March 31, 2015
Zumigo Corporation, an upcoming player in mobile device location and identity verification, has come up with a merchant payments validation service based on the real-time location of a customer’s mobile phone, as well as a service to verify consumers’ identity and credit card credentials during online purchases to prevent e-Commerce fraud. This new functionality is part of the Zumigo Assure Payments mobile solution.
While merchant processors confirm whether or not a payment is authorized, they don’t protect merchants from charge-backs later on if the credit card credentials are determined to be stolen. If fraud occurs, merchants have already shipped the merchandise and incur the full brunt of the loss. Now with Zumigo, merchants can have an additional layer of protection from thieves using stolen credit card credentials. By verifying the transaction information supplied by a consumer, such as name, address, and mobile number, merchants can prevent fraudulent purchases before they happen.
Zumigo’s new solution verifies the purchaser’s identity against mobile billing records delivered through Zumigo’s partnership with mobile operators and Equifax. This verification includes matching the credit card ownership details against the owner of the mobile device identified in the shopping cart. In addition, Zumigo can identify the real-time location of the mobile phone to be compared against the IP address, as well as the shipping and billing address of the purchaser. When all of these relevant data points match, merchants can be assured of a lower-risk transaction while identifying higher-risk ones for additional scrutiny or denial.
It's unclear how Zumigo differentiates its offering from other players who seem to have a significant head-start in this space, specifically Payfone, which is backed by Early Warning (along with all its member banks), American Express, Verizon and all the other Tier 1 mobile operators.
Here are two other use cases which also highlight location based authentication from a user’s perspective:
Visa has created a Mobile Location Confirmation service for payment authentication. This service can be integrated into mobile banking apps, after which, if the mobile device is in proximity of the payment transaction during the payment authorization process, the issuer can then confirm the transaction. Visa Mobile Location Confirmation uses mobile geo-location information to more reliably predict whether it is the account holder or an unauthorized user making a payment with a Visa account.
BillGuard, which comes as a dedicated app for Android and iOS, brought an interesting feature to its app that uses the phone’s location to alert users of suspicious payment card usage. 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. For example, if a transaction is detected from a location you have not been to, then BillGuard will make sure you get an 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.