Evan Schuman's StorefrontBacktalk

But that would just be the start of the thieves’ work. For example, ValidSoft says it can confirm a mobile phone’s location in less than half a second. That means timing would have to be very tight for a thief who is trying to fake the phone’s location. If the service that is providing mobile location switched to checking the phone’s location multiple times in short order, thieves would have to use even more complicated techniques, and they’d no longer have surprise on their side.

If all that sounds like doing it the hard way—well, yes, it is. A security vendor’s systems aren’t usually the softest spots to target in an attack.

It would be much easier for a thief to make geolocation-based security practically useless just by generating phantom phones. It would still require the thief to know information about the mobile phone number associated with the payment card. But cloning a phone could be much easier than breaking through a security vendor’s security.

If a ring of thieves set up a network of sites throughout the U.S. or Europe to act as bogus phones—and also put a cloned phone in the pocket of a thief using a stolen payment card—the mobile carrier wouldn’t just register one location for the phone. It could appear to be in a dozen locations at once.

Then, when that information was passed to the location-based security vendor, it would be useless. Is that particular phone really in Denver, Detroit, Duluth or Des Moines? Can the vendor afford to ignore the false positives? How irritated will cardholders be if they’re legitimately trying to use their payment cards and those cards are rejected? How long will it be before store associates start to routinely override those security alerts?

Once that happens, any security scheme that depends on the location of a cardholder’s mobile phone is useless.

Sure, that phone-cloning approach would require plenty of technical sophistication and a certain amount of coordination. But it’s doable, and it doesn’t require an undetected break-in to a mobile carrier or a security company. As points of attack go, it’s a pretty soft spot.

Of course, that doesn’t mean it’s a bad idea for Visa Europe to add mobile location to its security arsenal. Mobile location plus Chip-and-PIN plus signature verification starts to look like a healthy, multi-factor approach to cardholder authentication.

Just don’t assume that mobile location will do the job all by itself.