MasterCard card issuers now have the option to use
MasterCard's new machine-learning based transaction-approval tool.
Called Decision Intelligence, it determines whether a
transaction is a legit purchase for that card account with "sophisticated
algorithms" that evaluate the purchase type, the cardholder's purchasing
habits and the transaction location, merchant, date and time, as well as the
mobile device if a mobile wallet is used.
Card issuers will pay a fee for the service, but a
MasterCard spokesperson did not say whether it will be per transaction.
The tool not only reduces the potential for
fraud, but also minimizes false declines, according to MasterCard. Al Pascual—senior
vice president, research director and head of fraud and security for Javelin
Strategy & Research—said, "We estimate that in the U.S. alone, the
value of false declines is more than 13 times the total amount lost to actual
card fraud."