Visa Prevents Approximately $25 Billion in Fraud Using Artificial Intelligence

Since pioneering AI in payments, continuous evolution of the technology in Visa Advanced Authorization helps drive commerce and consumer confidence

SAN FRANCISCO–(BUSINESS WIRE)–Visa Inc. (NYSE: V) today announced new analysis showing Visa Advanced Authorization (VAA) using artificial intelligence (AI) helped financial institutions prevent an estimated $25 billion in annual fraud—making the global payment ecosystem safer for retailers and consumers.i VAA is a comprehensive risk management tool that monitors and evaluates transaction authorizations on the Visa global payment network, VisaNet, in real time to help financial institutions promptly identify and respond to emerging fraud patterns and trends. Visa processed more than 127 billion transactions between merchants and financial institutions on VisaNet last year, and employed AI to analyze 100 percent of the transactions—each in about one millisecond—so financial institutions can approve legitimate purchases while quickly identifying and preventing fraudulent transactions.

“One of the toughest challenges in payments is separating good transactions made by account holders from bad ones attempted by fraudsters without adding friction to the process,” said Melissa McSherry, senior vice president and global head of Data, Risk and Identity Products and Solutions, Visa. “Visa was the first payment network to apply neural network-based AI in 1993 to analyze the riskiness of transactions in real time, and the impact on fraud was immediate. By striking the right balance between human expertise and technology innovation, we continue to evolve our capabilities as new AI breakthroughs expand the realm of what’s possible.”

For financial institutions, friction in the payment process can lead to the abandonment of a payment card. A study by Javelin Strategy & Research revealed more than half of cardholders affected by false declines (51 percent) used a secondary payment card to complete the purchase at the same merchant, which can push a competitor’s card to the top of wallet.ii However, removing friction cannot come at the expense of identifying and preventing fraud. As a survey by the National Retail Federation and Forrester discovered, the top payment-related challenge faced by retailers is fraud, cited by 55 percent of those surveyed.

Visa Advanced Authorization is a layer of fraud prevention that can help drive down risk and fraud for financial institutions and retailers, and help reduce friction due to false declines for payment account holders. More than 8,000 financial institutions in 129 countries use Visa Advanced Authorization.

Preventing fraud near the speed of light

Visa pioneered using neural networks modeled after the human brain to power its AI platform to identify possible fraud. This delivers faster and deeper insights through previously unknown correlations. Delivered through Visa Advanced Authorization, retailers and financial institutions benefit from:
• Machine Learning models used for real-time examination of each transaction for indicators of fraud—looking at activities, patterns and more than 500 risk attributes—all in about one millisecond.
• Risk scoring, which Visa shares with the account holder’s financial institution, where the decision is made to either approve or decline the transaction, or flag the transactions for follow up with the account holder.
• The ability to identify good transactions even when made by new or infrequent shoppers, reducing the likelihood of false declines.
• Real-time authorization using integrated, global predictive analytics to identify and prevent fraud.
Visa has kept global fraud rates at historic lows—less than 0.1 percent—through a multi-layered approach of investing in human intelligence and technology like A.I.; empowering consumers and clients with tools, resources and control to manage risk; and setting governance processes to help businesses and regulators stay nimble.iv
“Consumers identified Visa as the most trusted company to provide financial services or payments among all payment networks and we believe it is due to Visa’s unrelenting focus on eliminating fraud and protecting the payment ecosystem,” said McSherry.v

Additional Risk Solutions Using AI
Visa champions security every day to protect the payment ecosystem and offers a portfolio of risk products and services that can help consumers, merchants and financial institutions prevent fraud. This includes Visa Risk Manager (VRM), Visa Consumer Authentication Services (VCAS) and CyberSource Decision Manager (DM), among others. For more information about Visa’s Risk solution portfolio, visit Visa Security.

Additional Resources

About Visa Inc.

Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network – enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of digital commerce on any device for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit About Visa,visa.com/blog and @VisaNews.

i For the 12 months ended April 30, 2019.

ii “Addressing the Threat of False Positive Declines” by Kyle Marchini and Al Pascual, Javelin Strategy & Research, October 17, 2018.

iii “The State of Retail Payments Report – Outlook for 2019” by Brendan Miller, principal analyst, Forrester, November 2018.

iv Visa Global Fraud Data, Visa Inc., April 2019.

v “Omnichannel and Branch: The Current U.S. Consumer Banking Environment,” by Peter Reville, Director of Primary Data, Mercator Advisory Group, March 2019.

