Visa Europe planning move to real time fraud scoring

The new anti-fraud system from Visa Europe is known as real time scoring (RTS) and means that Visa's computers - coupled with human input for large value transactions - can make a rapid decision on whether a transaction is legitimate or note.

Plans call for real time fraud scoring to be prototyped with two European card issuers in December, with full deployments starting next April.

The real time fraud scoring tool is based on behavioural modelling technology and allows card issuers to determine whether to authorise, decline or refer the transaction, Visa said.

In July 2010, plans call for Visa Europe to deploy the second release of real time fraud scoring, allowing card issuers to make better decisions on transactions that are scoring on the limit of risk criteria - i.e. on the edge of being referred or declined.

The final release of will go live in October 2010 and will seek to allow those card issuers that do not have their own in-house fraud management systems to move on up to real time scoring.

Announcing the real time fraud scoring facilitates at the Cartes 2009 event in Paris this week, Visa officials said that real time scoring is a significant enhancement on the current Visa Intelligent Scoring of Risk (VISOR) system.

Real time fraud scoring, said Visa officials, is designed to reduce the total cost of fraud to banks and expected to improve detection rates by an average of 15% compared to other systems.

In use, the software is said to use neural network and predictive technologies to identify suspicious transactions in real time. A risk score is generated for each individual transaction as it passes through the Visa payment system.

Whilst the existing Visa Intelligent Scoring of Risk system scores transactions sent to Visa from an acquirer in batches at 10 minute intervals, real time fraud scoring scores reach the issuer in milliseconds as part of the transaction's authorisation request and can be used by banks to decide whether or not to accept individual transactions.

According to Visa, real time fraud scoring data is continually refreshed to generate the most accurate risk-scoring on the market

Kevin Smith, Visa Europe's senior vice president for fraud management, said that recent figures demonstrate that fraudster behaviour is changing.

"Some types of fraud are becoming harder to commit due to innovations such as Chip and PIN, which lead criminals to look elsewhere. Faster, more accurate systems are required to protect consumers and Visa Europe's member banks against potential losses in areas such as cross border and card not present fraud", he said.

"The roll out of RTS brings fraud detection to a new level and is crucial to ensuring the industry stays ahead of criminals", he added.

"Additionally, the flexibility of the RTS system allows for minimal infrastructure change for our member banks, and allows them to tailor a set of scoring rules to fit with their operational policies or customer considerations."

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