Defending Against Payment Fraud with AI
In early 2023, payment fraud reached unprecedented levels, prompting e-commerce, retail, and mass merchants to turn to AI-driven fraud prevention systems as their primary defense. Visa’s latest Biannual Threats Report, released today, sheds light on the alarming surge in ransomware attacks and cryptocurrency theft. It also underscores the critical role AI plays in staying ahead of cyber attackers.
Rising Threats
Visa’s report reveals that March 2023 witnessed a staggering 91% increase in ransomware attacks compared to February, with nearly 460 attacks worldwide. Additionally, fraudsters exploited smart contract vulnerabilities to steal over $1.3 billion in cryptocurrency in early 2022. Enumeration attacks rose by 40% in recent months, with 58% of fraud investigations involving online merchants. E-commerce remains a top target, surpassing brick-and-mortar retailers by a significant margin.
The AI Advantage
Fraudsters are evolving their tactics, leveraging AI tools to create more lethal and sophisticated attacks. The report highlights “FraudGPT,” a new generation of attack tools available on the dark web. Gaming companies, in particular, are witnessing a surge in Account Takeover (ATO) attacks, driven by advanced AI strategies. Real-time approval of small transactions is crucial for businesses, and AI-based fraud systems excel at instantly analyzing transactions, assessing their legitimacy based on extensive data points.
- AI’s Role in Fraud Prevention
- Visa’s Ongoing Investments in AI
- Visa’s Response to Fraud Incidents
“While we are pleased by the lower-than-expected fraud rate over the last few months, this edition of the Biannual Threats Report continues to underscore just how savvy fraudsters continue to be,” emphasized Paul Fabara, Chief Risk Officer at Visa. The report showcases Visa’s commitment to combating fraud through AI-powered tools and techniques.
Visa’s AI-Powered Defense
Visa employs a suite of AI-based tools to combat payment fraud across various sectors globally. Their 24/7 Risk Operations Center leverages real-time telemetry data for transaction monitoring and threat analysis. Over the past six months, the center responded to nearly 2,000 fraud incidents, preventing over 53 million fraudulent transactions worth $32 billion.
Visa’s substantial investments in AI, including $500 million in artificial intelligence and data infrastructure, have bolstered cybersecurity and
