Let’s say you’re going to Somalia for a family vacation, you know, just to get away from it all. Additionally, lets say you brought your Visa card for any transactions while you’re away, because cash is for suckers. But wait! When you go to buy that tiki-lamp that you haggled on for nearly an hour, you find that your bank has denied the purchase. Inconvenient? Sure. But how is your bank supposed to know it’s you buying a tiki-lamp, and not some high-profile identity theft extraordinaire? Ericsson, a Swedish-based mobile solutions company, wants to make the whole process a bit less kludgy.
As stated by Peter Garside, U.K. and Ireland regional manager for Ericsson’s IPX, this service uses a person’s mobile phone to provide a confirmation that he or she is in the country where the transaction is occurring. Ericsson will play middle-man with charging and transferring funds from banks to the mobile networks using the service, keeping a fraction of the money involved.
Some people may assume this is another way of ‘big brother’ keeping an eye on your every move, but rest assured the information is used once and then omitted from Ericssons’s servers, says Garside. Once the approximate location is known, the bank receives the approval and the transaction will be completed.
This service seems to be a small victory for all parties involved. The mobile networks have an opportunity to generate a small income that is paid by the bank, the customer has an added element of security and convenience for travel, and the banks can really cut down on fraud that they have to suffer from all too frequently.
As reported by APACS, a payment card trade association in the U.K., nearly 40 percent of all fraudulent transaction that were tied to banks in the United Kingdom were actually made overseas, equating to a total amount of £535 million (or USD $848 million).
This is just a bang-up idea. This will be an opt-in service which seems illogical to refuse. Ericsson’s really making headway and trailblazing this movement, setting many customers at ease with third-world crime and identity theft. But we’ve got one question: what happens if the identity thief also snagged your phone?