Credit card security has been a major focus following the card data breaches at major U.S. retailers. MasterCard has come up with a way to prevent fraudsters from using stolen credit card information — by ensuring that your card is actually being using by you.
Through a partnership with Syniverse, a mobile technology company, MasterCard is piloting an opt-in service that will permit card purchases only when a cardholder’s mobile device verifies the person’s geolocation.
“By leveraging the speed and intelligence of our global network and combining it with geolocation solutions, we are enabling your MasterCard to uniquely work where you and your phone are, anywhere in the world,” said Hany Fam, president of global strategic alliances at MasterCard, in prepared remarks.
The pilot is being held in Europe, while the service is expected to be available in North America and Asia later this year.
There are two major benefits to the extra authentication layer: it protects card fraud and it offers convenience to card customers who travel often.
Stolen credit card information is often sold in underground markets, after which it is used to replicate cards. These cards are then used to make unauthorized purchases. MasterCard’s new geolocation-based authentication service will reject such fraudulent card transactions because they don’t occur in the same location as the cardholder’s mobile device.
Additionally, frequent travelers may encounter the hassle of having their cards declined when they try to use them abroad. Card issuers may automatically refuse to process transactions if it suspects fraudulent activity. Some card issuers allow cardholders to put in a travel notification to avoid this inconvenience.
However, the new MasterCard security feature will serve as an authentication measure, which means customers don’t have to do anything to ensure that their purchases abroad will not be denied.
The geolocation-based service is just one of the ways that MasterCard aims to thwart rampant card fraud. The company already on track to implement a mandate that will require merchants to accept EMV chip cards, which are known for being more secure than traditional magnetic strips.