MasterCard recently announced a new security system which will only allow credit card transactions if the owner of the card is nearby as determined by the smartphone's geolocation.
The announcement came after news about credit card security such as identity fraud and stolen data became prevalent, CNET reports.
On Tuesday, Mastercard revealed their latest plan to counter fraudulent credit card transactions. The company is teaming up with Syniverse Technologies, a mobile technology company, to ensure that unauthorized users won't be able to use stolen credit cards in any form of transaction. The newest security tactic by MasterCard involves using the owner's smartphone geolocation to see if he or she is within close range with his or her credit card.
The idea is to decline the transaction if the owner of the card is not within close range, as seen by their phone's geolocation. For example, if the owner of the card is in the U.S and the card was being swiped in Canada, the transaction will not go through.
To ensure that this new security feature won't cost their patrons too much costs on roaming fees, MasterCard is also offering prepaid data plans. These data plans will enable card holders to continue using their phone's GPS while they are outside the country.
"This collaboration of two global technology leaders opens up a whole new range of possibilities for end users, ensuring a seamless payment and mobile experience," Hany Fam, MasterCard president of Global Strategic Alliances said in a statement.
"By leveraging the speed and intelligence of our global network and combining it with geolocation solutions, we are enabling your MasterCard to uniquely work where you and your phone are, anywhere in the world", he added.
Experts agree that this new system by Syniverse and MasterCard is a step towards the use of digital wallets. In October 2013, American Express, Visa, and Mastercard have announced a collaboration to create a new digital payment platform. This new system's goal is to give consumers a more secure way of doing their transactions online through the use of a "token".
This smartphone security feature is still on its final stages of planning and when implemented, cardholders can choose whether to use it or not.
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