Visa's new analysis reveals that Visa Advanced Authorization (VAA), a payment method service that uses Artificial Intelligence, has helped financial institutions prevent $25 billion in annual fraud, creating a global ecosystem of safer payments for businesses and consumers.
VAA is a comprehensive risk management tool that monitors and evaluates transaction authorizations across Visa's global payment network, VisaNet, in real time to help financial institutions quickly identify and respond to emerging fraud patterns and trends. Visa processed more than 127 billion transactions between merchants and financial institutions on VisaNet last year, and used Artificial Intelligence to analyze 100% of transactions - each in about a millisecond - so financial institutions can approve legitimate purchases and quickly identify and prevent fraudulent transactions.
"One of the biggest challenges in digital payments is to differentiate between legitimate transactions made by bank account holders and those attempted by fraudsters without adding friction to the process," said Melissa McSherry, senior vice president and global head of Data, Risk and Identity Solutions and Products at Visa. "Visa was the first payment network to apply artificial neural networks in 1993 to analyse the risk of real-time transactions and the impact on fraud was immediate. By striking a balance between human experience and technological innovation, we continue to evolve our capabilities as new AI advances expand the possibilities."
For financial institutions, friction in the payment process can lead to abandonment of card payments. Another possibility is that users (51%) use a secondary payment card - which may be that of a competitor - when they suffer a false rejection in the purchase process, according to a study conducted by Javelin. But the biggest challenge we face with payments is fraud, as indicated by 55% of respondents[ii] in a report by the National Retail Federation and Forrester.
VAA helps prevent and reduce the risk of fraud to financial institutions and businesses, as well as reduce the friction caused by the rejection of payments in the purchase process. More than 8,000 financial institutions in 129 countries use this Visa tool.