Protecting small businesses against fraud with data and AI

It’s commonly known that the COVID-19 pandemic saw an increase in internet sales. In the United States, digital payments grew by 14% in 2021. U.S. e-commerce has increased by more than 50% since 2019. There are currently more than $5 billion in digital transactions worldwide each year. These figures are startling, but the tale is well known: the transition from physical to digital payments is underway.

Perhaps less widely known is the related increase in fraud involving digital payments. As more small businesses enter the world of e-commerce, fraudsters have found new ways to take advantage of their weaknesses. 62 percent more ransomware attacks were reported in 2021 than in 2020, and 90 percent of all fraud today is “card not present” fraud, up 6 percent from 2019.

Payments networks are under enormous pressure to protect the transactions of people, companies, and governments in the face of these threats, and Visa is stepping up to the plate. The payments solutions provider, which has access to more data than all of its rivals combined, employs 1,000 full-time cybersecurity experts to guard Visa’s network from malware, “zero-day assaults,” and insider tracks while simultaneously checking customer systems for unusual activity.

According to Paul Fabara, chief risk officer of Visa, “we engage directly with our clients to make sure we have the greatest information to understand their specific vulnerabilities and then develop a plan of action that is acceptable for them.”

Due to Visa’s continued efforts, which have seen the business invest $9 billion in fraud protection over the last five years, the corporation now has historically low fraud rates of just seven cents for every $100 in network transactions. Trust has been at the centre of what Visa does for the past 60 years or more, according to Fabara. It is the most significant strategic asset we have. To ensure that we have the most secure payments network on the planet, we spend a tremendous amount of time, effort, and money.

ASSISTING SMALL BUSINESSES IN ACCESSING THE DIGITAL ECONOMIC

By creating online transaction solutions and encouraging community participation, Visa is committed to protecting against fraud as well as boosting small companies and local economies. The corporation pledged in 2020 to make digital payments available to 50 million small companies worldwide. The programme acknowledges that small enterprises, which comprise more than half of all employment worldwide, are crucial to reviving and sustaining the global economy after the pandemic. Visa has assisted more than 30 million small companies accept digital payments as of April this year, empowering business owners and staff while also addressing the changing needs of a client base that is shifting more and more toward digital.

In the next ten years, more than half of consumers (53 percent), according to Visa’s 2022 Global Back to Business Study, expect to only use digital payments. Sixteen percent of people have already stopped using cash. There is no doubt that small businesses have a strong incentive to accept digital payments, but doing so presents difficulties that many business owners haven’t faced previously. These range from the simple, like matching the shipping and payment addresses, to the more complex, like keeping track of who has access to their systems. At every stage of the payment process, scammers are searching for weaknesses.

To assist businesses in retaliation, Visa’s cybersecurity specialists employ a wide variety of instruments and strategies. For instance, internal engineers test various methods for breaking into payment systems, revealing weaknesses that may subsequently be fixed. In 2021, fraud prevented by vulnerability testing alone will save clients roughly $31 million. The depth of our modelling and the breadth of our data allow us to support typical transactions while preventing potentially hazardous ones, according to Fabara.

USING CURRENT-DAY TECHNOLOGY

The adoption of artificial intelligence, which among other things is capable of predicting the weak points of networks, has been a crucial component of Visa’s cybersecurity efforts. With more than 60 different AI capabilities, the company has invested more than $500 million in data infrastructure and artificial intelligence, making fraud detection much more effective than it would be with manual procedures. According to Fabara, a technology called Visa Advanced Authorization, which is mostly powered by AI, helped stop an anticipated $26 billion in fraud in 2021. Another product called Visa Account Intelligence also used AI to stop an attempted customer fraud that cost roughly $2.2 billion.

Another key technique in Visa’s antifraud arsenal is tokenization, which swaps out cardholder information with a special identifier for each contact. For instance, the company’s new tokenization technology, EMV 3DS, which is available in Europe, has contributed to a 28 percent decrease in card-not-present fraud among the businesses who utilise it.

Fabara is well aware that as cybersecurity efforts advance, so will the tactics used by those seeking to exploit the world of digital payments. The same tools that we have are available to criminals, he claims. We’ll keep investing because this is an endless battle to ensure our consumers’ safety and security.

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