Operator Innovation: Why can’t my mobile operator talk to my bank when my card declines abroad?

I was going to call this series, “Why operators are shit,” but I have decided to try and adopt a more positive tone with the site. It’s just too easy and far too accurate to call our mobile operators ‘shit’. Too easy. Too accurate.

I’m not bothering with names at the moment though. I wanted to get stuck in.

This series focuses on changes and enhancements I’d like to see mobile operators make. Today I’m writing about card transactions when I’m abroad.

Here’s the problem overview: I’m sure you’re familiar with it.

A few weeks ago I got off the plane in Austin, Texas, and hopped in a cab to the downtown Radisson Hotel. I arrived at reception about 20 minutes later and presented both my passport and my Natwest credit card. Having been out of the country for about half the year on business, I’m an old hand at this. I don’t even wait to be asked. I get the card and the passport ready just before I approach the desk. In many hotels now, the receptionist will simply swipe the card without bothering to ask now. It’s how things work.

But, there’s a fundamental problem for me — and, I’m sure, you — when I’m traveling.

Despite the fact that my credit record clearly shows me going all over America, France, Germany on a routine basis, 9 out of 10 times, my credit card ‘swipe’ fails.

I’ve already checked the balance on the Natwest app in the taxi to check there are no surprises. But when that ‘swipe’ fails (on a valid card with plenty of credit), a little mobile operator fairy dies.

That’s because the mobile operator knows where I am. It knows that I’m in America. It knows I’m Austin. In fact, it can probably infer with a bit of LBS jiggery-pokery, that I am *at* the Radisson hotel.

That information is sitting in the big dark ‘orrible mobile operator cloud. Locked away.

Marry this with the clueless bank fraud detection system and, goodness me, it’s a flipping depressing experience, it really is.

All I want to do is check-in. All the receptionist wants to do is for my card to swipe properly. The bank’s fraud systems — or perhaps, Visa’s systems — I don’t know and I REALLY DON’T CARE — trip up over this unexpected behaviour. This is perfectly fine. I understand the need for these kinds of systems.

What is COMPLETELY INEXCUSABLE is the total lack of innovation in this business segment.

Natwest will tell you that you ‘need to advise them’ when you go abroad. Bollocks. Utter flipping rubbish. I am not — repeat NOT — going to phone the bank and tell them where I’m going. I’ve done it. I’ve tried this. It’s a flipping con, it really is. The nice lady on the phone sounds incredibly professional whilst she lists down the dates and locations as I read them off my itinerary.

I know — and she probably knows — that this information is all but pointless. It doesn’t get integrated into the automatic fraud system. I’ve tried it. I’ve tried phoning up and giving the information like a flipping idiot. How stupidly inefficient is this? I’ve given them the dates. I’ve given them the locations. And the card is still ‘marked’ or declined or — well, I really don’t care except for the fact I can’t get my hotel room key.

One time, when I’d actually called to say I was going abroad, my card was declined. I phoned up — luckily there’s 24/7 access for my account — and the chap said, “Oh yes, I see from your record that you’re traveling to the United States Mr MacLeod?”

“Yes, I’m in San Francisco,” I said.

“Right, yes,” he replies, “I see that here in the notes.”

I take a breath.

“Ok, so why is my card blocked?”

“Ah well it’s just a routine blah-de-blah-de-blah.”

And then I get transferred and go through the flipping rigmarole of confirming transactions. All at a gorgeous £1.25 per minute international call.

£20 later the card is ready to be used.

Back at the Radisson, I gave them another card — the HSBC Business Card. That was declined too, despite the ton of credit available. Finally one of my other cards — you know the one in the bottom of the wallet that you forget about? — that one worked. Despite the fact I hardly EVER use it. So much for ‘fraud detection’.

I know all institutions are different. But the experience is broadly the same, isn’t it?

I got so annoyed and so frustrated with this stupid, stupid arrangement that I got one of those ‘cash cards’ from Lloyds Bank. You charge it up with up to $3,000 and boom — it’s there to spend. It works everywhere. It’s like a pay-as-you-go credit card. I was delighted with this. I used it all the time because it never got declined.

Until one day when they ‘detected unusual activity’. I spent about £50 on the phone walking up and down University Avenue in Palo Alto trying to get them to unlock the card. They eventually managed it. I promptly withdrew the whole balance as cash and never used it again. Arses.

