Mastercard Expands AI Technology to Combat Real-Time Payment Scams

Mastercard : expands first of its kind AI technology to help banks protect more consumers from scams in real time

Mastercard today updated its Consumer Fraud Risk (CFR) solution to increase the ways it helps protect consumers from Real Time Payment scams. The AI-powered insights give more UK banks greater visibility into potentially fraudulent transactions so they can stop scams before they take place. These scams, known as Authorised Push Payment (APP) fraud - usually sparked by a fictitious website, email, text message or phone call - saw UK consumers defrauded out of £460m ($607m) in 2023 . Today, banks return funds to victims on a voluntary basis. From October 7, new rules from the UK's Payment Systems Regulator (PSR) will require banks to reimburse all APP fraud victims, except for limited exceptions. Since early 2023, the Mastercard solution has helped 11 UK banks identify and stop a scam payment before the funds leave the victim's account. It works by scanning multiple data points associated with a transaction, providing a risk score - in real time - to the sender's bank. The PSR collects payments data from 14 of the largest banks in the UK mandated to report. Across 2023 the data showed a 12% reduction in the total value of APP scams from £389m ($514m) to £341m ($450m). The new, additional AI enhancements to Consumer Fraud Risk provide the receiving banks the same score within seconds, making it possible for them to detect when a payment may be destined for an account used by fraudsters, known as a mule account. "Fraudsters have long sought to deceive the consumer through scam websites and fictious deals. That's why, at Mastercard, we are turbocharging our technology, providing banks additional lines of defence - helping them better identify and stop scams in their tracks," said Johan Gerber, Executive Vice President, Security Solutions at Mastercard. Initial offline tests of the additional 'inbound risk' alerts have seen a 60% improvement, on average, in a bank's ability to identify high risk mule accounts early, within its account base. Mastercard has plans to expand Consumer Fraud Risk to markets globally within the year, expanding the protection offered to consumers and helping to build a more secure digital ecosystem for all.

Mastercard's new AI update targets real-time payment scams | bobsguide

Mastercard has announced significant updates to its Consumer Fraud Risk (CFR) solution, designed to help UK banks better detect and prevent real-time payment scams. These improvements focus on providing banks with enhanced visibility into potentially fraudulent transactions through AI-powered insights, allowing them to block scams before they occur. Authorised Push Payment (APP) fraud, one of the most prevalent forms of payment scams, cost UK consumers £460 million in 2023. This type of fraud often involves victims being tricked into sending money through fake websites, emails, or phone calls. Since early 2023, Mastercard's AI solution has supported 11 UK banks in identifying fraudulent payments before funds leave a victim's account. The system assigns a real-time risk score based on multiple transaction data points, alerting the sending bank of any suspicious activity. However, the latest enhancements now extend these fraud detection capabilities to receiving banks, enabling them to act quickly when payments are heading towards potentially fraudulent accounts, often referred to as 'mule accounts.' Mastercard's Executive Vice President of Security Solutions, Johan Gerber, commented: "Fraudsters have long sought to deceive the consumer through scam websites and fictitious deals. That's why, at Mastercard, we are turbocharging our technology, providing banks additional lines of defence - helping them better identify and stop scams in their tracks." These developments come as the UK's Payment Systems Regulator (PSR) is set to introduce new rules on 7 October that will require banks to reimburse victims of APP fraud, barring certain exceptions. While many banks already voluntarily compensate fraud victims, this mandatory regulation raises the stakes for financial institutions to strengthen their fraud prevention measures. Preliminary tests of Mastercard's new 'inbound risk' alerts have shown a 60% improvement in a bank's ability to detect high-risk mule accounts. This AI-driven advancement could play a crucial role in reducing the impact of APP fraud, which fell by 12% in 2023, from £389 million to £341 million, according to PSR data. Mastercard has plans to expand Consumer Fraud Risk to markets globally within the year, aiming to 'expand the protection offered to consumers and help build a more secure digital ecosystem for all'.

