Now in Pilot, Visa’s Consumer Alerts Set to Roll out Later This Year

Visa Inc. is taking steps to more actively recruit consumers in its fraud-fighting efforts, including the development of an early-warning system that notifies cardholders in real-time when their cards are being used. Visa's Transaction Alert system, currently in pilot at banks including U.S. Bank, PNC Corp., and Wells Fargo & Co., notifies cardholders via e-mail or mobile phones when their cards are being used for a purchase. “It's a great fraud-mitigation tool because if you see a transaction that you did not do, you can immediately call your issuing bank and alert them about it,” says Prakash Hariramani, senior business leader for Visa The consumer can personalize alerts, asking for notification by transaction size, online purchases, or foreign-currency transactions. For example, a cardholder can ask to be notified of transactions of $2 or more or cross-border transactions, Hariramani says. “If you subscribe to the service and you go make a transaction, then depending on the threshold and parameters that you've set, you get an alert in near real time,” Hariramani says. “In most cases, when I transact, even before the cashier prints out the receipt, I get an alert on my phone. JPMorgan Chase & Co. already offers Transaction Alert to its cardholders with Google Inc.'s Android operating system for mobile devices (Digital Transactions News, Sept. 25, 2008). Transaction Alert is expected to be rolled to all Visa issuers later this year. Visa also is developing a second program?Targeted Acceptance?which will allow consumers to set personal limits on how their cards can be used, such as dollar amounts, geographic limits, or merchant segments. Any transaction outside the limits would be automatically declined, before fraud can occur. The service already is available on commercial cards and will be offered to consumers at a later date. At Visa's March 19 Security Summit, Ellen Richey, Visa's chief enterprise risk officer, said that consumers need to be part of the security solution. “Everyone has a role to play in securing the system?including consumers themselves,” she said. “And so, while Visa and its issuers already monitor and risk-score transactions, we can achieve even more by providing consumers with additional tools and putting more information in their hands.” While in the past, the card industry could take care of security for consumers and simply assure them they were protected, today's consumers are worried about more than just fraud, Richey said. “They are fearful about who might be using their personal information?and where and when,” she said. “These consumer fears are real. They impact behavior. And they must be accounted for in how we approach system security.”