Visa on Wednesday said that it has made improvements to its payment processing system in order to better detect fraud.
According to the company, enhancements its Visa Advanced Authorization (VAA) technology will enable financial institutions to more reliably know which transactions to decline in real time.
Visa said the enhancements have the potential to reduce fraud by billions of dollars per year, while approving legitimate transactions with more confidence. Overall, Visa said the improvements could boost detection of fraud in debit transactions by as much as 130%, and 175% for credit transactions.
“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 analyze that data,” the company explained. “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 authorization decision.”
Improvements in Pay at the Pump Fraud Detection
Additionally, Visa said its network now has the ability to identify suspicious activity at gas pumps (Automated Fuel Dispensers) and apply that to all transactions processed through that station. The model also uses “account velocity” at gas pumps compared to that account’s normal behavior in the score determination. That model has the potential to increase the effectiveness of fraud detection in this segment by as much as 266% for debit transactions and 163% in credit, Visa said.
The improvements to Visa’s Advanced Authorization technology 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, Visa said.
“Cardholders, merchants and issuers all want to have confidence in the convenience and the security of every Visa transaction,” said Mark Nelsen, Head of Risk and Authentication Products, Visa Inc. “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.”
The announcement was made at the Visa Global Security Summit taking place this week in Washington, D.C.
