Both my Visa and American Express cards provide text (SMS) alerts for transactions.  My credit union, BCU, provides real-time alerts on my Visa card.  The service is so fast I get a text message about a restaurant charge before the waiter comes back with my card.  When using the card at a retailer, the text comes before I can put my card back in the wallet.  American Express has a similar service but the text delivery has a bit of delay such that I cannot describe it as real-time.  Both card services are valuable to track family and business usage, and to help reduce/prevent fraud.

However, the alert message is only half of the equation and financial institutions are missing a huge opportunity to improve customer service and loyalty – all while reducing cost exposure to fraudulent transactions.

For example, I recently went on a trip to Florida and made a visit to Wal-Mart to purchase some beach items.  Upon checkout I swiped my Visa card.  Card declined.  Within another second I got a text stating, “BCU Visa ending in 6790 was declined at WAL-MART in SANTA ROSA BE US.  Questions, call number on back of your card.”  A similar message appears on approved transactions but with the charge amount and the same “Questions, call number on back of your card.”  American Express uses a similar message of “If unrecognized call # on Card.”  Really?  This is the best Visa and AMEX can do?

Back to WalMart and my declined card, my friend asked if I needed his credit card to pay.  Fortunately, I had my B of A debit card and completed the transaction.  Later in the day, I finally called the Visa Card Representative to find out why the card was declined.  The nice person on the other end of the phone told me the Fraud Department raised the transaction as suspicious since my last charge was in my home state (not Florida).  While I appreciate the fraud monitoring service, there is a better way – a way to improve customer service while also better protecting the bank.

Here’s how (the easy way) for a bank to send a suspicious transaction text message: “Suspicious charge at XYZ for 150.00 USD, was this you?  Text Y237 or N541.

If the user replies Y237 (Yes, this was my charge), the Fraud Department is duly noted.  The cardholder continues using her/his card without interruption.

If the user replies N541 (No) or does not reply, the system should send the appropriate information to a Card Representative and initiate an outbound call to the mobile number of the cardholder.  From there the bank can use its existing processes to review and/or lock the card.

Note: In both cases, the initial charge is allowed to prevent “false-positives” – aka embarrassment to the cardholder.  With this model, the cardholder is an integral part of fraud prevention and detection.

For those institutions looking for a more secure transaction approval process, the scenario could look as follows:  “Suspicious charge at XYZ for 150.00 USD.  If this is you, confirm at https://mybank.com/z791qwa”

When the cardholder clicks the URL, a secure mobile Web session is started and prompts the cardholder to authenticate with her/his online or other credentials.  Upon success, the Fraud system is updated to reflect the charge.

If the user does not confirm the transaction, the card is subsequently put on hold.  The same outbound call should occur by the Card Representative.

Why aren’t banks and credit card companies doing this?

 

Want to learn more about how to differentiate your bank with mobile?  Join Pervasive’s free Webinar for insights around alerts and other mobile capabilities to create a Competitive Advantage:  https://www3.gotomeeting.com/register/695379534