Visa Europe has entered into a contractual arrangement with ValidSoft for the provision of its fraud-prevention solutions to Visa Europe's member banks.
Under the agreement, Visa Europe will offer the fraud detection and prevention solution VALid-POS for ATM and point-of-sale and the VALid multi-factor authentication platform for multiple banking channels. As part of the deal, Visa Europe will integrate and market ValidSoft's solutions to its member banks, who have collectively issued more than 380 million Visa cards and supported purchases and cash withdrawals of more than £822 billion
According to ValidSoft, VALid-POS uses telecommunication technology accessing the global mobile phone network to confirm in real-time whether a cardholder's mobile phone is within the proximity of the ATM or merchant terminal at which the card is being used. This practice aims to minimise the number of inappropriately declined cross-border transactions and, subsequently, improve fraud discovery rates.
It also said that VALid is an telecommunications (voice and SMS) based solution that uses two specifically designed separate channels for combating the most advanced fraudulent techniques, such as man-in-the-middle and man-in-the-browser, along with the more traditional attack vectors.
Pat Carroll, CEO of ValidSoft, said: “We are absolutely delighted to be working in partnership with Visa Europe. Our solutions are at the forefront of technology innovation and we believe the convergence of payments and mobile telecommunications aligns with the underlying principles of VALid-POS, proximity correlation of a transaction to a mobile phone.”
Steve Chambers, Visa Europe's chief information officer, said: “Security is fundamental to Visa Europe's business and we feel that the solutions offered by ValidSoft can help us in our continuous efforts to address the increasingly sophisticated methods used by criminals. Visa Europe will never cease in finding ways to protect the interests of our European member banks and help them, in turn, protect those of their cardholders.”
Avivah Litan, vice president and distinguished analyst in Gartner Research, said: “We believe these services have great value when it comes to protecting payment accounts and preventing fraud, and many more banks and card companies will adopt them once they see the value.
“Many financial institutions are interested in using these services for fraud detection but are concerned about the privacy implications and don't want their customers thinking they are following them around. ValidSoft has been certified as ‘privacy respectful' by EuroPrise, a European-based privacy group, and has agreements with the mobile networks it works with and through to respect their privacy policies, removing the largest barrier to entry for leveraging these services – privacy concerns.
“We believe Visa Europe's move is the start of this trend, and that many more card companies and banks will follow by adopting this technology. After all, our mobile phone is practically tied to our umbilical cords, we rarely leave home without it. Visa knows it and so do the rest of us. Why shouldn't it serve as a useful tool for preventing fraud against us?”