Visa Prevents Approximately $25 Billion in Fraud Using Artificial Intelligence

Since pioneering AI in payments, continuous evolution of the
technology in Visa Advanced Authorization helps drive commerce and
consumer confidence

SAN FRANCISCO–(BUSINESS WIRE)–Visa Inc. (NYSE: V) today 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.i
VAA is a comprehensive risk management tool that monitors and evaluates
transaction authorizations 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 analyze 100 percent 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 analyze 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 percent) 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.ii However, removing friction cannot come at
the expense of identifying and preventing fraud. As a survey by the
National Retail Federation and Forrester discovered, the top
payment-related challenge faced by retailers is fraud, cited by 55
percent of those surveyed.iii

Visa Advanced Authorization is a layer of fraud prevention that can help
drive down risk and fraud for financial institutions and retailers, and
help reduce friction due to false declines for payment account holders.
More than 8,000 financial institutions in 129 countries use Visa
Advanced Authorization.

Preventing fraud near the speed of light

Visa pioneered using neural networks modeled after the human brain to
power its AI platform to identify possible fraud. This delivers faster
and deeper insights through previously unknown correlations. Delivered
through Visa Advanced Authorization, retailers and financial
institutions benefit from:

  • Machine Learning models used for real-time examination of each
    transaction for indicators of fraud—looking at activities, patterns
    and more than 500 risk attributes—all in about one millisecond.
  • Risk scoring, which Visa shares with the account holder’s financial
    institution, where the decision is made to either approve or decline
    the transaction, or flag the transactions for follow up with the
    account holder.
  • The ability to identify good transactions even when made by new or
    infrequent shoppers, reducing the likelihood of false declines.
  • Real-time authorization using integrated, global predictive analytics
    to identify and prevent fraud.

Visa has kept global fraud rates at historic lows—less than 0.1
percent—through a multi-layered approach of investing in human
intelligence and technology like A.I.; empowering consumers and clients
with tools, resources and control to manage risk; and setting governance
processes to help businesses and regulators stay nimble.iv

Consumers identified Visa as the most trusted company to provide
financial services or payments among all payment networks and we believe
it is due to Visa’s unrelenting focus on eliminating fraud and
protecting the payment ecosystem,” said McSherry.v

Additional Risk Solutions Using AI

Visa champions security every day to protect the payment ecosystem and
offers a portfolio of risk products and services that can help
consumers, merchants and financial institutions prevent fraud. This
includes Visa
Risk Manager (VRM)
, Visa
Consumer Authentication Services (VCAS)
and CyberSource
Decision Manager (DM)
, among others. For more information about
Visa’s Risk solution portfolio, visit Visa
Security
.

Additional Resources

About Visa Inc.

Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our
mission is to connect the world through the most innovative, reliable
and secure payment network – enabling individuals, businesses and
economies to thrive. Our advanced global processing network, VisaNet,
provides secure and reliable payments around the world, and is capable
of handling more than 65,000 transaction messages a second. The
company’s relentless focus on innovation is a catalyst for the rapid
growth of digital commerce on any device for everyone, everywhere. As
the world moves from analog to digital, Visa is applying our brand,
products, people, network and scale to reshape the future of commerce.
For more information, visit About
Visa
, visa.com/blog
and @VisaNews.

i For the 12 months ended April 30, 2019

iiAddressing the Threat of False Positive Declines” by Kyle
Marchini and Al Pascual, Javelin Strategy & Research, October 17, 2018

iiiThe State of Retail Payments Report – Outlook for 2019”
by Brendan Miller, principal analyst, Forrester, November 2018

iv Visa Global Fraud Data, Visa Inc., April 2019

vOmnichannel and Branch: The Current U.S. Consumer Banking
Environment,” by Peter Reville, Director of Primary Data, Mercator
Advisory Group, March 2019

Contacts

Media Contacts:
Visa Inc.
Louis Cheng
415-310-6442
locheng@visa.com

Visa Inc.
Sandra Chu
415-805-4124
sanchu@visa.com

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