MasterCard and Syniverse, a telecommunications company, are piloting a new program using smartphone technology to provide cardholders with enhanced security and easier approvals for customers using their credit card overseas. The partnership was announced at the Mobile World Congress in Barcelona this week.
Declined transactions are commonplace for travelers due to heightened security. Up to 80% of the transactions declined were legitimate, according to MasterCard. With this new opt-in program, when a cardholder’s mobile device is switched on in a foreign location, their credit card transactions will be enabled.
Syniverse’s system will keep track of the individual’s location through the use of geotagging to make sure they are actually present when they use their card. This information is then factored in when making the decision on whether to approve or deny a payment reducing the risk of card cancellations and payments being blocked unnecessarily.
Will peace of mind cost you?
There is one snag though. The smartphone user will have to turn their phone on and keep it on during their trip in order to use their credit cards. Many people traveling internationally turn their mobile phones off to avoid racking up overages and roaming fees.
To help with this issue, cardholders will have access to prepaid data packages when they arrive in another country, which can be bought directly through their phones in order to keep charges down and avoid surprises.
Using the geolocation feature in cardholders smartphones opens the door to more opportunities for issuers and consumers down the road. A research report developed by the Strategic Economic Engineering Corporation for Syniverse suggests that this technology offers issuers a way to increase their revenue by providing customers with targeted offers based on their location.
In the future consumers who opt in may begin receiving special offers via their smartphone when passing by a particular clothing store, restaurant or a car rental company. Personalized travel rewards may also be part of this package, offering cardholders coupons or special discounts based on their location and personal preferences.
Syniverse is technology and business services company, that provides roaming, messaging, business intelligence, database, and network services to the telecommunications industry. MasterCard has over 2 billion credit cards in circulation worldwide.