It is just more than a year since Visa introduced its Mobile Location Confirmation service.
And Visa has managed to nail down but two clients.
MLC, as Visa refers to the offering, is a mobile service that uses geo-location information to predict whether it is the account holder or an unauthorized user making a payment with a Visa account. A part of Visa’s security toolkit, MLC is arguably the most widely relevant geo-location service for payments introduced in recent years.
However, Visa, for some reason, has failed to convince banks to sign on to it. Only Emirates NBD has formally signed on to the service, and that was last April. Emirates NBD has around $77 billion of assets.
Visa told Bank Innovation last week that payment processor TSYS is also using the APIs through the newly released Visa Developer Platform, but no formal MLC announcement has been made by the companies.
MLC promised to greatly reduce transaction declines for traveling cardholders. Here’s how Visa framed the service when it was launched in February 2015:
While infrequent, unnecessary transaction declines can mean lost sales for retailers, additional customer service costs for financial institutions and, ultimately, frustration for the cardholder if unable to make a purchase when traveling. According to Visa estimates, issuing financial institutions spend hundreds of millions of dollars annually to manage customer service calls related to pre-travel requests and to research declined transactions.
By providing financial institutions greater intelligence when approving transactions, Visa expects to reduce such declines by as much as 30 percent, impacting millions of transactions annually and improving the experience for cardholders, merchants and financial institutions.
Visa insists that while Emirates NBD and TSYS are the only issuers using the MLC service, “we’re expecting some news in the coming months,” a spokeswoman told us.
In fact, that appears to be the case. In an interesting recent kickoff to his new blog on Medium, Dominic Venturo, EVP and Chief Innovation Officer of U.S. Bank (a partner in Bank Innovation’s newly launched INV fintech accelerator), disclosed that at U.S. Bank, “Visa Mobile Location Confirmation is one of the things we’ve piloted and are looking to make available to customers later this year.”
U.S. Bank would obviously be a big win for the Visa geo-location service.
Why, exactly, banks have not run to adopt the Visa service is anyone’s guess. From the launch video below, the service seems to have great reach and import. We can’t say whether Visa’s pricing reflects that, or whether implementation has been a hurdle. Venturo did indicate in the blog, as referred above, that a pilot is necessary before MLC goes live at the Minneapolis bank.
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