Source: Visa Inc.

B2B Credit Card Processing Hot Tips

Compliance with credit card processing rules maximizes profits while mitigating risk. This is especially true for business to business companies. But it’s getting harder and harder with the onslaught of new rules, and virtually impossible if not using a sophisticated cloud solution to help manage compliance.

If your B2B company stores credit cards, there’s a pretty good chance you’re not compliant. For example, Visa’s 2017 Stored Credential Transaction framework outlines merchant responsibilities to obtain customer consent as well as storing credit cards, using stored credentials (token), and managing stored tokens. Failure to comply with Authorization rules, for example preauthorization and final settlement do not match, has far-reaching consequences including higher interchange rates (the bulk of credit card processing fees), penalty fees and new chargeback risks. With so many new rules across multiple card brands that vary based on business and transaction type how can a business quickly ascertain if they’re compliant?

Most processing details occur seamlessly behind the scenes so merchants have not had a simple way of knowing whether they’re compliant. Until now.

Quick tips to validate compliance:

  • Is a transaction receipt delivered to customer when a stored credit card credential (token) is created? Compliant answer is yes.
  • Is cardholder authentication with a zero dollar authorization or a purchase transaction performed at the time token is created? (A small charge is not an acceptable practice.) Compliant answer is yes.
  • Does the receipt include “RECURRING” or “REPEAT SALE” for token transactions? Compliant answer is yes.
  • Review merchant statements, usually the last 1-2 pages with the heading “pending interchange” or “fees” section. Do you see EIRF, STANDARD (STD), or DATA RATE I? Compliant answer is no.
  • Can you produce documentation of customer consent to store their card (including with 3rd party service) and how it will be used?

If you’re not in compliance, your payment gateway is the most likely culprit, followed by ERP or other software integration limitation. For a Microsoft Dynamics AX, Dynamics 365, and other ERP integrated solutions, call 954-942-0483 9-5 ET.

Reference: Card brand links.

Christine Speedy, CenPOS Sales 954-942-0483. CenPOS is a cloud business solutions provider with end-to-end payments engine that drives enterprise-class solutions for businesses, saving them time and money, while improving their customer engagement.

Mastercard Simplifies Managing Your Digital Footprint with Launch of Consumer Control

New solution will help the 60 percent of people who say they don’t know where their card credentials are stored

PURCHASE, N.Y. –October 23, 2017 – Do you know all the places you’ve stored your payment card details? From shopping sites to billers, keeping track of where your card credentials are held can be a daunting task. Today, Mastercard Consumer Control was introduced to address just this. The solution provides consumers a central view of where their cards are stored across all digital channels, as well as the ability to control how, when and where those cards are used.

This solution enables consumers to look no further than their own trusted bank or credit union to take control of their digital payment footprint – across devices and channels. Through this solution, issuers can help their cardholders more easily add their cards to their preferred shopping sites and payment devices, and optimize spend across the digital ecosystem.

“As digital payments continue to evolve, cardholders have more and more options to enable new types of devices for payment, and to pay in new ways online and in-app,” said Jessica Turner, executive vice president Digital Payments & Labs, Mastercard. “In our ongoing commitment to deliver consumer-centric solutions, Mastercard is introducing a series of APIs that will give the consumer direct control to view where their card is stored and manage spend across all digital channels – all from right within their mobile banking app or website.”

Your Bank Your Control

According to the findings of a recent Mastercard study, about three-quarters (73%) of Americans are interested in digital management of their credit/debit card information, and they want it from their bank or credit union. Mastercard Consumer Control uniquely empowers issuing partners to deliver a bank-branded, all-digital payment solution to provide consumers full oversight of their digital payment footprint. The solution helps issuers differentiate their mobile banking offering by adding powerful new functionalities. First Tech Federal Credit Union will be among the first issuers to support Mastercard Consumer Control.

The Simplest, Most Secure Path Forward

Mastercard is also partnering with token service providers, merchants and device manufacturers like Fitbit (NYSE: FIT), Fitpay and Garmin to enhance the overall consumer experience while delivering a streamlined solution across card on file and IoT devices. Layering services including tokenization with bank identification and verification of cardholders, Mastercard Consumer Control also leverages the most advanced security methods today. And with more than three quarters (78%) of survey respondents hesitant to store their financial information online, this added peace of mind is critical.