Now.

Let’s get to the point of this post. The mobile operator is to blame here.

Show me a virtually full-proof manner of determining whether I am present during a transaction? Yeah. Location-based services from your mobile operator.

Why haven’t the mobile operators jumped into the breach? Why can’t I authorise Vodafone to provide my bank(s) with real-time location lookups for in-person transactions?

Why isn’t this a service that Vodafone offer? Why haven’t some sharp Vodafone chaps put on some sharp suits and popped down to the Square Mile to have a sensible conversation with some High Street banks?

Why haven’t High Street banks done the opposite?

You know, there’s a revenue model here. I could imagine a Bank agreeing to pay a fee-per-lookup. Or a fixed fee per month to be able to query customer locations as part of their fraud systems — all subject, of course, to the proper data protection opt-in stuff.

If your bank told you that you could be virtually assured of having ALL your foreign transactions be processed instantly — and that all you have to do is ‘click here’ to agree that Vodafone can provide this information — we’d all be doing it.

There is NOTHING WORSE than standing in a queue at Starbucks in San Francisco (and those queues do get veerrrrry long) and having your flipping card decline for some mundane fraud reason.

I could imagine Vodafone charging an extra £1 per month to me for the privilege. Some kind of financial-location-assurance charge. I’d stump up for that.

Indeed I’d be happy for Vodafone to act as my trusted location broker, offering the data to services on-demand and anonymised as necessary for banks, insurance and other such purposes.

But no.

The operators are NOT doing this, are they?

Of course not. They’re too staring into the abyss of irrelevance.

Because, dear reader, here’s a rather annoying problem for Vodafone [For ‘Vodafone’, by the way, read, ‘your operator’ — they’re all as bad as each other in this context]. The problem is called OTT.

Over-the-top. It’s the phrase being bandied around often now. It means, effectively, cutting out the lumbering irrelevance that is the mobile operator.

The operator COULD do this.

But they haven’t.

I need the service.

Natwest needs the facility too. They need to limit and assure their fraud processes. It’s in their interests to keep everyone happy and the fraudsters out.

This OTT issue is painful. Really painful.

You see Natwest already has a mobile application. It’s provided by Monetise and they’ve recently upgraded it to make it look and function half decently. (The first version was an abomination, it really was). This application runs on my phone. Monetise has physically verified my identity prior to letting me use the app. I wasn’t able to run the app until I received a special PIN code through the sodding post. Fair enough but incredibly annoying.

Still. The app is as secure as a consumer banking app needs to be. It even has a PIN number that is requested every time the app runs.

I use it a few times daily when I’m abroad.

And now let’s get to the science bit.

The app is location aware. Well, it can be. Oh, I don’t think Monetise has done anything about it yet — but the fact the app is running on an iPhone means that my precise location is available to the app with just a function call.

It wouldn’t be too much of a stretch of imagination for Monetise to walk into their next meeting with Natwest and ask for £20m to deliver an enhanced upgrade to the consumer banking app that integrates directly with the Natwest fraud protection engine, would it?

Provided I’ve run the application and verified my physical location — and, of course, provided I’ve got sufficient avialable credit — the Natwest Fraud system should approve any transactions that take place AT my location within 30 minutes.

That works.

That’s communicable to customers.

Run the app when you get to the hotel. Just by running it, you verify your location. That will help ‘us’ (the bank) automatically approve any transactions you make from that location/venue.

You could even physically check-in to the location. When I was waiting for a receptionist to become available, I fired up Facebook and ‘checked-in’ to the Radisson.

My concern is that I could easily see Monetise or the banks building this into their application strategy. This would render the mobile operator useless. Just another example where this is happening.

Critics will, I’m sure, point out that Vodafone doesn’t know where I am when I’m roaming on AT&T or T-Mobile in the States. This is true. But Vodafone can easily request it. The guys int he roaming team will have a fit because it upsets the applecart, but it’s totally and easily doable.

Now then: There’s a lot of holes in this example — but, broadly speaking, it’s possible. It’s doable. It’s adding value, it’s helping everyone have a better day.

Will the operator do anything about this? No. I doubt it.

Will banks do so? I reckon some of the more enterprising ones might do so.

I’d switch operator for this function.

I’d switch banks for this function.

ANYTHING that stops the ‘sorry sir, that card doesn’t work’ experience. Anything.

What do you reckon?

