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Is MasterCard's fraud program just another data grab?

Evan Schuman | March 12, 2014
It offers slightly greater payment convenience, but at what cost?

But even if MasterCard were narrowing your phone's location down to a city, a neighborhood or a specific street, this isn't a foolproof approach. Say that you keep both your MasterCard and your phone in a purse or a backpack and then that purse or backpack is stolen. There go your credit card and your phone, always together in the shops the thief visits.

After talking in their Mobile World Congress press release about how this service would "enhance peace of mind for mobile users when they are traveling abroad," MasterCard and Syniverse eventually made a point that might explain what really lies behind this initiative: "Mobile network operators and brands can also benefit from the collaboration between MasterCard and Syniverse. In the future, they could implement targeted offers, which will be made more relevant by knowing the location of a mobile device, for example in close proximity to a retail store. A research report for Syniverse from economists at SEEC uncovered a market valued of as much as $44 billion for operators providing services to brands based on opted-in mobile subscribers' information, behavior and location -- known as mobile context."

So, yes, back to that question of how to get consumers to opt in. In this regard, MasterCard and Syniverse have some work to do. They have yet to agree on a privacy policy, according to Davlouros and Syniverse chief marketing officer Mary Clark. In other words, they haven't figured out what they want consumers to sign away.

Will the data only be used for authentication? Can marketing see where shoppers are going? Can special offers be texted to shoppers based on those movement patterns? Will the data only be used aggregated and anonymously? And do third parties get to see those aggregated -- and perhaps not aggregated -- patterns?

I don't think it bodes well for users' privacy when companies proceed to a trial without answering any of those questions. When geolocation is involved, privacy can't be treated as an afterthought. My cynical side wants to say that these execs know exactly how far they want to go, but they're not ready to say. Why announce it when a little-read, small-type privacy policy can do it instead?

To be fair, what the two partners are trying to do is extremely complicated. They need to coordinate information as consumers bounce from one carrier to another in various countries, as well as disappear entirely while in flight. Not every store or street in every country has consistently reliable wireless access, whether Wi-Fi or over-the-air. And although the goal is to have agreements with as many carriers and related companies as possible, it's going to take some time to get there, and in the meantime, the telecom patchwork will have many holes in it. Another issue is that legal standards differ from country to country and province to province. "Different countries have different regulations about privacy," MasterCard's Davlouros said.


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