Mastercard Scores Every Transaction in Real Time to Assess the Potential for Fraud

The digital payment ecosystem in India is evolving rapidly. The Government of India has highlighted the importance of digital payments as a part of its larger agenda of financial inclusion. It has set a target of 30 billion digital transactions in the country in FY 19. This is supplemented by over 478 million mobile internet users in the country. Therefore, it is imperative to protect and imbibe safety and security measures for every single digital transaction.

We are living in a connected world and with the advent of the Internet of Things (IoT), the possibility of fraud has increased manifold. The number of IoT devices in India is expected to increase significantly from roughly 200 million units in 2016 to 2.7 billion units by 2020, according to a NASSCOM report. All these will be connected, many of them payment enabled and potentially vulnerable.

The scale of cyber threats has also grown by leaps and bounds. According to a recent survey in India conducted by Mastercard, 85% of people now accept that data breaches and hacks are the new normal and will likely happen to everyone. Moreover, nearly eight-in-ten (78%) of Indians believe there is not much they can do to protect their personal and financial information from being stolen.

"A significant driver for this trend is our evolution into a world that revolves around apps and many apps have payment rail that supports the underlying transaction in a seamless way – be it retail or cabs or food delivery. As much as these require payments to be smooth, there is also a need to keep them secure to retain customer trust. So, we see this trend that accentuates the need for good cybersecurity protection at multiple levels," said Karthik Ramanathan, Senior Vice-President, Enterprise Security Solutions, Asia Pacific, Mastercard.

AI Helps in Detecting Fraud:

The company claims that Mastercard scores every transaction in real time to assess the potential for fraud and shares this data with Issuer banks. This is an invaluable input for Issuers to approve or decline a transaction. Launched in 2016, Decision Intelligence is the company's latest scoring tool based on AI. When you are looking to analyze over 140,000 transactions every minute, analyze behavioural history at a customer level and use a large amount of historical fraud data to arrive at a score, you need the power of AI. The company acquired Brighterion in 2017 and with its help, are building AI into various modules within our fraud assessment ecosystem.

"Another company we acquired in 2017, is a cybersecurity firm called NuData. They are a global leader in behavioural biometrics – a cutting-edge field. For example, if someone was to steal your password or use your phone to login to your bank account, NuData with its AI can identify the abnormal use of the device basis past experience like grip, typing speed, being held in the left or right hand, etc. The suspicious transactions are reported to banks, merchants, or any other relevant stakeholders who can assess the risk in real time and allow or deny the transaction," said Karthik Ramanathan.

These are just two examples where the company uses AI to inform the stakeholders in real time about a transaction - so that they can make informed decisions.

How does Mastercard Prevent Fraud:

In 2017, about 70 billion transactions around the world were processed through the Mastercard system. To make these transactions safe, Mastercard has invested over U.S.$ 1 billion globally in the last three years to protect the digital payments ecosystem. There is no one single solution that can stop fraud. "So, we recommend and offer several layers of security without hampering the user experience. Our presence across more than 200 markets and the sheer volume of transactions we see has helped Mastercard understand and identify the key fraud trends cropping around the world," said Karthik.

According to a study by Fortune, more than 80% of Fortune 500 CEOs view technology as extremely important to their company’s future. "Viewed as a vital capability for industries that have rich data, many companies still lack the experience and expertise to extract the intelligence that can improve consumers’ experience. For companies looking to take advantage of the technology today, AI Express offers quick results along with the know-how to move forward with a full-fledged artificial intelligence deployment," he added.

The AI Express program was designed by Mastercard to help companies address key business priorities, including:

-Anti-money laundering

-Fraud risk management

-Cybersecurity

-Credit risk prediction

-Operational efficiencies

At one level, the company has several solutions that prevent a fraudulent transaction from entering our system. On top of that, they have several real-time tools that scan a transaction and identify potential fraud. The company claims that they are constantly adding new tools that improve our partners’ capabilities to identify and to stop fraudulent transactions.