A shopper in a department store decides to buy an expensive handbag. But when she hands her credit card to a sales associate to swipe, the shopper’s bank detects the purchase is for a suspiciously high amount. The shopper’s mobile service provider immediately initiates a request to verify the card user’s mobile location. This information is in turn shared with the card company’s fraud engine and the transaction is cleared to be processed -- all without ever inconveniencing the shopper.
This scenario is just one example of how location-based services can help consumers -- in this case, by balancing fraud protection with convenience. When consumers don’t have to endure the embarrassment and annoyance of having their card unnecessarily declined, merchants benefit because sales aren't lost, and sales associates don’t have to go through the stress of dealing with an irate customer.
Just as important, these kinds of location-based services operate behind the scenes. Aside from the initial confirmation when end users agree to opt in to sharing their location, they have no further interaction with the platform and are largely unaware of how, or even when, these services are determining their location.
Although a variety of location-based services have been available for nearly a decade, widespread use has only recently started to take off, due to the popularity of GPS enabled smartphone apps. An emerging alternative process known as the “network-based method” promises to gain even faster adoption because it enables financial institutions, merchants and other businesses to support a larger base of customers. And with mobile penetration at 100 percent in the US and many other developed countries, this approach essentially extends to every consumer, including those on non-smart devices.