Update: Sam Machin of The Lab at o2 comments: “Watch this space”. Interesting.

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  • Anonymous

    Great article Ewan, a little subtle and reserved, but the general theme is totally justified, and on the face of it DOES look like a very easily ‘doable’ process for the carriers and banks to sort out 🙂

  • Anonymous

    Great article Ewan, a little subtle and reserved, but the general theme is totally justified, and on the face of it DOES look like a very easily ‘doable’ process for the carriers and banks to sort out 🙂

  • Oh that’s good feedback, thank you!

  • What about the operators actually going out and engaging with banks?

  • gc

    Well the first step in that process is for the operator to have a way to provide access to this data. The Parlay-X standards have been around since 2003 ensuring this data was easily available. It is remarkable the operators haven’t found a way to market exposed APIs and a process to monetise each call made to it (do the UK operators want to?).

  • BlueVia (www.bluevia.com) from Telefonica is one option — however it’s only
    currently configured to expose location when the customer is IN the country
    as far as I’m aware. It’s all doable though. It’s just a case of knocking
    out the API.

  • Anonymous

    We pitched this idea to two credit card companies last year with no success. Largely I think because the people we deal within marketing departments don’t see this as a significant problem for them – they are focused on acquiring new customers rather than making the service less annoying for existing ones.
    Having spent 3 years schlepping around the world for WPP I know how annoying this is and I do think there is a positive business benefit – I’d always use the card that is less likely to be declined

  • Simon, super feedback. Do you think the attitudes of credit card
    companies are likely to change any time soon?

  • Yes – because it’s a real problem and someone somewhere in Amex/Mastercard/visa wants to minimise fraud and reduce customer dissatisfaction. If your card is cloned then no-one knows until the fraud starts – but the presence of the phone in the same location drastically reduces the chance of a purchase being fraud – so the next evolution of the service is for Visa to be able to look at Ewan buying something in Hong Kong and – knowing ihis phone is in London, having the merchant retain the card.
    We just have to find the right people at the Banks

  • I wonder if I could do that. I might give that a shot and see if their
    PR teams could help.

  • Philjohnson

    I think it will help when other countries roll-out Chip & PIN (EMV) as this will provide the banks with more confidence that it is you, the cardholder, making the payment.  At the moment, a large proportion of UK card fraud is done using the stolen / cloned card abroad where the security is weaker.  The technology is there now ready to go – it’s just that it costs retailers money to replace all of their card swipe terminals with the C&P ones.

  • Meanwhile it’s my problem? 😉

    It’s me who has to do the 20 quid calls each time to the bank to verify that
    I am not using a cloned card at the Radisson? 😉

  • well we’d be very happy to help develop the service 😉

  • Simon, for anyone reading, can you put up a URL. You never know, you might
    get a call from Natwest…!

  • Ewan, I have worked in card fraud prevention for over 20 years, mostly in the US, and on behalf of the entire industry, I apologize for this massive inconvenience. Essentially, the problem is that your bank

    knows where your card is but they cannot be certain that you are with it. Fundamentally this is more of an identity problem (verification) than fraud problem. You are not alone in wishing that innovation would happen faster in an industry (banking, specifically) where customers just expect their cards to work, especially when they need them most.  

    A venture capital-backed startup I co-founded (www.finsphere.com) is in the thick of trying to solve this problem. We are trying to bridge the very groups you speak of, namely the mobile network operators and the financial institutions. Our technology helps these parties address the underlying problem (proving that the person using a financial product is actually their customer) and then develop products that can be deployed that will drastically reduce fraud, greatly improve the customer experience, and bring some real innovation to the market.

    We recently launched a product in the US (www.pinpoint-fraud.com) that is basically a scaled down version of the technology we sell to mobile network operators and banks. The launch went very well and we’re excited to bring this technology to the EU market soon. 
    Just wanted to let you know that your frustration is shared by many and that there are some folks out there trying to make a change. Good luck in your travels and thank you for sharing your point of view!
    – Robert

  • Yeah it doesn’t have to be active all the time, just when you actually need it. You could just fire up an app to activate it when you’re at the hotel ready to check in.

  • SO true! This happens to me all the time. It’s annoying, and can be embarrassing. 
    Phoning the bank never works for me, their reaction is normally “yeah, so, you’re going abroad – so what? Why are you telling us?”  Mobile operators could well be the answer.

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