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Mastercard uses AI to crack down on credit card fraud

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Generative AI technology scans billions of cards and millions of merchants at previously unimaginable speeds, alerting Mastercard to new, complex fraud patterns (File photograph)

Fraudsters steal millions of payment card numbers through spyware, malware and other clandestine practices such as card-skimming.

As they seek new ways to exploit technology, Mastercard is using generative artificial intelligence to double the speed at which it can detect potentially compromised cards, the company has said.

In a bid to sell this data to other criminals, perpetrators place part of the 16-digit card numbers on illegal websites.

Mastercard said it is now better able to predict the full card detail of these compromised cards on its network, enabling banks to block them far faster than previously possible.

Johan Gerber, executive vice-president, Security and Cyber Innovation at MasterCard (File photograph)

Johan Gerber at Mastercard said: “Until now fraudsters may have thought they were operating in obscurity, seeking to launder the card details of millions of unsuspecting victims.

“Thanks to our world-leading cyber technology we can now piece together the jigsaw – enhancing trust to banks, their customers and the digital ecosystem as a whole.”

The company added: “The new technology works by scanning transaction data across billions of cards and millions of merchants at faster rates than previously imaginable.”

In doing so, it alerts Mastercard to new, complex fraud patterns. Using generative AI-based predictive technology built by the payment card services corporation it is able to protect future transactions against emerging threats, by:

• Doubling the detection rate of compromised cards

• Reducing false positives during the detection of fraudulent transactions against potentially compromised cards by up to 200 per cent

• Increasing the speed of identifying merchants at-risk from, or compromised by, fraudsters by 300 per cent

As a result of these enhancements, Mastercard said it is able to alert banks more quickly and with greater accuracy when a card is likely to have been compromised.

The card can then be blocked and reissued. Attempted transactions on the compromised card can be continuously monitored to mitigate fraud and enhance cybersecurity, further instilling trust.

The card company said: “This latest enhancement, leveraging cutting-edge generative AI techniques, turbocharges Mastercard’s suite of security solutions.

“Cyber Secure, available since 2020, uses integrated technology to create a baseline of transparent cybersecurity information on bank and merchant online profiles in the payment ecosystem, including details of suspected compromised cards.”

How does a card skimmer get my information?

Alarming credit card breaches have abundantly clarified the need for cybersecurity.

In 2022 alone, 441,882 personal records from these financial tools were misused in the US.

Over 1.8 million incidences of identity theft and impostor scams were reported to the Federal Trade Commission. One common yet elusive high-profile threat that enables this fraud is skimming.

Credit card skimmers get information through elaborate deception and ingeniously discreet tactics involving compromised payment machines. Once installed and ready to relay information, it reads the magnetic stripe or chip for discretionary data and a cryptogram that validates transactions.

Here is how they work:

Installation and data capture: External skimming devices cling unseen to ATMs near the card slot or magnetic swipe reader, while interchangeable pad overlays or pinhole cameras record the customer’s PIN. Internally, gas pumps and (point-of-sale) systems hide rigged card readers that extract billing credentials.

Transmission: Sometimes, the instant retrieval of debit or credit card numbers involves wireless transmission via Bluetooth to a repository or back-up gadget in a different location.

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Published May 28, 2024 at 8:00 am (Updated May 29, 2024 at 8:13 am)

Mastercard uses AI to crack down on credit card fraud

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