Sony Ericsson is pushing a new location-based service on mobile operators that it says will reduce the instances of credit card fraud.
Called IPX Country Lookup, the service locates a person’s cellphone–to the country level–to verify credit card transactions. Because many countries don’t use personal identification numbers to verify the user of a credit or ATM card, criminals can duplicate cards they steal in countries that use PIN techology and commit fraud with said card in countries that don’t. By using IPX Country Lookup, it can be verified that the credit card owner is in the same country a transaction is taking place. Obviously, if the owner and the credit card are in different countries, the transaction is probably fraudulent and won’t go through.
Mobile operators who opt-in will have the service installed on their networks for free. Sony Ericsson will pay operators a small fee anytime a lookup is requested, and being the middleman, will put a margin on the payment and then charge it to the participating bank requesting authorization.
Privacy concerns will have to be addressed here. While IPX Country Lookup only verifies what country a person is in, it’ll have to explicitly inform customers that their general location is being tracked. However, Sony Ericsson says that the location is only kept during the transaction and is automatically deleted once the deal occurs.
The service, only available on GSM networks, will be customizable for the banks. For example, banks can choose which countries they choose to be included in the verification process. This’ll allow them to avoid paying fees when transactions occur in countries where fraud isn’t a big problem.
