With real-time and account-to-account transactions increasingly shaping the modern era, payments fraud has surged proportionally. This increased payments fraud has prompted Visa to deploy artificial intelligence (AI) to heighten their fraud and risk management capability. Visa will deploy artificial intelligence in three new applications within its technology platform that increase security for issuers, merchants, and consumers, independently of the network that processes the transactions, reported on Wednesday.
This strategic move underscores Visa’s commitment to extending its protective measures to the broader network, an important way to deal with the growing size and more complex nature of the evolving landscape of digital payments fraud.
Expanding protection beyond Visa transactions
James Mirfin, Senior Vice President and Global Head of Risk and Identity Solutions at Visa, said that the fraud rate on Visa’s network was approximately 7 cents per every $100, almost the same as the figure for Square. However, this has turned out to be a big challenge because with the social engineering, most people have found a way of carrying out fraud. People have a tendency to carry out fraud. Fraudsters use human frailties in terms of phishing and business email compromise scams. There is a need for more security in this aspect.
For merchants operating outside North America and all the more so for financial institutions (FIs), the need becomes very critical to have better fraud detection and management in place. Entities experience peculiar challenges in the processing of transactions, as they have multi-network card portfolios under their management many a time. The initiative is, according to Visa, expected to streamline fraud management tools and add new anti-fraud and authorization rules across portfolios. The company hopes that this will result in the authorization of a larger volume of legitimate transactions while reducing the operational burden in risk management.
AI-powered solutions for enhanced security
The risk and identity suite, Visa Protect Suite, was first announced by Visa. It introduces three AI-powered innovations. From the Visa Account Updater to a series of services that help identify fraud in real time, the suite includes the complete set of tools: neural network models for deep learning for enhanced security. VISA DEEP AUTHORIZATION: To help drive up the rate of authorizations and down the level of fraud associated with card-not-present transactions.
Advanced Authorization and Risk Manager will be rolled out by Visa for non-Visa card payments to enable issuers across the networks to easily manage fraud operations.
It includes a major innovation: real-time Account-to-Account Payment Protection, Visa’s first fraud solution prepared for instant transactions. This solution will offer scoring risks for payments moving between accounts and digital wallets, hence making possible a authentic and real-time safe transfer of money.
These solutions, set to roll out in the first half of this year, build on Visa’s layered approach to securing the payments ecosystem amidst changing fraud tactics.
Bridging networks to combat fraud
Visa’s strategy involves running advanced models on all transactions, whether within or outside its network, to assign real-time risk scores. This approach enables both sending and receiving banks to make informed decisions, enhancing the overall security of the transaction process. By connecting and scoring transactions across different payment networks, Visa aims to identify and mitigate fraud more effectively. For instance, the company’s collaboration with a U.K. bank has facilitated the detection of “mule” accounts used for illicit fund transfers, highlighting the importance of cross-network visibility in combating financial crime.
These new solutions are particularly beneficial for smaller FIs, which often lack the resources and infrastructure to address the complex challenges of risk management effectively. By offering a range of tools tailored to different needs, Visa empowers these institutions to enhance their fraud prevention measures, underscoring the company’s role in fostering a more secure and resilient payments ecosystem.
Visa’s expansion of its AI-driven security solutions to include non-Visa transactions marks a significant step forward in the fight against payment fraud. By harnessing the power of artificial intelligence and leveraging its extensive global data, Visa aims to stay ahead of fraudsters, offering advanced protection to its clients and contributing to the integrity of the global payments landscape.