Fiserv announced today the launch of CardValet, a cardholderaccount control application that operates through cardholders’ mobilephone. The ultimate benefits of theapplication are increased cardholder engagement and reduced fraud throughcontrol over the authorization of debit and credit card use. The “on/off” controls also include spendinglimits on total transactions during a specified period, or spending that onspecific transactions that exceed predetermined thresholds, merchant categorycontrols, and an array of alerts based on violations of the controls that consumersset on their account. There alerts mightpinpoint potential situations of fraud.
Cardholder account controls first appeared in the market afew years back, but most consumers and issuers saw little need for thiscapability until the data breaches of 2014. The service was actually developed and market tested prior to 2014, but wasperceived as a “must have” application for many consumers in 2014. Based on Mercator’s CMSS Studies in 2014,over 40% of debit and credit cardholders are “seriously interested incardholder account controls.”
“Mobile cardholder accountcontrols, a new best practice in card management, empowers consumers to helpprotect their payment card from fraudulent or unapproved use through a simplemobile phone app,” said Ron Mazursky, Director of the Debit Advisory Service atMercator Advisory Group. “These apps are also reducing payment card call centervolume by enabling consumers to turn on or off card authorization rather thancalling into their financial institution for assistance.”
We have seen metrics that point out the strength of cardholderaccount controls on portfolio performance. These metrics indicate improved (reduced) fraud, increased usage ofcards with this functionality implemented, increased retention of accounts andhave heard reports of reduced call center volume where cardholder accountcontrols have been implemented.
Ultimately it is the consumer that will decide the value ofcardholder account controls in terms of his attitude and ultimately hisbehavior with these controls and the debit or credit card with this featureimplemented. It is this analyst’sopinion that this application will become a must have on card portfolios overthe next 18-24 months. Fiserv has movedquickly in terms of adoption and roll-out of this service to its issuingpartners and I would expect this will serve them well in terms of meetingcurrent issuer and prospective issuer needs. Only a small number of processors have announced cardholder accountcontrols to their issuing partners.
Overview by Ron Mazursky, Director, Debit Advisory Service for Mercator Advisory Group
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