Mastercard: AI Lets Us Prevent Payment Disruptions

Mastercard has unveiled new artificial intelligence (AI)-powered solutions to help banks provide “always-on” payments.

“In today’s world where the payment ecosystem is highly distributed and increasingly complex, it’s vital banks get the support they need to ensure card payments run seamlessly,” Ajay Bhalla, president of cyber and intelligence at Mastercard, said in a news release provided to PYMNTS Thursday (Oct. 19).

The release notes that an increase in cybercrime, an “expanding and diversifying payments ecosystem” and an increase in regulation have combined to create greater need for improved payment resiliency.

“To help banks address these challenges, Mastercard has expanded its Payment Resiliency solutions with three new optional enhancements to its Stand-In Authorization service,” the news release said.

This includes “Dynamic Decisioning,” designed to enhance authorization accuracy by using AI to make informed decisions on the issuers’ behalf. The new Account Balance Listing tool also lets issuers share cardholder spend limits with Mastercard for more precise decisioning while reducing overdrafts and over-credit-limit concerns.

“Mastercard’s resiliency solution helps mitigate the impact on consumers when banks are unable to process a card payment, whether due to planned or unexpected outages,” the release said. “The impact of outages is prompting increased scrutiny from regulators who are interested in how financial institutions are building resiliency into their payment systems.”

Mastercard’s new product launch is the latest example of how the payments world is employing AI. As reported here earlier this week, that includes financial institutions (FIs) that are using technology such as AI and machine learning (ML) to fight financial crime.

“These advanced tools offer the potential to analyze vast amounts of data, identify patterns, and detect anomalies that indicate fraudulent activities,” PYMNTS wrote.

“For Big Tech and FinTech firms that still need convincing, the fact that 66% of FIs that use ML or AI experienced a decrease in overall fraud rates could help increase their trust in the effectiveness of AI in combating fraud.”

Michael Jabbara, vice president and global head of fraud services at Visa, has also argued for the use of AI in fraud prevention, telling PYMNTS in a recent interview that the technology can help fight the “democratization” of cybercrime and ransomware.

He said AI is “the superpower that gives us the ability to detect that proverbial fraudulent needle in the overall haystack of legitimate interactions — and then build the automation necessary to carve out the fraud while letting the authentic transactions go through.”