To help financial institutions respond to the growing sophistication and speed of debit card fraud attacks, PULSE, one of the nation's leading debit/ATM networks, has implemented a major upgrade to its DebitProtect Fraud Mitigation Service and introduced an optional fraud blocking service.
The enhanced system allows transactions to be blocked in real time, enabling PULSE participants to respond faster to suspected fraud before more fraud is perpetrated on a card, thus reducing losses and decreasing cardholder impact.
Payments fraud is a constant threat and remains a concern for both financial institutions and consumers. The annual Debit Issuer Study, commissioned by PULSE, finds that financial institutions consistently rank debit card fraud among their top two concerns. One out of every five debit cardholders in the U.S. has experienced fraud on their card in the last five years, according to a 2012 study by ACI Payment Systems and Aite Group. The Federal Reserve Board estimated U.S. debit card fraud losses to be $1.38 billion in 2011.
The DebitProtect fraud mitigation system was first launched across the PULSE network in 2007. Since that time, PULSE has continued to refine DebitProtect and invest in state-of-the-art processing technologies. The company also has made strategic investments in personnel to provide custom fraud consulting services to help financial institution participants reduce the risk of fraud losses.
PULSE collaborated with Hewlett-Packard (HP) and Retail Decisions (ReD) on the DebitProtect upgrade. PULSE deployed the ReD PRISM® software solution, implemented on HP NonStop servers. The initiative received the 2012 HP Alliance ONE Partner of the Year Award for Innovation.
DebitProtect operates in milliseconds, evaluating transactions in flight, detecting high-risk transactions and alerting card issuers in seconds, often before the cardholder has left the terminal.
"This technology leap was necessary because fraud sophistication and speed are increasing, with fraud cycles becoming shorter, more varied and harder to detect," said George Danforth, PULSE vice president, Emerging Products. "DebitProtect uses unique PULSE data, scoring and analytics to monitor debit transactions at ATMs and the point of sale and adds an additional layer of fraud detection to those provided by processors and in-house systems."
Financial institutions also can take advantage of the optional PULSE DebitProtect Authorization Blocking service, enabling them to more effectively detect, block and manage debit card fraud. The comprehensive service includes not only real-time alerting, blocking and card autoblocking, but also a comprehensive suite of services including expert fraud consultation, rules pretesting and analytics, and 24x7 service response. DebitProtect Authorization Blocking leverages all of the technical advances of the new core processing platform in one fully integrated system and program.
"We have found DebitProtect to be a very valuable service, giving us a better overall view of our cardholder activity - normal and suspicious - to more effectively mitigate fraud risks for the bank," said Michael Lindsey, senior vice president of BancorpSouth. BancorpSouth was one of the financial institutions that participated in an extensive beta testing program of the enhanced DebitProtect. "The real-time transaction blocking feature, in particular, has limited our fraud losses in many situations. Now that we have DebitProtect, I don't know how we could do without it."
In addition to the enhanced fraud detection service and new Authorization Blocking option, financial institution participants may use an optional service that includes the development of custom rules specific to their organization. This helps minimize the impact of false positives on cardholders.
"DebitProtect uses a layered approach to uncover fraud that might go undetected by other fraud systems," said Eric Lillard, PULSE vice president, Fraud Services. "Our team of experienced fraud analysts evaluates the breadth of transactions made daily and attacks across multiple institutions registered for the service."
The DebitProtect system and Authorization Blocking service includes a new web portal with a host of features to enable issuers to manage a comprehensive fraud mitigation program. These services are available to all institutions that participate in the PULSE network.