Visa’s deployment of artificial intelligence (AI) marks a significant step in combating the rising tide of payments fraud that has accompanied the proliferation of real-time and account-to-account transactions in the modern era. The surge in payments fraud has prompted Visa to bolster its fraud and risk management capabilities by integrating AI into its technology platform.
Visa’s adoption of AI technology encompasses three new applications aimed at enhancing security for issuers, merchants, and consumers. These applications operate independently of the transaction processing network, providing an additional layer of protection against fraudulent activities. By leveraging AI, Visa aims to stay ahead of the curve in addressing the growing scale and complexity of digital payments fraud.
This strategic initiative underscores Visa’s unwavering commitment to safeguarding its network and stakeholders from the evolving threat landscape in digital payments. By extending protective measures across its broader network, Visa aims to fortify its defenses and mitigate risks associated with fraudulent transactions.
In essence, Visa’s integration of AI into its fraud and risk management framework represents a proactive approach to addressing the challenges posed by increasing incidents of payments fraud. By leveraging advanced technology, Visa seeks to ensure the integrity and security of digital payments for all stakeholders involved in its ecosystem.
Expanding protection beyond Visa transactions
James Mirfin, Senior Vice President and Global Head of Risk and Identity Solutions at Visa, emphasized the pressing challenge posed by fraud on Visa’s network, revealing that the fraud rate stands at approximately 7 cents per every $100, a figure comparable to that of Square. Despite this similarity, Mirfin underscored the significant challenge presented by fraud due to the proliferation of social engineering tactics employed by fraudsters. He highlighted how fraudsters exploit human vulnerabilities, such as phishing and business email compromise scams, to perpetrate fraudulent activities, making it imperative to enhance security measures in this regard.
For merchants operating beyond the confines of North America and particularly for financial institutions (FIs), the necessity for robust fraud detection and management becomes even more critical. These entities often grapple with the complexities associated with managing multi-network card portfolios, amplifying the need for enhanced fraud management capabilities. Visa’s initiative aims to address these challenges by streamlining fraud management tools and implementing new anti-fraud measures and authorization rules across portfolios. By doing so, Visa anticipates facilitating the authorization of a greater volume of legitimate transactions while simultaneously reducing the operational burden associated with risk management.
AI-powered solutions for enhanced security
Visa has introduced its comprehensive risk and identity suite, Visa Protect Suite, featuring three innovative AI-powered solutions aimed at enhancing security and combating fraud. Among these solutions is the Visa Account Updater, which facilitates real-time identification of fraud and includes a series of services designed to detect fraudulent activity in real-time.
Central to the suite’s capabilities are neural network models for deep learning, which bolster security measures and enable more effective fraud detection. One of the key components of the suite is Visa Deep Authorization, which aims to increase authorization rates and reduce fraud associated with card-not-present transactions.
Visa is also set to roll out the Advanced Authorization and Risk Manager, extending its fraud management capabilities to non-Visa card payments and allowing issuers across various networks to efficiently manage fraud operations.
A significant innovation within the suite is the real-time Account-to-Account Payment Protection, Visa’s pioneering fraud solution tailored for instant transactions. This solution employs risk scoring algorithms to assess payments moving between accounts and digital wallets, ensuring secure and authentic real-time money transfers.
Scheduled for release in the first half of the year, these solutions build upon Visa’s layered approach to safeguarding the payments ecosystem against evolving fraud tactics. By leveraging advanced AI technologies and real-time fraud detection mechanisms, Visa aims to fortify security measures and enhance trust and confidence in digital payments.
Bridging networks to combat fraud
Visa’s strategic approach involves deploying advanced models to assess the risk of all transactions, regardless of whether they occur within or outside its network. This real-time risk scoring enables both sending and receiving banks to make informed decisions, thereby enhancing the overall security of the transaction process. By analyzing transactions across different payment networks, Visa aims to identify and mitigate fraud more effectively. For example, its collaboration with a U.K. bank has helped uncover “mule” accounts used for illicit fund transfers, highlighting the importance of cross-network visibility in combating financial crime.
These new solutions offer significant benefits for smaller financial institutions (FIs) that may lack the resources and infrastructure to address complex risk management challenges. By providing a suite of tailored tools, Visa empowers these institutions to bolster their fraud prevention measures, reinforcing its role in promoting a more secure and resilient payments ecosystem.
Visa’s expansion of AI-driven security solutions to encompass non-Visa transactions represents a major advancement in the fight against payment fraud. By leveraging artificial intelligence and tapping into its extensive global data, Visa aims to outpace fraudsters, delivering advanced protection to its clients and upholding the integrity of the global payments landscape.