Visa Introduces New Fraud Detection Level

Visa USA recently unveiled a new level of technology that analyzes card transactions both individually and across its entire network to detect fraud as it is occurring. The company says the new technology, called Advanced Authorization, will prevent about $164 million in fraud losses over the next five years.

When a Visa card is swiped, the technology provides an instantaneous rating of the transaction's potential for fraud based on a vertical view (previous and existing patterns of card activity for that card and whether the current transaction is unusual) and also a horizontal view (whether the card is part of some larger problem such as a data security breach or a coordinated criminal attack on multiple cards at one time). The rating is sent to the card issuer, which can then notify the merchant whether or not to approve the transaction. The new level of authorization takes under a second to occur.

The new technology will be applied to every Visa credit- and check-card purchase. Issuing financial institutions are now deciding how to incorporate the expanded fraud information into their existing risk-assessment systems.

Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 15, No. 6, 7/05