Don't you hate it when you are surprised by your credit card statement? Sometimes you don't expect to see certain types transactions, while other times you could be unaware of some spending by your authorized cardholders. And most importantly, you never want to find fraudulent charges on your bill.
Thankfully, Visa just announced a new program to give credit card issuers a way to control their cards in several new ways. Banks and credit unions that adopt Visa Consumer Transaction Controls can choose from several new features that allow cardholders to manage their accounts better while enhancing security.
How These New Features Work
There are four key features that Visa is introducing, which can be activated by a mobile app on a smart phone or the old fashion way using a website.
1. Temporarily stop transaction approvals. This allows cardholders to temporarily suspend their own account when they believe that their card has been misplaced. Think of this as an interim measure that can be taken before actually reporting your card lost or stolen.
2. Manage specific transaction types. This feature allows you to block specific types of transactions or be alerted when they occur. For example, you could set up an alert when a purchase is made in-store or online, or you can block international purchases or ATM withdrawals.
3. Set spending limits. This allows you to limit the size of a single purchase, or the amount of purchases over time. In addition, you can set spending alerts based on these criteria.
4. Manage multiple cards. This system allows you to set the same alerts and controls on the cards issued to your authorized users, giving you greater control over your account than ever before. So if you have a family member who is an authorized user on one of your credit cards, you can set limits on their spending or alerts as necessary.
Presumably, the technology to implement these features has been around for some time, so why are we seeing Visa roll out this capability now? First, credit cards issuers are trying harder than ever to tackle fraud in the wake of numerous high profile security breaches. In its press release, Visa claims that "While actual fraud in the Visa system is low, about 6 cents out of $100 transacted, Visa data shows that consumers who receive Visa transaction alerts experience 40 percent less fraud than account holders who do not." Lowering fraud reduces the cost to Visa, card issuers and retailers, while preventing some of the headaches that cardholders face when they must identify and report fraudulent transactions.
Furthermore, the credit card industry is being threatened by other competing methods of payment, including the proliferation of prepaid debit cards, many of which offer similar alerts and spending limits for both the primary cardholder and additional authorized cardholders. Finally, the adoption of EMV smart chips in most new credit cards has increased the price of producing replacement credit cards from about $0.10 each to approximately $1. So when customers are unable to find their cards, banks are now much more interested in letting customers temporarily suspend their accounts rather than immediately report their card lost or stolen. In many cases, the missing credit card turns up later and the account is reactivated, which is a better outcome for everyone involved.
Nevertheless, this system is just now being offered by Visa to banks and credit unions that issue credit cards to their customers. And if these financial institutions choose to implement these tools, it will take some time until these features are made available to credit card users. But as time goes on, it will be nice to see that credit card users will now be able to take greater control over their accounts, and be less surprised by their monthly statements.