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Credit card company Mastercard is introducing artificial intelligence (AI) into its global network to provide more effective transaction approval.
The company has introduced Decision Intelligence, a service that uses artificial intelligence to learn from every transaction it monitors. Decision Intelligence will replace the systems that focus on risk assessment based on pre-defined rules.
Mastercard wants to reduce the number of transactions wrongly declined while retaining high security.
“We are solving a major consumer pain point of being falsely declined when trying to make a purchase,” said Ajay Bhalla, president of enterprise risk and security at Mastercard. “By using AI technology on our global network, we’re helping financial institutions and merchants improve approval rates – and the consumer experience.”
Decision Intelligence examines how a specific account is used over time to detect normal and abnormal shopping spending behaviour.
According to Javelin Strategy & Research in the US, the value of false declines is more than 13 times the total amount lost to actual card fraud.
Al Pascual, senior vice-president, research director and head of fraud and security at Javelin Strategy & Research, said: “Applying machine learning to decision scoring is a new way of creating a positive consumer experience, while also minimising fraud.”
Mastercard is using the latest technologies to improve usability of its services. For example, it recently rolled out “Selfie Pay” to its UK cardholders, allowing customers to authenticate themselves using facial recognition.
UK banks will be able to roll out the technology allowing consumers to pay on their smartphones by selfie or fingerprint through Mastercard’s Identity Check Mobile application.
Mastercard decided to launch the service after trials in the Netherlands, the US and Canada identified that European consumers prefer to use biometric authentications as opposed to passwords.