Not so fast...

Martin, lots of people are already, in principle, doing what you suggest - i.e. they are updating their location via their [typically] smart phone. Allowing organisations such as banks and card providers access to your location, when you choose to allow it, can be done either directly (e.g. "Check In" via a mobile banking app or equivalent), or via "Social" (think foursquare, or Facebook Places - where you privately share your location directly). The advantage of using a social mechanism, or a standalone "location" app, is that you can potentially notify all those organisations that need to know with one single check-in (having previously approved their access to that information). If your bank was going to decline based upon your location, it could then decide to approve the transaction because it "knows" that you are currently within a suitable range of where you are trying to perform the payment. Not just in the US, but down to street-level.

If your bank does not offer this service, ask them why not!

@MartinB:

According to this Finextra article titled Misys taps social media location information for bank-to-customer payment authorisation, there's an app for that! Besides, Google Wallet or any other mobile wallet should support this usage scenario. 

PS: Just curious to know why your bank's calls to you reached your wife and not your smartphone directly when you were in Las Vegas. If it was because your smartphone is not enabled for international roaming or you were using a different SIM card while in the USA, then I doubt whether any of these mobile apps will work either. In most LBS apps we've developed, our customers have insisted that the source should be authenticated by mobile number. In all likelihood, requests from a phone with a different # will fail.

Martin, I completely understand your frustration and you are absolutely right about finding a better way of verifying a transaction abroad. No doubt, many more bank holiday-makers will experience the same card declines when they’re away! The good news is, there is a solution similar to the one you’ve described. Proximity Correlation Logic (PCL) is a technology that works in real time and is far more accurate than transaction history, which often results in false-positive declines like the ones you experienced. PCL works on the basis that you are likely to have a mobile phone near you when you are making a payment. It can detect that your mobile is in the vicinity of the POS device or ATM without compromising on your privacy because it’s not a Location Based Service. The security system could even call your mobile so you can verify the transaction as an extra layer of security.

Ketharamen - users really are switching to local SIMs because of the EXHORBITANT roaming costs charged by operators; this truly is a flawed system, broken by the mobile operators themselves.  And the regulators who refuse to force them to get realistic about inter-network termination charges.  Its nearly as rigid as banking.

Thanks for your comments.

The card companies got through to my wife because I was in the Apple store at circa 6PM Vegas time and I as I said - the fraud department doesn't wake up until 9AM UK time. At that time - I had switched my phone off to get a good night's sleep.

Thanks also for all the suggestions about various point / niche solutions. If any of my card operators have these technologies - they are not telling me about them. I would welcome a more industry wide approach.

By the way - I can make a paypal payment from anywhere. We could do with someone upsetting the oligopoly of Mastercard / Visa / Amex.

@MartinB:

Not so fast...

Up until 10 years ago, even the so-called oligopoly of MasterCard / Visa / AmEx would have permitted you to do exactly what PayPal permits you to do today: Avoid using any realtime fraud detection and prevention screens, permit every card transaction to go through as long it doesn't bust the credit limit, slap the merchant with chargeback if there's the slightest whiff of fraud later on.

Later, the oligopoly - but not PayPal - implemented fraud detection, then fraud detection and prevention, solutions to restore a balance between the rights and privileges of consumers and merchants. (Which is perhaps why millions of physical stores accept the oligopoly's credit cards today but don't accept PayPal). Unfortunately, with additional layers of security, friction increases and most of these systems are beset with false positives, of which your situation is a classic example. Systems that try to resolve these false positives manually / automatically fail if people use different SIMs from their registered mobile phone numbers to avoid exorbitant international roaming charges. Others that try to do so by requiring manual intervention won't work if the call for action arrives when people are asleep.  

I think realtime fraud detection and prevention of card transactions is a Holy Grail that has still not been cracked. But, PayPal is not the solution either. For now, I'm now convinced that the most optimal solution is 2-way SMS Alerts that almost always allow the transaction to go through but provide a simple way for the cardholder to flag it off as a fraud either in realtime or few hours later. Banks in India have implemented 1-way Realtime SMS Alerts that at least half way to the optimum solution. I've written about both types of alerts in my Finextra blog post How Banks Can Differentiate By Going The Extra Mile - Part 2. But, even they will fail if people use a different SIM while traveling abroad.  

PS: Since you've brought up PayPal in the context of a physical store, I'm curious to know if Apple Store accepts PayPal and where all you've managed to use PayPal in a card present situation so far. Apart from a few pilots in Home Depot stores, I haven't even come across any physical store accepting PayPal.