MasterCard turns to text to foil fraudsters

MasterCard is trialling a new system to try to cut fraud - by adding mobile text messaging to the security mix.

The credit card company has signed on mBlox to provide an SMS alert system, aimed at providing an extra safety barrier against potentially fraudulent credit card transactions.

European banks will be the first to be able to use the SMS system, which will be bundled with MasterCard's own anti-fraud tool. It will query high-risk transactions by sending an SMS to account holders, asking for their confirmation that the transaction is a genuine purchase.

Cardholders will be able to give their mobile number over online banking channels or over the counter.

If the cardholder confirms the transaction is fraudulent, the card can be blocked in minutes, instead of having to go via the bank's call centre operatives. The companies claim the SMS system will cut the response times by 90 per cent and costs by 20 to 30 per cent.

Citibank UK is the first financials institution to review the technology, Johan Gerber, associate VP, risk products at MasterCard, said. "We expect an answer from them soon," he added.

The service will be mooted to Asia-Pacific, North America and other regions later in the year, with the anti-fraud SMSes expected to hit customers from the second half of the year, Gerber said.