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MasterCard goes into battle against false declines

19 February 2016  |  10624 views  |  5 add to basket

MasterCard is bidding to help banks cut down the number of false declines on card transactions with the roll out of more precise behavioural fraud analytics.

With one out of every six cardholders experiencing at least one decline because of suspected fraud in the past year, MasterCard says its new technology bundle will provide deeper insights into cardholder spending habits in a split-second.

Dubbed MasterCard IQ, the core products include an authorisation and assurance tool. Authorization IQ uses the unique and historical behavior of the card to predict and assess risk against a current transaction. The Assurance kit enables the exchange of information from the merchant about the particular circumstances of a transaction to help provide a more nuanced risk score.

Research by Javelin shows that the value of false declines per year has hit $118 billion, more than 13 times the total amount lost annually to actual card fraud ($9 billion). Not only are such refusals more likely to hit more affluent consumers who spend more on big ticket items, they also have a negative rebound in customer attitude towards the bank and merchant.

“While the industry has relentlessly worked to reduce fraud, some of these efforts have resulted in an increase in transactions being needlessly declined,” says Ajay Bhalla, president of Enterprise Security Solutions, MasterCard. “Nobody likes being falsely accused of something. Our IQ products leverage technology and insights to deliver merchants and consumers a convenient, uninterrupted checkout experience.”
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Comments: (5)

A Finextra member
A Finextra member | 19 February, 2016, 13:16

As part of MasterCard's API capability for placing more control into the hands of the cardholder .... Mastercard should allow the cardholder to "block-off" vacation dates by geo-location....try to reduce false positives from fraud alerts while on vacation ... saves the phone call to CSR's etc etc

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A Finextra member
A Finextra member | 19 February, 2016, 15:44

The cencept is working well for CommBank ....

We give you the inside track on attitudes to credit card spending and security, to help you make the most of Lock, Block and Limit.

To help you take advantage of Lock, Block and Limit, we spoke to 1,000 Australians about their attitudes to credit card spending and security.

Whether it’s more control over everyday spending, instant access to security settings or simply the ability to block certain transactions, it’s clear from our research that Australians want more control over their credit card.

Some of the key insights include:

  • Overall, 80% of Australians would like more control over the security of their credit card.
  • 75% say they would feel more secure about using their credit card if they could block transactions processed outside of Australia while they’re not overseas.
  • When asked about managing everyday spending, 58% of Australians said they would find it useful to be able to set a transaction limit on their credit card.
  • On cash advances, 66% say they never withdraw cash using their credit card, and 70% would feel more secure if they could block ATM cash advances completely.

It’s clear then that while Australians like using their credit cards, there’s a need to provide more access to card security and spending management tools.

Using Lock, Block and Limit

As part of our commitment to help improve and enhance your financial wellbeing, we’ve launched Lock, Block and Limit.

Lock, Block and Limit gives you a safer way to pay with features like the ability to instantly lock your credit card from overseas purchases, block ATM cash advances and set your own spending limits.

See how Lock, Block and Limit can give you unprecedented control over your credit card security in our handy how-to video.

 

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 19 February, 2016, 17:45

"Research by Javelin shows that the value of false declines per year has hit $118 billion, more than 13 times the total amount lost annually to actual card fraud ($9 billion)."

“While the industry has relentlessly worked to reduce fraud, some of these efforts have resulted in an increase in transactions being needlessly declined,”.

I suspected something like this when I wrote Mitigating Fraud Does Not Pay The Bills

But I didn't dream that the revenue loss would be 13X of fraud loss.

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A Finextra member
A Finextra member | 19 February, 2016, 22:35

Katharaman ...that's a valid point ... "its the transactions that didn't take place" anything we can do to complete a valid transaction only serves to increase revenues and customer satisfaction ... Like I said vacation false positives are a real pain ... and yes they can be prevented with intelligent API's ...

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A Finextra member
A Finextra member | 20 February, 2016, 19:19

A number of customer card controls have been discussed on this story link

https://www.finextra.com/newsarticle/28466/uk-hits-10-year-chip-and-pin-anniversary

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