Encourage Cardholders to Share the Fraud Responsibility with Mobile Card Controls
Fraud continues to be a problem in the U.S., and it isn’t likely to go away any time soon. It hurts card issuers, financial institutions, merchants, and cardholders alike. NASDAQ reports that in 2014, more than one billion data records were compromised, up 46 percent from the year before. The initiative around 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 an inverse reaction of increased fraud in card-not-present environments. The good news about EMV for financial institutions is that merchants now have a shared responsibility for preventing fraud instead of leaving the burden solely on issuers. But 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 a cardholder has 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&nsbp;real-time.
Say for instance, a cardholder primarily uses one card for groceries and gas as a way to accrue reward points for their everyday purchases. The cardholder can download an app on their mobile phone to place controls on the card that match the intended use. They may block it from being used for online purchases and for amounts in excess of their average grocery bill. They can also set it to decline any transactions being made outside of their local area.
An advanced card control app like Vantiv’s MobiMoney will alert the cardholder by sending a message to the customer’s mobile phone letting them know an authorization was attempted with their card. This can be greatly beneficial to cardholders who use their cards much more broadly and do not wish to set specific parameters for card usage. Instead, they can simply opt to be notified of every purchase being made, in real-time. They can even set a control that requires the mobile phone to be in proximity of the card when a purchase is made. If they didn’t make a purchase themselves, and receive an alert, they’ll be able to take action immediately to turn off the card 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 fraudulent activity. This alone can save a significant amount of money that would traditionally be lost to fraud. By giving cardholders control over their card, your financial institution can not only share the fraud responsibility but also give your customers the confidence and peace of mind you want them to associate with your brand.