There are more decisions now when managing your transactions than ever before. ‘Is this a fraudulent purchase?’ ‘Which processor should I leverage?’ Is frictionless 3DS an option?’ ‘Should I use network tokens?’ and on and on. Often, these decisions are made through the lens of cost reduction when, in reality, they should be made through the lens of revenue generation.
When thinking about stopping fraudsters, what metrics are at the top of your mind? Many merchants initially consider metrics related to cost reduction — chargeback fee, free meal cost, processing fees, etc. The problem with solely focusing on these metrics is that they miss the opportunity to drive an excellent experience for good, legitimate customers and, as a result, risk revenue due to false declines, customer friction, and low customer lifetime value (CLTV).
To be successful, merchants must view fraud and payments through the lens of generating revenue. Remember, you are building your payment flows for legitimate customers, not the fraudsters. Therefore, it is essential to focus on improving the customer experience and tracking additional metrics, including the authorisation rate and CLTV.
Identity intelligence. Improve the customer experience while preventing fraud and abuse by leveraging AI to accurately determine the customer’s identity – beyond just an email address or credit card number. By understanding the identity behind the purchase, your business can make more accurate fraud decisions, reduce false declines, and remove friction for your good, legitimate customers.
Issuer optimisation. Issuer preferences are constantly evolving. For example, more issuers continue to leverage network tokens or how issuers have different appetites for PSD2 exemptions. Merchants can leverage AI to stay in the loop with these changing preferences and maximise the success of each transaction.
Automated payment testing. AI can also be leveraged to streamline testing. Automatically and consistently test the best route for each transaction to increase performance and reduce costs.
Galit Shani-Michel is VP of Payments at Forter. With over 15 years of experience, Galit has worked in various leadership roles, and is an expert in Online Payments, Fraud, Compliance, AML, GDPR, and fintech regulations.
Forter is the Trust Platform for digital commerce. We make accurate, instant assessments of trustworthiness across every step of the buying journey. Forter helps businesses prevent fraud, maximise revenue, and deliver superior experiences for consumers. This is why it has been trusted to process more than USD 500 billion in transactions.
In the last five years, Visa has invested USD 10 billion in cybersecurity and in creating a more robust and secure ecosystem. As the first to use Artificial Intelligence (AI) in the payments industry, Visa understands the value of this technology for identifying and preventing fraud, which has allowed them to prevent USD 41 billion worth of fraudulent transactions in 2023 alone.
Payments has traditionally been a four-party model (Acquirers, Issuers, Merchants and Cardholders), but, today, there are significantly more players, including Payment Facilitators and Enablers. Whilst this evolution continues to improve the customer experience, it also results in a larger attack surface for criminals to exploit.
Criminals are uniting like never before in the dark web and taking more brazen steps than ever to perpetrate fraud. Fraudsters are using audio, text, images, chatbots, video, code, and Generative AI to make their way to consumers’ money. Phishing and malware attacks are becoming more prevalent, and new sophisticated use cases are emerging. For example, criminals now have the capability to recreate faces to pass a biometrics test or create a fully functioning voice clone using just three seconds of audio.
Visa is winning the battle against the fraudsters, especially thanks to AI and the emerging large language models that proved a game-changer in this evolving payment ecosystem. We are also leveraging these tools to increase our fraud detection and prevention capabilities.
AI is allowing Visa to identify patterns and anomalies across billions of transactions in real-time to search for fraudulent activity and to support us in taking action. At the same time, AI is also driving personalisation in the retail experience for consumers. In the future, everything is likely to be connected through digital assistants, creating a ‘phygital’ world that is personalised, integrated, and seamless for individual needs. Integration between inventory, store, and checkout experience is key.
Retailers are using AI capabilities to connect consumer spending and habits across multiple platforms and locations. Creating a personalised shopping experience, both in-store and online, to make it feel like the store was designed specifically for them, will result in an enhanced and omnichannel checkout experience, reducing cart abandonment.
Visa is playing a leading role in delivering secure payment experiences of the future. We take the learnings we have from more than sixty years of card payments and applying them to all forms of new money movements, including real-time payments (RTP). We are investing in evolving technologies such as tokenization and delivering new solutions, including click to pay, to enhance the customer journey.
The flexibility and operational resilience of Visa’s network means our robust infrastructure can be adapted to meet new challenges; allowing us to stay ahead of the fraudsters. We are excited to keep building a payment ecosystem where financial transactions are not only more convenient but also more secure and resilient.
Natalie Hyche Kelly is Chief Risk Offices at Visa Europe and has 25 years of payment industry experience spanning from innovation, digital and emerging payments, to leading Global Go-to-Market and Risk teams. Natalie is a strategic digital payments executive with extensive leadership experience building high performing teams, driving complex situations to decision, developing internal strategies, and transforming teams to manage risk while growing the business responsibly.
Visa is a world leader in digital payments, facilitating transactions between consumers, merchants, financial institutions, and government entities across more than 200 countries and territories.
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