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MasterCard wants to know where you are

Kelly Dilworth

The global payments firm MasterCard says if it knows where you are, it can help protect you from data theft — and send you targeted coupons.

The card network announced Feb. 25 it’s developing an opt-in fraud protection service that will only allow you to charge on your card if your cell phone’s geolocation data shows you’re nearby.

Capitalizing on the fact that we don’t go anywhere anymore without our phones, the service is designed to cut down on fraudulent purchases by blocking any transactions that are made far away from your cell phone. So if your credit card details were swiped in a Target-like data breach, a fraudster can’t use your card abroad if your cell phone shows you’re still in the U.S.

MasterCard wants to know where you are

The new service — which is being developed in partnership with the mobile technology company Syniverse — will also make it less likely that your transaction will be declined if you charge your card in a foreign country without telling your credit card issuer you’re traveling abroad. (If you routinely shut off your cell phone when you travel in order to avoid roaming charges, MasterCard and Syniverse have solved that problem, too: For a fee, you can sign up for a special data package directly from your phone that allows you to keep your phone on while you travel.)

Not just for fighting data theft
Enhanced security isn’t the only reason MasterCard wants access to your geolocation data.

MasterCard’s announcement also briefly mentions another, potentially more lucrative, motivation for tapping into your physical location: Your geolocation data will also allow retailers to target you with promotional offers.

“Consumers will be able to receive personalized rewards when they’re away from home such as coupons and special geo-based offers,” said MasterCard in an infographic. “This means getting access to deals and discounts that matter most to you, whether you’re in London or Los Angeles.”

For example, if you pass a participating store or restaurant on Hollywood Boulevard with your smartphone turned on, that merchant can ping your phone with a coupon to try to lure you in.

A merchant may also be able to tailor an offer based on your specific preferences using information that’s been gleaned from your location data and other sources.

A hot and controversial topic
The fact that MasterCard is developing a service designed to entice cardholders into disclosing where they go is interesting — not just because of the cutting-edge technology involved.

Using cellphone geolocation technology to tailor offers is frequently touted as the “next big thing” for marketers and the companies that work with them. So it’s no surprise that one of the world’s biggest card networks wants in as well.

As MasterCard noted in its press release, businesses that work with retailers on mobile offers can potentially boost profits targeting people with location-based offers. “A research report for Syniverse from economists at SEEC uncovered a market value of as much $44 billion for operators providing services to brands based on opted-in mobile subscribers’ information, behavior and location — known as mobile context,” said MasterCard in the release.

Brands have been researching and experimenting with geolocation-based technology for a while, and experts say that targeted offers based on where you take your phone are likely to become even more common with time.

That could spark some heated discussions about consumer privacy — particularly since many people are just now beginning to realize how much of their private information is collected and shared.

The good news for those who want to protect their privacy from third parties is that MasterCard’s geolocation-based service will be opt-in only. So if you don’t like sharing your location details, you don’t have to sign up.

With that said, it’s clear that MasterCard is betting many cardholders won’t mind trading in a little more of their privacy in exchange for more security and shopping deals.

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