Ericsson targets credit card fraud
Travelers in certain high-risk countries are increasingly likely to have their credit card transaction rejected if they haven’t thought to notify the credit card company of their travel plans. But such embarrassing inconveniences could be a thing of the past with Ericsson pushing a security service that uses a person’s mobile phone to confirm they are actually in the country where the transaction is taking place.
Ericsson’s IPX Country Lookup service requires Ericsson’s technology to be installed on a mobile operator’s network and every time a bank wants to verify a certain transaction by one of their customer’s mobile phones, Ericsson will pay the operator a “small fee”. Ericsson will then put a margin on the lookup fee and charge that to banks. Ericsson is courting banks with the service in the belief that it will eliminate embarrassing credit card transaction rejections and cut down on credit card fraud.
The service was made possible when Ericsson figured out how to extract the location information from operators worldwide. The technology only identifies what country a person is in and not where they exactly are in that country. It only works for GSM networks and will work even if someone’s phone is off – as long as they’ve turned the phone on at least once when they’re in a new country. Mobile phones will register with the local operator when turned on in a different country, so Ericsson will be able to query the last known location.
Banks will be able to set their own policies around the lookup service. A bank may decide it only wants to pay a lookup fee for card transactions that occur in certain countries, cough-Romania-cough, for example.
To allay privacy concerns, Ericsson is recommending that the banks should get consumers’ consent prior to using the transaction verification service and once a person’s approximate location has been passed onto the banks, that data will not be held any longer. With the ever-increasing level of cross-border credit card fraud, the opt-in service could be one it would be silly to refuse.
[PC World]
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