Visa beefs up card fraud detection capabilities
By Digital News Asia October 8, 2013
- Intended to improve security for consumers
- Reduces fraud for retailers and financial institutions
VISA Inc has enhanced Visa’s Advanced Authorization (VAA) technology to improve the ability of its global processing network to detect potential electronic payments fraud.
Mark Nelsen (pic), head of Risk and Authentication Products for Visa, said cardholders, merchants and issuers all want to have confidence in the convenience and the security of every Visa transaction.
“The great improvements we’ve made in Advanced Authorization this year were designed to do just that: fight fraud and its costs to financial institutions and merchants, while also ensuring legitimate transactions are handled with the speed and convenience that consumers and merchants want,” he said.
Visa has increased the breadth of each account profile in the Advanced Authorization model by adding more transactional history data, along with additional neural networks to analyse that data, it said in a statement.
The account profile is a major component of the risk score assigned to a given transaction and provided to the issuer for them to make an authorisation decision.
The result is more robust performance, Visa claiming an improvement of as much as 130% in detecting fraud in debit transactions and 175% for credit transactions.
Financial institutions can use the information to more reliably know which transactions decline in real time, reducing fraud; and would also be able to more confidently approving legitimate transactions to remove friction from payments for merchants and consumers alike.
The enhanced model includes additional risk indicators specific to Automated Fuel Dispenser (AFD) transactions.
Visa’s network can now pinpoint suspicious activity at a gas station and apply that to all transactions processed through that station. The model also uses account velocity at AFDs compared to that account’s normal behaviour in the score determination.
According to the financial services provider, this can potentially increase the effectiveness of fraud detection in this segment by as much as 266% for debit and 163% in credit transactions.
The VAA improvements offer the potential to substantially reduce fraud in both transactions where the physical Visa card is present, such as a retail store, as well as in 'card not present''environments such as online shopping.
The announcement was made at the Visa Global Security Summit, held in Washington DC in early October.