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DT, December 2016

Card Controls Gain Usage As More Precise Controls Emerge
December 1, 2016

Card controls, a way to empower consumers to control when and where their credit and debit cards are used, are evolving.

Viewed as one way to contend with rampant data breaches fueling ever-increasing payment fraud, card controls are moving beyond the simple on-off switching capability of the first generation, says Robb Gaynor, founder and chief product officer at Malauzai Software Inc., an Austin, Texas-based vendor of mobile-banking products.

This next iteration of card controls, which Gaynor labels Card Management 2.0, includes payments companies as well as banking-services providers offering the service. That’s the big change, he says.

“Some of the functionality overlaps, but some [is] different, too,” says Gaynor. “For instance, we can do an ATM limit increase in Card Management 1.0, but it’s not something the card processors can do because they deal with the point of sale.”

Card Management 2.0 offers additional controls, such as the ability to restrict transactions by merchant type and type of transaction, such as online, Gaynor says. It also can incorporate a user’s location, derived from the GPS signal of a smart phone, affording the issuer and consumer more insight into card use.

Indeed, several companies offer such controls. MasterCard Inc. added location technology to its card-control services and Visa Inc. launched Consumer Transaction Controls, which enables Visa-issuers to set transaction limits on their credit, debit, and prepaid cards.

Fiserv Inc. offers CardValet. Others include debit network Shazam and Discover Financial Services. And vendor Ondot Systems Inc.’s service has the capability to switch acceptance on and off by merchant category.

Currently, of the 225 banks using Malauzai’s card-control service, all are offering it within their mobile-banking apps, Gaynor says. None offers it as a standalone app, which some of the payments companies do, he says.

Consumers have taken to the service. When offered, 15% of active mobile-banking users access the card-management feature each month. A smaller percentage—3.5%—actually turn the card on or off. This places the service within the top seven features of mobile banking, Gaynor says. Surprising to him is that approximately 5% to 7% of consumers leave their cards off at any given time.

Card Management 2.0 also may make it easier for businesses using corporate card programs to more easily control card activity among their users, Gaynor says.

This next generation of card management already is driving usage, he says. The expanded features are generating 10% to 15% higher usage among consumers using the Malauzai service.

—Kevin Woodward

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