Visa using AI to stop fraudsters in their tracks

Score one for Visa in the fight against payments fraud. The company credits its investments in fraud fighting tools, like artificial intelligence and machine learning tools, for protecting consumers from scammers.

And its just-completed acquisition of Featurespace, a developer of real-time AI payments protection and mitigation technologies, promises to thwart even more fraud. Visa said it plans to add Featurespace's capabilities to its range of fraud protection and risk-scoring tools over the coming months.

Visa has been investing heavily in fraud prevention tools – $11 billion over the past five years, the company said in a press release. It added that these tools, which include AI and machine learning capabilities, have been put to the test this holiday season.

Visa noted that on Cyber Monday, alone, it blocked 85 percent more suspected fraud globally than it did on Cyber Monday 2023. The company added that it was able to block $40 billion in suspected fraudulent transactions last year.

"Although crooks are using AI more and more, so are we. And that's paying off," said Paul Fabara, chief risk and client services officer at Visa. "Visa continues to thwart more attempts at fraud from these bad actors, continuing our mission to be the safest way to pay and be paid for everyone, everywhere."

Among the tools Visa has been using this holiday shopping season is Visa Account Attack Intelligence Score, which leverages generative AI to stop fraudsters at the point of sale, whether that's online or in-store.

Consumer vigilance

In November 2024, Visa released its annual Holiday Threats Report, highlighting scam trends consumers should be aware of, and providing tips for safe shopping.

In the report, Visa stated it expects fraudsters to try and up their games this holiday shopping season. For example, Visa added, it expects an increase in fraud related to in-demand goods and services. Visa identified five schemes in particular, and steps consumers can take to fend off fraudsters.

The five schemes are:

1. Phishing and social engineering, which actually are at the root of most scams these days.

2. Scam (fake) merchants. (Visa said it identified a 284 percent increase in fake and spoofed merchant websites over the space of about four months this summer.)

3. Holiday travel scams, such as non-existent holiday rentals and spoof airline offers of bargain basement fares.

4. Malicious holiday apps that imitate legitimate apps, like "tracking Santa." "Thoroughly research and vet any apps you decide to download," Visa advised.

5. Physical thefts. Scammers are stealing payment cards and phones from consumers in crowded malls, stores and parking lots. They also continue to place card skimming devices on terminals to steal payment card data.

Featurespace will boost fraud fighting functionality

Visa affirmed that its just-completed acquisition of Featurespace will provide merchants with enhanced real-time fraud protection services to help keep their businesses safer and more secure. And this will be accomplished without adding friction to the user experience, Visa stated.

"Both our companies have been at the forefront of using AI to solve longstanding challenges and pain points in the payments industry," said Antony Cahill, president of value-added services at Visa. "Together, we will offer a valuable combination of cutting-edge technology and industry expertise to help our clients continue to grow amidst an increasingly complex threat landscape."

Dave Excell, Featurespace founder, added, "We developed our innovations to help crack even the most complex fraud cases. As part of Visa, we will be able to set a new standard in AI-powered fraud prevention."

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