In an earlier blog entry I wrote that MFS needs to be more than an alternative channel for traditional banking services to get traction in the developed world.

In the same vein I saw an article this morning  (http://mobile-financial.com/node/1741/Mobile-Phone-Location-Technology-Fights-Card-Fraud) talking about an Ericsson solution that provides country lookup services for banks to establish that a particular mobile device is roaming in a particular (and perhaps high fraud risk) country.

The idea being of course that if the mobile devices was linked to the credit card and a credit card transaction was initiated in a high risk country then the credit card provider could use the capabilities to verify that the mobile phone associated with that account (and by extension the owner of the card themselves) was actually located in the foreign country.

This strikes me as being a great example of how mobile banking solution can actually add value to transaction that is not possible by conventional channels.

One could take this scenario further and use the same technique on a far more granular scale - modern cellular networks provide location based services API's that allow (authorised) 3rd parties to locate an end-user device with varying degrees of accuracy.

Financial instiitutions wanting to reduce fraud could go into cooperation with cellular operators in a country to perform a location verification ensuring the mobile phone associated with a credit card account is within a prescribed geo-distance of the merchant terminal for every transaction. 

Such a scheme could be marketed to end-users as a higher security service and funded from reduced fraud or some form of joint marketing funds from the mobile operator and bank.

End-users would just need to ensure that they don't get their phone and wallet stolen at the same time!

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Name: Mark Hannon Title: Manager Company: DonRiver View Mark Hannon's Blog