Times...they are'a changing. In the past, telemarketers would call and try to get us to "buy" something. Now there's a group who wants to call you AFTER you "buy" something. Actually they plan to send an SMS to cellular phones or PDA's everytime a credit/debit/ATM card is registered with them and subsequently used for a transaction. They are essentially pitching what they have to offer as a Value Added Service Provider, (VASP) Rather than selling "ring tones", they are, instead, trying to "cell" notifications of credit/debit/ATM card use. Initially it sounds like it has a ring to it, but I don't know what to think of this idea quite yet.What I do know is that the iPhone's OS has a security hole which can expose private information. (The flaw being a simple two-step trick which can be accessed directly from the iPhone's password protected interface, gives full access to a user's contact list, e-mail and text messages, including access to all SMS's.) see: Huge Security Flaw Puts All Private Information At Risk - Gizmodo
The other question I would pose, in order to determine the viability of the idea would be how much each SMS would cost the end-user. If it costs, for example 50 cents for each transaction notification, a $25 transaction would have effectively, a 2% discount rate. Here's a tip...for that money, banks could offer a "Transaction Insurance Protection Plan" (see, I told you I'd give them a TIPP...) Here's there press release:
MIAMI, Aug. 28 FL-CNSC-Debit Security Aug. 28 /PRNewswire
Ivan Ochoa and Daniel Davila, executive members of the newly-created company C.N.S.C. (Charge Notification Services Corp.) are launching their proprietary and patented credit, debit card and ATM transaction security service in the United States.
The premise of the C.N.S.C. service is to put the cardholders in control of their own identity security by instantly advising them via SMS (Short Message Service) to their cellular telephones or PDAs each time a charge or withdrawal from a C.N.S.C. covered card is made.
With the proliferation of cellular phones, this service is expected to reduce credit and debit card fraud significantly for individuals or companies who choose the coverage. Credit card fraud in the United States has increased in terms of total losses and is expected to continue growing, according to studies conducted byThe Nilson Report.
A Cybersource report indicates the same escalating trend ine-commerce transactions, surpassing the two billion dollar mark for 2007. Those affected by fraudulent activity include the card user, who may spend months trying to clear up an unauthorized transaction; the financial institution issuing the credit or debit card, as each time a fraudulent transaction is detected several time-consuming steps must be taken by staff, making it an expensive proposition for banks and issuers; and ultimately by the merchant accepting the fraudulent charge, as in most cases, the charge-backs are a direct loss to them. "The result of this is that society at large loses, even those who do not use credit or debit cards, since it makes every product and service more expensive. It is a zero sum game in which those who operate within the law lose out," stated C.N.S.C., E.V.P. and Chief Operations Officer Daniel Davila.
Referring to the most recent large-scale credit card fraud cases, C.N.S.C.Chief Executive Officer Ivan Ochoa comments: "We know that merchants have been slow to advise cardholders of fraudulent activity and that despite the existing firewalls and algorithms developed to detect abnormal usage patterns,the technology exists that allows criminals to access card numbers, as well as social security and drivers license information. Fraud has become everyone's problem, and consequently, everyone's responsibility. We are confident that with a minimal investment on the part of card issuers and the cooperation of cardholders, we can overcome this pernicious social and economic predicament affecting us all."
Messrs. Ochoa and Davila have a combined five decades of experience in the financial services industry. Mr. Davila's background includes 16 years at American Express where he was a Senior Director within the Global Network Services (GNS/Franchise) division and more recently, two years as Vice President and Chief Risk Officer of the credit card division at Russian Standard Bank (RSB) in Moscow. While at RSB, Mr. Davila launched a similar SMS credit card fraud protection service with great success, resulting in an overall significant reduction of fraudulent transactions. Mr. Ochoa's 25 years in the financial services industry include executive positions within American Express and MasterCard International, where he was Chief of Staff for Latin American countries. His areas of expertise include managing operationsfor multi-markets, re-engineering, quality control and technology. Mr. Ochoahas lead major innovative developments in products and systems.
SOURCE Charge Notification Services Corp.
