Visa Advanced Authorization Anti-Fraud Technology in Latin America

"Security is one of the fundamental reasons why millions of consumers prefer credit and debit cards to cash and checks," said Alejandro Estrada, Head of Risk of Visa Inc., Latin America and Caribbean Region. "Visa is committed to investing in innovative technologies that fight fraud and protect cardholders. Visa Advanced Authorization adds another layer of security in Latin America and the Caribbean, and ensures increased cardholder confidence with each Visa payment card purchase."

With Visa Advanced Authorization, an account’s transactions are assessed for the probability of fraud. Based on that information, Visa generates risk scores and risk condition codes to indicate the degree of risk associated with a given transaction. Each risk score is calculated using predictive fraud models and exclusive, patent-pending analytics.

Card issuers are then provided the risk information from Visa Advanced Authorization in each authorization request as it passes through the Visa network. The system evaluates the data associated with the purchase, assessing both the account level risk and the event level risk derived from all Visa transactions throughout the entire system. Along with the risk score a Compromised Account Risk Condition Code and Compromised Event Reference ID may be assigned providing descriptive information about high-risk events across the Visa network. With this information, the bank is then better equipped to approve, defer or decline the transaction in real time or further investigate it via case management.

Visa Advanced Authorization has been piloted within the Latin America Region since November 2007 using a model that is unique to the Latin American market. With more transaction information, the model gets “smarter” and better able to detect fraud. In fact, after a recent update to the fraud model, Visa Advanced Authorization identified $82.6 million potential fraud savings annually, an improvement of $14.1 million from the prior Latin American model.

This new technology is now available to every financial institution in Latin America and the Caribbean that is part of the Visa network. Visa Advanced Authorization can be applied to all of the Visa credit and debit card purchases made in the Region as well as cross border transactions as long as they are processed through VisaNet®. Visa Advanced Authorization is designed to be used as a stand alone risk tool or as a complement to other down stream risk management tools a card issuer may already have in place. There is minimal infrastructure or workstation modification needed because the risk information is included in the authorization message. Banks can begin using the service through a subscription model. It is also offered as a turn-key solution relying on an optional complementary service called Visa Risk Manager that allows for real-time decision-making and case-management rules upon which the Visa network will act on issuers’ behalf. The Visa Risk Manager functionality is delivered through a web-based tool providing easy access for all card issuers.

Visa has been a leader in the industry in combating fraud and identity theft for more than a decade. Visa has led the payments industry with a series of initiatives to combat fraud and protect consumers. These include Verified by Visa, state-of-the-art neural networks, and the Account Information Security Program (AIS).