New Markets: Apps That Use Your Phone to Fight Credit Card Fraud

SMS service notifies customers when their cards are charged, helping them identify fraudulent transactions faster.

Who is doing it: Visa Europe is piloting a system in four European countries that sends text messages to customers when their credit card is charged. Some banks in Italy and Spain have built their own SMS alert systems, but Visa aims to develop its own platform that banks could subscribe to, says Mary Carol Harris, head of mobile for Visa Europe.

How it works: With text alerts, consumers learn about fraudulent transactions faster and can shut down their cards. It hasn't been determined whether the customer or the banks would pay for the messages but Harris said banks could pay and offer the service as part of a bank account package. SMS alerts have been used in countries such as South Korea for several years. In the U.S. and Europe, however, the SMS alert systems are less prevalent.

Growth potential: One U.S. bank, JPMorgan Chase, is offering a free notification application for Visa transactions on Android OS phones. It's more advanced than text messages in that customers can sort transactions by date and amount, says Harris. "We're probably going to see a shift from SMS banking to these kinds of downloadable apps," says Marc Beccue, senior analyst for consumer mobility at ABI Research. "It's really driven by an overall lift in consumer interest in all things mobile Internet."

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