Location Discrepancy Between Visa Cardholder and Mobile Phone May Now Spell Fraud
With the new fraud detecting service of Visa Europe (NYSE:V), which closed a deal with ValidSoft, a subsidiary of Netherlands-based telecom operator ElephantTalk Telecommunications, Inc. (OTC:ETAK), financial institutions thought this move might make their customers think they are tracking them down.
Visa’s plan of using a cardholder’s mobile phone and credit/debit card locations to trace potential fraud in transactions has put privacy issue in front of debates.
ValidSoft, which the European-based privacy group EuroPrise has certified to be “privacy respectful” according to Gartner (NYSE:IT) analyst Avivah Litan, can access directly mobile networks, tables, and services worldwide, including a user’s location without needing any input at all.
In this service, detecting fraud in Visa transactions may utilize information about the user’s mobile phone location, which can be traced through cellular based stations, and the whereabouts of an ATM card transaction.
Litan wrote in her security blog that various financial institutions have expressed interest in the new fraud detection service but that they are still worried about how it may impact privacy matters of the clients.
Litan and colleague William Clark predicted July this year that at least 15 percent of transactions made with Visa card will need “mobile location and profile information” confirmation by 2015, seeing the adoption by most banks and card companies of this initiative soon.
She emphasized that mobile phones have become an inseparable part of a man’s life, who “rarely leaves home without it,” reinforcing Visa’s move to utilize the gadget to ward off possible frauds against humans.