Secure Identity Systems thinks it can reduce credit and debit card fraud and identity theft with Mconfirm, software for banks that compares the location of a transaction with the physical location of a consumer's cell phone. If they don't match, the transaction is denied.

The company said the Mconfirm software would be deployed by banks on their servers and administration terminals where IT staff monitor and respond to risk alerts. After a card gets swiped, the bank extracts the card terminal's location from the transaction data. Then Mconfirm logs on to the consumer's wireless phone network and compares its current location with that of the card terminal, which then generates a rating based on proximity.

"The further apart they are, the higher the rating, indicating that the transaction is at higher risk for fraud," Secure Identity Systems said in a statement. The bank can then deny the transaction.

In addition, Mconfirm analyzes the cardholder's usage history and compares the current transaction against that history. The company said cardholder privacy is guaranteed, since it's only using information the bank already has.

The protection capability is free to consumers; banks will pay a "nominal" initiation fee, plus an ongoing charge based on their size or number of cardholders, said Secure Identity Systems president Bryan Ansley. He declined to be more specific with actual costs or even provide a range, but did note that banks that choose to participate in upcoming trials would receive some kind of discount.

The system works with domestic wireless networks and some of the most popular commercially available cell phones, including Apple iPhone, LG, Motorola, Nokia, RIM BlackBerry, Samsung, and prepaid services. Users need not have phones that are equipped with GPS location devices or services, Secure Identity Systems added. The handset location is determined by an automated call to the mobile service provider, the vendor said.