Mastercard Consumer Fraud Risk tech

This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author. The AI-powered insights give more UK banks greater visibility into potentially fraudulent transactions so they can stop scams before they take place. These scams, known as Authorised Push Payment (APP) fraud - usually sparked by a fictitious website, email, text message or phone call - saw UK consumers defrauded out of £460m ($607m) in 2023 . Today, banks return funds to victims on a voluntary basis. From October 7th, new rules from the UK's Payment Systems Regulator (PSR) will require banks to reimburse all APP fraud victims, except for limited exceptions. Since early 2023, the Mastercard solution has helped 11 UK banks identify and stop a scam payment before the funds leave the victim's account. It works by scanning multiple data points associated with a transaction, providing a risk score - in real time - to the sender's bank. The PSR collects payments data from 14 of the largest banks in the UK mandated to report. Across 2023 the data showed a 12% reduction in the total value of APP scams from £389m ($514m) to £341m ($450m). The new, additional AI enhancements to Consumer Fraud Risk provide the receiving banks the same score within seconds, making it possible for them to detect when a payment may be destined for an account used by fraudsters, known as a mule account. "Fraudsters have long sought to deceive the consumer through scam websites and fictious deals. That's why, at Mastercard, we are turbocharging our technology, providing banks additional lines of defence - helping them better identify and stop scams in their tracks," said Johan Gerber, Executive Vice President, Security Solutions at Mastercard. Initial offline tests of the additional 'inbound risk' alerts have seen a 60% improvement, on average, in a bank's ability to identify high risk mule accounts early, within its account base. Mastercard has plans to expand Consumer Fraud Risk to markets globally within the year, expanding the protection offered to consumers and helping to build a more secure digital ecosystem for all.

Mastercard Taps AI to Tackle UK APP Fraud Epidemic | PYMNTS.com

Mastercard has introduced what it says are new protections against real-time payment scams. The update to the company's Consumer Fraud Risk (CFR) solution, announced Tuesday (Sept. 24), uses artificial intelligence (AI) to provide British banks with more visibility to prevent fraudulent transactions. The announcement comes just days ahead of new rules requiring U.K. financial institutions to reimburse victims of authorized push payment (APP) fraud, which Mastercard notes is typically triggered by a fictitious website, email, text message or phone call. Such scams cost British consumers $607 million in 2023. "Fraudsters have long sought to deceive the consumer through scam websites and fictitious deals," said Mastercard Executive Vice President, Security Solutions Johan Gerber. "That's why, at Mastercard, we are turbocharging our technology, providing banks additional lines of defense -- helping them better identify and stop scams in their tracks." The company says its solution has since last year helped 11 British banks identify and prevent scams. The tool works by scanning multiple data points associated with a transaction and providing a real-time risk score to the sender's bank. "The new, additional AI enhancements to Consumer Fraud Risk provide the receiving banks the same score within seconds, making it possible for them to detect when a payment may be destined for an account used by fraudsters, known as a mule account," Mastercard added, noting that it plans to expand the fraud risk prevention globally "within the year." Mastercard's updated offering comes as financial institutions (FIs) are increasingly turning to AI to bolster their fraud prevention capabilities. "The adoption of AI and machine learning (ML) technologies is transforming how transactions are monitored and secured," PYMNTS wrote last month. "A significant 94% of payments professionals view AI primarily as a tool for improving fraud detection. AI's predictive analytics capabilities help identify potential fraud by analyzing user behavior patterns and transaction anomalies." Aside from fraud detection, AI is being employed for personalized customer service and operational efficiencies. And a survey last year by FICO survey found that a little more than three-quarters of customers expect FIs to use AI for better fraud prevention, spotlighting the increasing demand for advanced security measures. "AI's ability to provide real-time alerts about suspicious activities further underscores its critical role in the future of secure and efficient payments," PYMNTS wrote.