Visa Inc. recently announced the launch of Visa Advanced Authorization and Visa Risk Manager, combined solutions for comprehensive fraud prevention, enabling card issuing financial institutions to better identify and stop fraud at the check-out before it occurs. Visa Advanced Authorization is the first-of-its-kind security technology that analyzes and scores every Visa transaction for its fraud potential based on a global view of fraud across the entire Visa network. Visa Risk Manager is a turn-key intelligent decisioning tool that enables issuers to turn that unique insight into action by creating custom strategies to decline or respond to suspicious transactions in real-time. The two solutions together provide issuers insight, control and responsiveness to dynamically address fraud.
“Systems that detect fraud in hours or even minutes can be too slow to take effective action,” said Mike Smith, Head of Risk for Visa International who is currently visiting South Africa. “In less than two seconds, Visa Advanced Authorization can analyze a transaction and provide the card-issuing financial institution a risk score with unprecedented accuracy. In turn, Visa Risk Manager allows issuers to streamline decision-making, so they can turn insight into action. This remarkable speed and clarity can allow issuers to prevent fraud from occurring in the first place, rather than just reacting to fraud after it occurs.”
Visa Advanced Authorization
Visa Advanced Authorization was first introduced in the United States in 2005 and has helped identify billions of dollars of fraud and keep fraud rates near historic low levels. Recent enhancements now available globally have dramatically improved the system’s ability to detect and prevent global electronic payments fraud.
These fraud identification capabilities are a result of ongoing enhancements to the underlying processing platform, VisaNet, that powers Visa’s Advanced Authorization. A new operating system implemented earlier this year allows more information to be analyzed at once and perform more complex processing functions in milliseconds. This provides Visa with a comprehensive view into the global payments system, leading to high levels of intelligence around spending patterns and improving the company’s ability to detect and prevent fraud in near real-time. Because VisaNet processes more than 100 billion authorization, clearing and settlement transactions globally each year, Visa has a unique capability to identify fraud on individual accounts and coordinated attacks on multiple accounts across the system.
The risk score is generated from a real-time review of multiple aspects of each transaction including the cardholder’s previous activity and similarity to other suspicious transactions across the entire Visa network. The issuer can use this valuable information to decide in real time whether or not to authorize the transaction.
As Visa continues to process more transactions, and more international issuers use Visa Advanced Authorization, the data helps further enhance the models over time and better identify potential fraud across the entire network. The system will be able to more finely target different types of fraud – even as they emerge – enabling issuers to more accurately isolate fraudulent transactions from legitimate ones.
Examples of how Visa Authorization can help identify fraud in-flight:
- Visa Advanced Authorization is able to detect “high speed fraud,” where criminals attempt multiple transactions within a very short time period – minutes or even seconds apart. Because Visa’s network is not only able to process thousands of transactions per second, but also instantly recall and analyze millions of pieces of information in its memory, Visa is able to identify emerging fraud trends as they happen, not hours or days later.
- A new cross-border model takes advantage of Visa’s unrivaled global transaction perspective to increase fraud detection for transactions occurring outside a cardholder’s home country. By being able to build “models-within-models,” Visa is able to better focus on specific transactions types, fraud types and Visa product types. The new modeling capabilities are so powerful that it allows Visa to detect more than three times the amount of fraudulent cross-border fraud than previously identified.
Visa Risk Manager
Visa Risk Manager helps financial institutions easily create, test and execute card authorization rules to help issuers decline fraudulent transactions while optimizing approval rates for legitimate transactions. New rules can be deployed within minutes, responding to fraud trends as they evolve. The ability to constantly fine-tune risk management strategies enables issuers to keep pace with dynamic fraud patterns.
The tool is flexible enough to be used as a stand-alone tool or integrated within an issuer’s existing fraud management systems, cost-efficiently providing advanced decisioning capabilities with minimal or no capital investment.
Visa Risk Manager provides a number of capabilities including:
- Visa Real Time Decisioning: This gives financial institutions the capability to allow Visa to act on their behalf to decline or forward to the issuer for action, high-fraud-risk transactions using predefined rules created by the issuer. This real-time service addresses potential fraud as it flows through Visa so it never needs to reach the issuer.
- Visa Case Manager: After transactions have gone through the issuer’s normal authorization process, the Visa Case Manager web application enables issuers to view, prioritize, and manage transactions that require further investigation.
South African financial institutions interested in obtaining more information about Visa Advanced Authorization or Visa Risk Manager for better protecting cardholders from fraud should contact their Visa representative.