Nobody thought about Combating Credit Card Fraud using Location in PFM Space

BillGuard promotes itself as an antivirus system for bills. It generally uses predictive algorithms to alert users about unexpected charges on payment cards such as billing errors, hidden fees and other fraudulent scenarios. BillGuard, which comes as a dedicated app for both Android and iOS, is bringing an interesting feature to improve its security level. The app will now use the phone’s location to alert users if the card is used in an unrecognized location. The app makes use of Yodlee’s APIs.

Banks and card providers have been trying to replicate such location based features. Banks can alert user about transactions made at foreign location but won’t notify the user if the current location is the home country itself. Even card issuers, similarly to banks, can only notify up to that level. BillGuard, being a personal financial management (PFM) app traditionally, is the first of its kind to have introduced location-based features in the PFM space and that too for aiding in the war against credit card frauds.

When users opt-in for this service, BillGuard will start keeping track of locations where the user’s card is being used on a regular basis. It can use this data to match with the location of future transactions and alert users when required. Suppose a transaction is detected from a location you have not been to, BillGuard will make sure you get the alert. Sometimes criminals use stolen card information to make transactions in the same areas as the cardholder to avoid banks triggering those as suspicious transactions. BillGuard’s new feature will even help fight against such scenarios.

The following illustration shows how the location feature looks like:

The BillGuard app does not act like those activity monitoring apps which measure user’s location continuously. So it does not become much of a burden on the phone’s battery life. When a user reaches a new location, it notes the location around just 2-3 times to get the rough estimate. In certain cases, it is able to track location even when the phone’s GPS is switched off. It performs on a lower level of location monitoring.

BillGuard is also highlighting a feature where it can determine valid ‘card-not-present’ transactions such as those made online or via telephone. BillGuard also provides personal finance management features using an in-built transaction map. The new location based feature is currently available only in U.S. and would soon be available to other regions as well.

The location based feature comes at a time when financial institutions are exploring ways to use location-based services to prevent fraud and avoid blocking transactions without cause. For example, Westpac, in Australia, had updated its app to monitor customers arriving at airports, prompting users to inform the bank about overseas travels. The Lone Star National Bank in Texas had partnered with fintech firm OnDot last year to enable location monitoring feature in their banking app.