Card fraud relief just a swipe away

NEW YORK - Visa USA has introduced technology to help thwart credit card fraud at the checkout line, after several high-profile thefts of customer data.

Visa said the Advanced Authorisation technology being rolled out across American member banks might cut fraudulent card use as much as 40 per cent by alerting merchants instantly to suspicious transactions.

More than 20 large- and mid-sized US banks, which process more than half of Visa USA's US$1.3 trillion ($1.97 trillion) of annual transactions, have been testing the technology in the past year.

"It was clear we needed to look more at fraud patterns," said Jean Bruesewitz, senior vice-president for processing and emerging products.

"In addition to looking at a single account and the behaviour of that account, we compare that account to others that have been exposed to events such as a data compromise or a hack."

Visa's 14,000-member financial institutions have issued more than 463 million cards to US cardholders.

Visa said that when a card was swiped, the Advanced Authorisation technology provided an instant rating of the transaction's potential for fraud, including whether the card was part of a reported security breach. The issuer could then tell the merchant whether to accept or decline the transaction.

The process took less than one-millionth of a second so customers should not notice any processing delays.

Visa said the technology might reduce its fraud rate to US$3 per US$10,000 of transactions from the present US$5 per US$10,000, cutting fraud losses by US$164 million over five years.

Bruesewitz said Visa might implement the technology worldwide. Its more than one billion cards generate more than US$3 trillion of annual transactions.

"This was built for US issuers," she said, referring to the technology. "But we are talking to other regions."

- REUTERS