Tue, August 19, 2008
Visa Announces Real-Time Notification System to Combat Credit Fraud
Credit card network facilitator Visa, Inc. announced today that it’s piloting a new system that can provide real-time e-mail or text message notification to a cardholder whenever a card transaction is made. Users will be able to define the minimum transaction amounts required to trigger a message. The system can also send a message whenever other triggering events take place: an internet credit card purchase, an overseas card use, or a telephone transaction, for example.
The system is being piloted with eight North American banks: PNC Bank, SunTrust Bank, U.S. Bank, Wachovia, and Wells Fargo in the United States, and Royal Bank of Canada, TD Bank Financial Group, and Vancity in Canada. Visa’s primary goal is to provide its cardholders with rapid notification in case a fraudulent charge has been made. Many banks already provide cardholders with notification when specified credit card balances are reached, but these systems register transactions much more slowly than real-time. Rapid notification is one way to reduce the damage done when credit card information has been stolen. An ID thief could be shut down within minutes of the first use of a card, rather than days later.
There are other potential uses for the system, too. I can imagine it being useful for people who need a way to control their credit card spending. Rather than getting a statement once a month and being startled by the number and amount of card transactions, you could have an immediate reminder every time you’ve used your card. As the week progresses, all those messages might provide some negative reinforcement. It could make it easier (for those motivated to do so) to identify and change ones’ spending habits. Parents who give credit cards to their college-age children could easily monitor weekend spending sprees. Thrifty spouses could keep tabs on their spendthrift sweeties.
Visa will probably have to work some bugs out of the system, but I hope that it succeeds and will soon expand beyond the two thousand pilot program users.