By : Robert Johnston
October 16, 2014 09:16 AM
Mobile card controls were introduced by the industry in 2012 and have been strong additions to the financial industry's stable. The technology allows bank customers to set limits on their payment cards from their phone. This has many potential uses, but so far the biggest value is in being able to turn your card on and off at will.
More than 200 financial institutions have launched this type of service to their cardholders, but with early adopters relatively small players in the main, the success has gone unnoticed. But as a new report suggests, the future for this technology is promising.
Mercator Advisory Group’s research note argues mobile controls fit hand-in-glove with the two strongest trends in banking; self-service technology and improved account security.
“Implementations of card controls have so far been concentrated among debit portfolios, and a simple On/Off authorization switch has been the most utilized feature,” comments Michael Misasi, senior analyst for the Credit Advisory Service at Mercator Advisory Group.
This is useful in many circumstances and for many consumers but predominantly it works as a great anti-fraud tool. So if the customer’s card is lost or stolen they can simply deactivate it straight from their mobile, instead of phoning the bank. This has a lot of value for financial institutions, as the simple procedure at present requires the operating and staffing of 24-hour call centers.
Parents could also make very good use of the feature. For example, they could lend their spare card to their children as a backup. If they need to use it they can phone up mom and dad and they can turn it on briefly for them to pay for goods or draw out some cash. Other limits could also be set so they can only withdraw a certain amount of money at a time.
Indeed the potential for mobile controls goes well beyond a simple on-off switch, especially when it comes to credit cards.
“There is potentially a very significant opportunity for credit issuers to use a more comprehensive feature set to capture spend from other payment types and decrease some customer service and fraud resolution expenses,” says Mr. Misasi.
Mobile controls point to a wider trend in the industry - how to give consumers more control over their finances. Empowering consumers is an essential approach that’s driving better experiences. The fact it’s also an easy way to reduce fraud is the icing on the cake.
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