The festive holiday season brings with it the yearly boom of holiday shopping. Store aisles that are usually relatively calm are suddenly crowded; customers reach around each other to get to the products they want; and the usually serene scene of shopping is replaced with mayhem.
Along with the boom in shopping, unfortunately, comes a boom in fraud. Shoulder-to-shoulder crowds make it easier to steal wallets and credit cards and to use them quickly before the overwhelmed customer knows the card is missing. Who watches their wallet when faced with the challenge of shopping while dealing with kids, competing with other customers and remembering who you need to buy a present for? Unfortunately, the number of stolen credit cards and other fraud peak at the same time as the holiday shopping frenzy.
In many cases, the potential for fraud is even higher as newer technologies are adopted. Contactless cards are much harder to copy, but in some cases can have their card numbers read and copied by a high-end smartphone. Copied card details can be sent to the thief’s partner, who can use it for a purchase by swiping a second smartphone at the register.
Mobile technology and micro-location open up the opportunity for reducing fraud by checking a customer’s location whenever their card is used. A card that’s used in Connecticut when the cardholder’s smartphone is in New Jersey is at the very least worthy of additional scrutiny, and is likely to be a stolen or forged card. A card that’s used in a department store while its owner’s smartphone is in a shoe store in the same mall may be legitimate if the cardholder gave their credit card or their smartphone to someone else to use, but is equally likely to be a card that was just stolen and is being used quickly before the theft can be noticed and reported.
A current challenge in mobile location systems, however, is that GPS technology only works outside, when phones have very little between them and the satellites in the sky. A thin car roof or a glass skylight lets GPS signals through, but a typical shopping mall’s roof will prevent smartphones from knowing their locations as long as they’re indoors. In general, smartphones inside malls know that they’re in the mall, and might know which store they’re in from the Wi-Fi signals that they receive, but will not know their precise location. This means that an anti-fraud security system as described above cannot know whether a cardholder’s smartphone is at the register or in the fitting room, or whether the cardholder is holding their smartphone near the register at which their card is being used.
– Luc Darmon