Global payments technology company, Visa Inc. has 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.
VAA is a comprehensive risk management tool that monitors and evaluates transaction authorisations 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 analyse 100% 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 analyse 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%) 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. However, removing friction cannot come at the expense of identifying and preventing fraud. A survey by the National Retail Federation and Forrester discovered that the top payment-related challenge faced by retailers is fraud, cited by 55% of those surveyed.
Words by Katie Streten Experiential Strategy Director, VMLY&R COMMERCE Throughout the last year,June 13, 2021 | By Shruthi Nair
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