMS would be sent. This is new and much better since it is real time. However, now having this turned on for a few weeks, I think it is pretty annoying and can be confusing so I am still not sure that it is sound. It is not differentiating enough yet. In addition to spontaneous transactions which are the riskier ones, it also sends me a text when AT&T bills my card for my normal monthly bill.

Роман said...

Sending a message with "multiple day delays" to prevent fraud doesn't make any sense to me :-)
Some time ago criminals managed to copy my card and pin and only those text messages prevented them from cashing in my monthly salary.

SKlebe said...

That is great but here in the US we have consumer protection laws that would have fully recovered that money for the consumer. As a result, consumers are very reluctant to be inconvenienced in any way and add'l security is often an inconvenience.

James Lin said...

I'm a merchant and often detect fraudulent orders with valid credit cards. It would be great if there is an easy way to report the stolen card numbers to the card brands so the card holders can be notified immediately.

SKlebe said...

uumh, interesting. I would suggest that you direct the consumer to contact their card issuer. The card brands, nor the issuer are going to act on a merchant's suspicions without engaging the cardholder anyway.