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New mobile technology helps reduce ATM fraud risk

November 6, 2013

A new service for debit card and credit card issuers aims to improve the safety of payment card transactions through proximity correlation, comparing the physical location of a cardholder's registered mobile phone against the location of the ATM or POS terminal where the card is being used.

FICO Proximity Location Service, part of FICO Fraud Resolution Manager, allows the issuer to use this proximity to determine whether a cardholder account should be blocked or cleared for further activity.

In trials of the service with U.K. card accounts, the proximity matching reduced the number of "false positives" (genuine transactions that appear to be fraudulent) on international transactions by as much as 70 percent.

Several U.K. banks are now developing deployment plans for the new FICO service, which has been developed in partnership with ValidSoft, a subsidiary of Elephant Talk Communications Corp.

"Banks are trying to perfect a tricky balancing act — protect customers without causing undue frustration for cardholders who travel or who use their cards in new locations,” said Gabriel Hopkins, senior director of product management at FICO. “Proximity correlation adds a powerful new tool that can help banks eliminate a great source of frustration for their customers who travel. With this service, cardholders can use their cards in other countries with significantly lower risk of being declined."

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