Mastercard Uses AI to Solve ‘Jigsaw’ of Credit Card Fraud

Mastercard says it is using generative AI to more quickly detect compromised credit cards.

“Until now fraudsters may have thought they were operating in obscurity, seeking to launder the card details of millions of unsuspecting victims,” Johan Gerber, Mastercard’s executive vice president for security and cyber innovation, said in a Wednesday (May 22) news release.

“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.”

According to the release, Mastercard’s new technology works by scanning transaction data across billions of cards and millions of merchants faster than “previously imaginable.”

By doing so, it informs Mastercard about new and complex fraud patterns, using generative artificial intelligence (AI)-based predictive technology to protect future transactions against emerging threats.

For example, the technology doubles the detection rate of compromised cards and reduces false positives during the detection of fraudulent transactions against potentially compromised cards by as much as 200%.

The announcement follows last month’s news that Mastercard had debuted “Scam Project,” a product suite and several cross-industry partners to combat the use of artificial intelligence to scam consumers.

“By combining its identity, biometric, AI and open banking capabilities, the company said it can help protect consumers across the spectrum of internet and payments scams, from card-based and account-to-account payments to fraudulent account openings,” PYMNTS wrote.

That report cites statistics from the FBI showing that consumers across the United States lost $12.5 billion to internet scams in 2023. And in Great Britain fraudsters committed nearly 1.4 million thefts during the first half of last year — the equivalent of one every 12 seconds.

“Scammers are exploiting new technologies, making their deception and impersonation scams increasingly difficult for consumers to recognize,” said Chris Reid, executive vice president of identity solutions at Mastercard.

“Building on our innovations in AI and key partnerships, we are supporting financial institutions with insights to better detect and prevent scams, while helping consumers learn how to spot them. This holistic approach means more people will be protected, fostering trust in our digital world.”

Meanwhile, Mastercard rival Visa earlier this month rolled out a generative AI solution designed to help issuers deal with enumeration attacks.

As the company noted at the time, these attacks — in which threat actors employ automated scripts, botnets and other technologies to amplify these card testing attacks — account for $1.1 billion in fraud losses.