By Kevin Woodward
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 the rampant data breaches fueling 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 in a blog post, includes payments companies and not just banking-services providers offering the service. That’s the big change, he says.
“Some of the functionality overlaps, but some are different, too,” Gaynor tells Digital Transactions News. “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, including the ability to restrict transactions by merchant type and the 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 usage.
Indeed, several companies now offer such controls. Earlier this year, MasterCard Inc. added location technology to its card-control services and Visa Inc. launched Consumer Transaction Controls that enables Visa issuers to set transaction limits on their credit, debit, and prepaid cards. Financial-institution processor Fiserv Inc. offers CardValet. Others include debit network Shazam, Discover Financial Services, and vendor Ondot Systems Inc., whose 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, but 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. “With business banking, they’re an employee of the business,” he says of corporate card users. “They get rights to do certain things.” Consumer cardholders do not have such restrictions.
Corporate card managers want to enable their employees to shop at certain merchants, but within specified transaction limits, he says. Business bankers like this because they view it as attractive to their clients with corporate card programs, he says. Now, instead of requiring individual profiles with limits for each corporate cardholder that have to be set up with the bank over the phone, the client will be able to set it up himself, Gaynor says.
Card Management 2.0 already is driving usage, he says. These expanded features are generating 10% to 15% higher usage among consumers using the Malauzai service.