Mastercard also launched a new app, MasterPass, designed for making in-app purchases through your phone. Marce Martinez/AP Images for MasterCard
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Mastercard uses phone location tech to help prevent credit card fraud

The pilot service uses your phone’s location to verify purchases done by credit card when you’re abroad.

MASTERCARD IS TESTING out a new service to help protect purchases made on credit cards abroad by using your smartphone’s location.

The service, which is in pilot mode and requires cardholders to opt-in, will only allow card transactions when users have their smartphone switched on in that general location.

The idea is if you’re in Dublin and someone tries to use your card in London, the transaction would be rejected since it knows you’re not in the same location.

The aim is to help reduce fraud and help credit card companies make faster decisions. Said companies can check the location of your smartphone to see if you’re in the same place as your card, and approve or reject a transaction using that information.

Mastercard is considering offering prepaid data packages as well which phones users can purchase when they arrive at their destination. It sees this as an opportunity to allow businesses and mobile networks to provide targeted offers and coupons to those using the service.

The service is being developed by both Mastercard and telecommunications service company Syniverse, but neither company has said when they plan to make it available.

Read: After 18 years, wave goodbye to Laser cards >

Read: Anti-fraud startup does away with bills (at least for ID purposes) >

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