Privacy advocates say they are generally in favor of payment processing firm Visa’s new geo-location verification service.
Visa will roll out the new feature in spring which allows cardholders to inform their bank of their location automatically via their smartphone’s location tracking function.
Cardholders can opt-in for the service which will designate a customer’s ‘home territory’ of about a 50-mile radius of where they normally make card purchases.
These will be considered low risk transactions.
When travel takes that person outside their home area, the smartphone’s geo-location function will act as an added security feature.
When the card is presented for payment in the new location, Visa will know the cardholder is there and will be less likely to deny the transaction due to possible fraud.
Visa said it is an optional service and can be turned off at any time.
It also said it will not be used for any marketing or upselling purposes.
Jules Polenesky, of the Future of Privacy Forum worked with Visa to address any potential privacy issues.
"When a trusted party — and I think people think of their bank as a trusted party — is looking out for you using what technology they have, I think people will welcome that," Polenesky said.
Justin Bookman, director of consumer privacy at the Center for Democracy & Technology was also in favor as long as it remains an optional service and Visa are transparent on how the location tracking data will be used.
"We effectively share our location with our banks every day when we swipe our credit cards. As long as it remains optional, I believe it’s a worthwhile idea," Bookman added.
However the function does have some obvious limitations.
It will not be able to stop rogue transactions if a card and smartphone have been stolen together and the cardholder has not yet reported the theft or loss.
Visa also said it is still working on added security features to reduce the number of online transactions made with stolen and counterfeit cards.
