The promise of next generation of artificial intelligence, generative AI, allows us to imagine a future when vast swaths of human knowledge are used to solve any number of issues. In the ever-changing digital economy, this future has already arrived.
In particular, AI-powered tools are improving the approach to secure payments. With AI, patterns indicating fraud can be detected in seconds, allowing scammers to be caught before they have executed their schemes. Now, the use of generative AI gives merchants and their processors the upper hand in combating even more fraudulent transactions.
But criminals also have access to AI and are using it to refine their techniques as quickly as they can. Giving merchants every tool to safeguard against these techniques while ensuring seamless digital payments has never been more crucial.Merchants need cutting-edge tools and experienced, knowledgeable partners to make the best use of AI and keep their payments secure.
Collecting Data
Through large language model (LLM) AI tools like ChatGPT, AI has the potential to help payments providers not only combat methods of fraud that merchants have yet to imagine but also acquire, engage, and retain customers. By using LLMs and robust collections of data, generative AI models can predict fraud before it happens. Today, merchants already can use predictive AI in the areas of risk management, engagement strategies, and analytics to improve their profitability.
The key to building a powerful AI system, whether improving existing predictive AI models, or looking ahead at adopting generative AI techniques, is the massive amount of data required to make learning possible. In the payments landscape, that means assembling enough information to see patterns in fraud attempts, whether that is the language used or the origin of the transaction.
For more than 30 years, Visa has been employing AI to enhance its services and provide secure, seamless transactions for customers. With more than 100 unique models, Visa launched its global AI Advisory Practice, a suite of dedicated AI advisory services. The service is focused on providing insights and recommendations that will empower merchants to unlock the potential of AI and utilize generative AI effectively.
Measuring Up to Industry Standards
By implementing AI, both predictive and generative, merchants need knowledge and data of fraud schemes to stay ahead of potential threats. To that end, Visa also offers the Merchant Risk Intelligence Suite (VMRI), whichallows merchants to analyze their transaction data against industry benchmarks. The service provides relevant metrics, including authorization rates and fraud rates, so retailers can determine where they excel and where they might be falling short.
VMRI allows merchants to improve their authentication practices by putting more scrutiny on third-party purchases. They can also leverage technology such as tokenization to ensure more secure transactions. With this suite of AI-powered tools, Visa can help businesses increase their approval rates, reduce their fraud rates, and boost transaction activity and profits.
Beyond Fraud
As merchants leverage AI’s capabilities to safeguard against potential threats, they also can use the technology to explore other areas—some of which might not seem, at first blush, to be responsive to AI.
Consider rewards programs. Today’s consumers expect more than just traditional points-based benefits from their loyalty programs. They want to be rewarded for their purchases and loyalty and for their engagement with a brand. Retaining loyal customers depends on providing them with consistently positive experiences, particularly at the point of purchase, when the brand is top of mind. Experiencing the decline of a card because of unwarranted fraud suspicions will leave a bad taste in a consumer’s mouth.
Yet customers also expect their financial providers to protect them from unauthorized activity. Visa’s AI-powered tools can enhance customer security while reducing the number of false positives at checkout.
Another initiative that can help with customer engagement and retention is Visa’s Web3 Loyalty Engagement Solution. The service helps brands meet next-generation customers in the digital worlds where they increasingly live their lives, through immersive programs like gamified giveaways, augmented-reality treasure hunts, and new ways to earn loyalty points. By connecting Web2 with Web3 innovation, the program allows customers to apply rewards toward not only virtual experiences but also real-world ones.
Getting Started
Getting started with AI can seem intimidating, but the first step is to familiarize yourself with the different AI use cases – including when predictive AI can help, and the cases where generative AI is the better option. Organizations should look for use cases that align with their goals, and they may be surprised by how many they find. In addition to fraud prevention, AI can help in areas such as digital acquisition, loyalty enhancement, and the streamlining of operations.
Building a strong foundation in data infrastructure, governance, and transparency is also key. A robust set of data is an important step toward building out AI tools to help detect fraud and further customer engagement.
Finally, consider collaborating with an experienced payments network, such as Visa, that understands how AI benefits the entire payments ecosystem. Choose a partner that prioritizes data integrity and privacy and maximizes fraud detection while minimizing customer friction.
