MasterCard has quietly introduced a new system - MasterCard Online Fraud Monitor - this week. It's an advanced fraud detection and mitigation system designed to enhance security for PIN-based transactions.
Developed in collaboration with BasePoint Analytics, the software uses a risk-scoring approach to detect potentially fraudulent transactions in real time.
What's interesting about the model is that it uses advanced analytics to consider factors such as account spending, device level (ATM and EFTPOS) activity, and historical transactions, to calculate the likelihood of fraud on an individual card account.
At the moment the system is being rolled out on a trial basis across the US and around the world for MasterCard debit cards, but MasterCard says it will enter full service in the New Year.
The card company also says it is looking at expanding usage to credit cards if the system proves successful.
The reason for introducing the system on debit cards initially is that MasterCard claims that debit card fraud is increasing in double digit percentages each year - whilst debit card fraud is going down.
Scary stuff. I wonder when Visa will intro something similar for its cardholders...