Visa Inc. (NYSE:V), the global leader in payments, is helping U.S. fuel retailers prevent credit and debit card fraud at the pump with intelligent analytics that identify higher-risk transactions that may be fraudulent.
While global fraud rates across the Visa payment system remain near historic lows – less than 6 cents for every $100 transacted – fuel pumps can be targets for criminals because they are often self-service terminals. The new solution, Visa Transaction Advisor (VTA), enables merchants to use real-time authorization risk scores to identify transactions that could involve lost, stolen or counterfeit cards. A pilot test of the new service showed a 23 percent reduction in the rate of fraudulent transactions – all without costly infrastructure upgrades or disruption of the customer experience.
“Visa Transaction Advisor uses sophisticated analytics based on the breadth and scale of VisaNet data to flag the riskiest transactions,” said Mark Nelsen, Vice President of Risk Products and Business Intelligence, Visa Inc. “By working with fuel companies to understand their needs, we were able to create a new service that builds on Visa’s predictive analytics capabilities, providing fuel merchants with more intelligence to prevent fraud and improve their bottom line.”
How It WorksAfter a cardholder inserts the card at the pump, Visa analyzes multiple data sets such as past transactions, whether the account has been involved in a data compromise, and nearly 500 other pieces of data to create a risk score. This allows merchants to identify those transactions with a higher risk of fraud and perform further cardholder authentication before gas is pumped. The time and costs associated with resolving fraudulent transactions can be substantial for both merchants and financial institutions and inconvenient for cardholders, which is one of the reasons why fraud prevention is critical. Visa’s solution is easy to implement – using existing message fields and formats as well as pump software or hardware to ensure minimal impact to merchants and acquirers.