Mastercard has rolled out new protections designed to combat real-time payment scams.
The update to its Consumer Fraud Risk (CFR) solution, announced on Tuesday (Sept. 24), leverages artificial intelligence (AI) to give British banks better visibility into preventing fraudulent transactions.
This announcement comes just ahead of new U.K. regulations that will require financial institutions to reimburse victims of authorized push payment (APP) fraud. According to Mastercard, these scams—often triggered by fake websites, emails, texts, or phone calls—cost British consumers $607 million in 2023.
“Fraudsters have long used scam websites and fictitious deals to deceive consumers,” said Johan Gerber, Mastercard’s Executive Vice President of Security Solutions. “At Mastercard, we are accelerating our technology to provide banks with additional defenses, helping them stop scams in their tracks.”
AI Enhancements Enable Real-Time Risk Scoring
Since last year, the company claims that its solution has already helped 11 British banks detect and effectively prevent scams. The tool works by analyzing multiple data points from each transaction and assigning a real-time risk score to the sender’s bank.
With the latest AI enhancements, the receiving banks can now access this risk score within seconds. It allows them to detect when a payment is heading to a fraudster’s account, also known as a mule account. Mastercard plans to expand this fraud prevention technology globally by the end of the year.
Financial Institutions Turn to AI for Stronger Fraud Detection
As financial institutions increasingly adopt AI to strengthen their fraud detection efforts, this move reflects a growing industry trend. PYMNTS recently reported that 94% of payments professionals view AI as a key tool for improving fraud prevention. By analyzing user behavior and transaction anomalies, AI’s predictive analytics help flag potential fraud.
In addition to fraud detection, AI is being used for personalized customer service and operational efficiency. A FICO survey found that over three-quarters of customers expect financial institutions to use AI for better fraud prevention, highlighting the rising demand for advanced security solutions.
“AI’s ability to deliver real-time alerts on suspicious activities further solidifies its essential role in the future of secure, efficient payments,” PYMNTS noted.
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