Managing credit and debit cards is still a relatively complicated process. You can control some elements of your cards like accessing your balances and transferring money online, but you can’t turn off cards or set transaction types via the web or from a mobile phone. Ondot Systems, a stealthy company that has raised $18 million in funding, has developed a white-label solution called CardControl that gives consumers control over when, where and how their payment cards are used.
Ondot has partnered with four major card processors who handle transactions for credit, debit and prepaid cards for 10,000 banks and credit unions across the U.S. to allow for the immersive experience with cards. With CardControl, card issuers like banks can provide their customers with a single mobile application to remotely manage all aspects of their existing payment cards.
Users can lock or unlock cards with a single touch and specify location preferences for payments by region and proximity. You can also set merchant types, transaction types and spend limits, as well as personalize preferences according to your spending behavior. Additionally you can receive transaction alerts and offers, and view available balances, analyze spending trends, and manage transactions.
For example, parents can integrate their kids’ credit cards and set limits on spending, types of expenses (i.e. gas and food are ok, retail stores are not) and even see where kids are spending in real-time. The use case can also apply to child care providers or employees.
Of course, this platform is being sold as a white-label solution to credit card companies and banks. And the underlying technology is so complicated, that it has taken two years to develop the product, explains Ondot’s founders. “We think giving consumers tools to control, monitor, and manage card usage is a cost-effective way to protect cardholders and enhance the value of existing debit, credit, and prepaid cards,” said the company.
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Ondot already has a client using its services — Lone Star National Bank. In the past year of using Ondot, the bank has experienced a reduction in fraud costs by 60 percent, increase in card usage by 54 percent, increase in card spend by 48 percent, and an increase in cardholder base by over 15 percent.
“With CardControl, we were able to decrease our fraud losses from $450,000 in 2012 to $180,000 in 2013, a reduction of over 60 percent. This has been a big breakthrough, and justifies the solution on its own,” says David Penoli, LSNB’s COO. “Getting our cardholders to use their cards over 50% more has been the most cost-effective way to increase debit card margins. Not only does it drive direct revenue, but engaged cardholders are more loyal, have higher deposits, and also come to us for loans and other financial services, which drives additional pull-through revenue.”
What Ondot is offering is certainly the way the industry is heading. Giving card holders complete control over their accounts and cards via their phones is something that I predict we’ll see soon from all the major credit card companies and banks. Already many of these banks are starting to offer similar features, so Ondot’s platform could be more appealing because it bundles all of this in one.