App-based card controls can help members identify suspicious activity quickly. By Mick Oppy
App-based card controls can help members identify suspicious activity quickly.
By Mick Oppy
Sponsored by Vantiv
Fraud continues to be a problem in the United States, and it isn’t going away any time soon. It hurts card issuers, financial institutions, merchants, and cardholders alike. Gemalto reports a total of 888 data breaches in the first half of 2015, up 10 percent from the 803 breaches that occurred during the same period the previous year. Implementing EMV technology and chip cards to combat in-store fraud is expected to drastically reduce card-present fraud. But that decrease will likely include a counter reaction of increased fraud in card-not-present environments. The good news about EMV for financial institutions is that merchants now share the responsibility for preventing fraud instead of leaving the burden solely on issuers. Savvy financial institutions can go a step farther to ease the burden of fraud by putting fraud controls in the hands of cardholders. Giving cardholders control over their own cards is a great way to enlist their help in the fight against fraud. When cardholders have the power to restrict their card from being used in businesses they don’t frequent, for amounts they wouldn’t charge, and geographic locations they wouldn’t be in, they can make a dramatic impact on the ability to spot fraud, and respond in real time. Say, for instance, a cardholder primarily uses one card for groceries and gas as a way to accrue reward points. The cardholder can download an app on his mobile phone to place controls on the card that match the intended use. The controls may block the card from being used for online purchases and for amounts in excess of the cardholder’s average grocery bill. A control can also be set to decline any transactions made outside the cardholder’s local area. In contrast, a cardholder who uses her card for a broad range of purchases can set a card control app to send a message to her mobile phone when a transaction is made with her card. Some apps allow cardholders to set a control that requires the mobile phone to be in proximity of the card when a purchase is made. If the cardholder receives an alert about a purchase he didn’t make, he’ll be able to turn off the card immediately, and prevent any further fraudulent use. With this level of control, fraudsters don’t have the chance to make multiple transactions on a stolen or counterfeit card before the cardholder is aware of the activity. This alone can save a significant amount of money that would traditionally be lost to fraud. By giving cardholders control over their cards, your credit union can not only share the fraud responsibility, but also give members the confidence and peace of mind you want them to associate with your brand. Bottom line, card controls can increase revenue for financial institutions and complement their fraud solution, increasing cardholder trust, loyalty, and card usage.
Mick Oppy is VP/financial institution products at Vantiv. Its MobiMoney mobile app offers cardholders a convenient way to manage their prepaid, gateway credit, and debit cards. Read an article about how Educators Credit Union’s app lets member set purchase controls.
