Lemon Inc. is working with BillGuard, which provides a transaction monitoring service, to boost its mobile wallet's security and perhaps also boost the wallet's appeal among consumers.

Lemon's wallet allows consumers to upload payment and loyalty card data by scanning physical cards with a smartphone's camera. Users can then access their account details as text or a two-dimensional bar code. Typically, two of each Lemon user's cards are payment cards, and BillGuard 's service offers free credit and debit card monitoring for up to three card accounts.

“We’re providing services that make looking at a card in our wallet more valuable than looking at the dumb plastic card in a regular wallet,” says Wences Casares, founder and CEO of Lemon. BillGuard's service “leverages wisdom of the crowds to find bad charges and handle them immediately,” he says.

When users access a card in Lemon's mobile wallet, the app offers to turn on BillGuard's protection. Users that agree to use BillGuard's service must then enter their online account credentials to allow BillGuard to access and review their statements to find unwelcome charges.

With the help of BillGuard’s online marketplace, where consumers complain about devious charges from merchants, BillGuard says it has saved customers more than $1 million in deceptive charges and hidden fees. BillGuard defends its customers by contacting merchants themselves to speak on behalf of the consumers.

“Leveraging its crowdsourced transaction analytics and notification engine, BillGuard brings a new layer of personal finance protection that does not exist anywhere in the marketplace today,” says Mary Anne Keegan, chief marketing officer at BillGuard.

BillGuard also offers a version of its service for Apple Inc.'s Passbook, a similar card-storage app that Apple installs alongside the latest version of its iOS mobile operating system. BillGuard's Passbook version offers more transaction detail, but the Lemon app has features that make it “a more robust digital wallet,” Keegan says.

Dave Kaminsky, an analyst with Mercator Advisory Group, says the partnership between Lemon and BillGuard will be beneficial at expanding both companies' consumer base.

The partnership also offers an incentive for consumers worried about the security of digital wallets, he says.

“The biggest risk with security isn’t whether digital and mobile wallets are secure — they are,” Kaminsky says. “It’s getting consumers to think the technology is secure.”

Kaminsky likens BillGuard to the a spam filtering program for email. Spam filters, like BillGuard's system, rely on an online community to warn of suspicious behavior.

“The adoption of new technology tends to be slow, especially in cases where security is a concern, such as financial transactions,” he says. “It’s a benefit if you can convince consumers that security is a primary concern and something they don’t need to worry about because you’ve already got it taken care of.”

As consumers turn to more mobile technology to make payments, there are more opportunities for deceptive charges, billing errors and fraud, Keegan says.

“For any digital wallet to gain marketplace traction it has to be easy to use, accepted everywhere and most importantly secure,” Keegan says. “As digital wallets bring increased conveniences to consumers, there is a need to re-think and re-engineer digital card protection, an area where BillGuard felt it could add tremendous value.”

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