Announced in a joint press release on the Mastercard site, the global payments company is partnering with a mobile solutions company called Syniverse to develop a new solution that will reduce fraudulent use of credit cards. Conceptually, when you swipe your credit card at a store, the connected smartphone application would verify your geolocation data and approve the purchase. Basically, someone that was attempting to use your card anywhere else in the world would be out of luck unless they also has access to your smartphone as well.
In addition to reducing fraud, this link between a credit card and a smartphone would allow people to travel freely into other countries and use the card without any declined transactions. Of course, smartphone owners would need to have some sort of data plan when traveling. Syniverse plans to offer prepaid packages that will allow the use of the linking technology at a low cost. This allows the traveler to avoid expensive roaming fees that could potentially end up outweighing the value of using the credit card in the first place.
At the moment, the service is in a pilot test phase, but could be rolled out to the public before the end of the year. When it is ready for primetime, it will be an opt-in service for Mastercard users that are concerned about their financial security. Mastercard also recently announced a new in-app purchasing function for mobile users. Using the on-screen MasterPass button, users will have a one-tap solution that can be used when making payments on retail sites. This lets mobile users avoid the process of typing out a credit card number on their mobile device as well as all the associated security information that goes with it.