If you’ve ever been inconvenienced by having a credit card purchase declined while on the road — or if you’ve been the merchant who lost out on such a sale — listen up: Visa® may have the solution. It’s a new service called Mobile Location Confirmation (MLC for short) that’s designed to reduce unnecessary purchase declines often triggered when consumers travel outside of their home area.
Announced in early February and available to U.S. card-issuing financial institutions in April, MLC uses mobile geo-location information to more reliably predict whether it is the account holder or an unauthorized user making a payment with a Visa account. Visa claims the app-based service can prevent unnecessary purchase declines by as much as 30 percent, based on issuer adoption of the service, cardholder adoption and approval decision.
An optional service for consumers that will be offered through participating financial institutions’ mobile banking applications, MLC works with Visa’s predictive fraud analytics to provide an analysis of the account holder’s device location data, which is then matched almost instantaneously with the transaction location at the point of sale. When a cardholder’s mobile device is in the same location as the payment transaction, the issuing financial institution can more confidently approve the transaction.
To enroll in MLC, cardholders simply download their card-issuing financial institution’s mobile banking app and agree to the use of their mobile location information for fraud prevention purposes. Consumers must ensure that their phone is periodically connected to a mobile or Wi-Fi network while traveling to receive the benefit of the service; they can deactivate the service at any time.
“We want Visa transactions to be the most secure, convenient and seamless payment choice,” said Mark Nelsen, senior vice president of risk products and business intelligence, Visa Inc., in a prepared statement. “By matching the location of the cardholder through a cell phone or other mobile device, to the location of the purchase, Visa’s new service will enable banks to feel more confident about authorizing a transaction that might otherwise have been declined due to suspicion of fraud.”
Visa notes that unnecessary transaction declines can mean lost sales for retailers, additional customer service costs for financial institutions and frustration for the cardholder who is unable to make a purchase when traveling. Visa estimates that issuing financial institutions spend hundreds of millions of dollars annually to manage customer service calls related to pre-travel requests and to research declined transactions. By providing financial institutions greater intelligence when approving transactions, Visa expects MLC to have an impact on millions of transactions annually and improve the experience for cardholders, merchants and financial institutions alike.
TransFirst, LLC is a registered ISO/MSP of Wells Fargo Bank, N.A., Walnut Creek, CA, and Synovus Bank, Columbus, GA, for Visa and MasterCard transactions only.