Location-Based Credit Card Security

Has your credit card company ever blocked a legitimate transaction because you didn’t inform them where you were planning to be? For frequent travelers, that nightmare is all too familiar and creates unnecessary frustration, often when you have the least time to deal with it. Understandably, banks and merchants are more vigilant than ever, with the level of fraudulent transactions reaching nearly $11 billion dollars per year worldwide. But, in this data-driven world, there has to be a better way.

New technologies are emerging that access a broader range of financial, location-based mobile and social-networking data to better identify whether that’s really you making a purchase or some hacker who has stolen your identity. By comparing your SIM card location with your Facebook posts about an upcoming vacation and cross-referencing the current transaction to your historical purchases, some systems claim to be able to improve fraud detection rates from 47 percent to nearly 80 percent. Using the most recent information, they can even calculate whether it would be possible to travel from the location of the last approved transaction to the current one.

Of course, allowing access to this level of information requires permission from users, and these systems still have their limits. But the trade-off is a better customer profile that’s much harder to fake.