Consumer Control is one of the more than 35 APIs available through our Mastercard Developers portal. Mastercard envisions a future powered by an API for everything – one that inspires innovators to bring their ideas to life by plugging our technology into their solutions without having to start from scratch. Through our Payments, Data Services and Security APIs, we enable customers and partners to easily integrate Mastercard proprietary technology, products and services into their digital solutions. In the last year alone, the Mastercard API Platform has seen a 400% increase in usage.

About Mastercard

Mastercard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MastercardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news.

VISA FRAUD DISPUTE RULES CHANGES IMPACT CARD NOT PRESENT

April 5, 2017—This alert contains critical information regarding new and revised Visa card acceptance rules effective now and coming in the future for merchants. Business to business companies may be at higher risk of associated chargeback losses or declines due to the average size of order. Effective April 22, 2017, Revisions have been made to split the “Other Fraud” Dispute condition under Enhanced Dispute Resolution into separate conditions for Card-Present and Card-Absent Transactions, and to incorporate changes to the payment flow related to Disputes.

Christine’s Analysis: Merchants need to support both EMV chip for Card-Present and Verified by Visa for card not present. Verified by Visa is their brand for 3-D Secure, a global security protocol for cardholder authentication across all card brands. For example, a  cardholder might be asked to enter a PIN number or answer some other type of authentication question. Cardholder authentication for Card-Absent Transactions shifts liability for “it wasn’t me” disputes to the issuer. This card-absent cardholder authentication process requires cardholders self-initiate payments, eliminating collecting card numbers via phone or paper credit card authorization forms. Merchants are rewarded for using cardholder authentication with reduced interchange rates and increased approvals.

Christine’s TIP: Per Visa rule 5.4.2.5, a US merchant or its agent must not Request the Card Verification Value 2 data on any paper Order Form. Replace paper forms with digital, PCI Compliant forms and online payment solutions with cardholder authentication ASAP.

Online payment solutions include a hosted pay page like the one shown below.

hosted paypage online payments

A hosted pay page empowers customers to make secure payments online using a 3rd party provider (Payment Gateway also known as a Payment Facilitator.)

Other solutions include pushing out payment requests, such as via a text or email. electronic invoice presentment and payment eippWith new and revised rules impacting the entire payment ecosystem including issuer, acquirer, gateway, merchant, and potentially other software like ERP’s and ecommerce shopping carts, merchants should verify all parts their payment ecosystem supports them. Desktop terminals are not capable of supporting all the rules for card absent needs; a cloud-based payment gateway is required whether non-integrated, or integrated ecommerce shopping cart, ERP or other software.

Does your online payment solution support Verified by Visa, or do you need a solution? Contact Christine Speedy at 954-942-0483 for a fast and easy solution, compatible with your existing credit card processor.

EMV handbook for merchants by Verifone

emv guide verifone merchant terminalVerifone’s EMV handbook is a comprehensive guide for both retail and card not present merchants. It’s hardware agnostic and the Question and Answer section is especially useful.

Two questions on page 17 about hardware need to be read together. To clarify the liability shift going into effect October 1, the merchant’s hardware (terminal) needs to be more than capable of processing chip card transactions.  It needs to be certified on the processor platform and EMV must be enabled on the merchant account. This is an important distinction.

There may be thousands of terminals in use technically capable of accepting chip cards, but either the terminal is not yet certified for EMV chip card transactions, or the processor has not certified the terminal to their platform.

Beware purchasing terminals that will ‘get you ready’ to be EMV compliant. Will the seller guarantee the terminal will be certified for the acquirer platform you need? For example, acquirers usually have multiple platforms but not all merchants can switch between them. With the liability shift just weeks away, merchants wanting to be EMV compliant should not wait another minute:

  • Buy only EMV certified terminals acquirer confirms can be enabled.
  • Verify firmware and or software is current before buying
  • Request an EMV TID from acquirer
  • Download file, usually required for countertop terminals
  • Install new software driver, if applicable, for virtual terminals

Christine SpeedyThanks for reading! If your business needs EMV certified terminals or Card Not Present risk mitigation solutions today, contact me at 954-942-0483 or 3Dmerchant.com/contact. I specialize in business to business and mid-market payment solutions.