MasterCard has developed a service that provides online merchants with a predictive fraud score for card-not-present sales in real time to measure the likelihood that a transaction is crooked.
The system uses fraud detection models designed specifically for e-commerce, enabling merchants to evaluate a longer span of transaction history to deliver a fraud score that more accurately describes online cardholder behavior.
According to the Lexis-Nexis 2011 True Cost of Fraud Study, merchants incurred costs of more than $2.33 for every $1 of fraud committed, absorbing more than $102 billion in total losses in 2011.
Simulations conducted by MasterCard indicate that online merchants could realise a potential for 15-30% fraud loss savings by reviewing or automatically declining transactions deemed as high-risk by the using the new tool.
The service will be made available to US merchants and acquirers in May.