MasterCard Moves to Protect and Expand Card Use

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  • October 10, 2017

Mastercard’s Early Detection System provides issuers with advanced alerts for cards and accounts at a heightened risk of fraudulent use based on exposure in security incidents, such as the Equifax breach.

It can take as little as nine minutes for hackers to use stolen data posted to the dark web, according to Mastercard. Knowing that not all compromised accounts become fraud casualties and every second count, Mastercard developed Early Detection System to help financial institutions act faster, thus preempting more serious attacks.

Using Mastercard network insights, predictive capabilities and a combination of internal and external data sources, Early Detection System determines if a card or account is at risk and sends an alert to the issuer with a quantification of the level of risk. The issuer then uses the level of risk to more accurately prioritize what action to take, from monitoring transactions more closely to issuing a replacement card.

“Knowledge is power, and this service helps issuers act significantly faster and with greater precision to stop potential fraud before it occurs,” Ajay Bhalla, president of enterprise risk and security at Mastercard said. “Our issuers can now proactively target the fraudulent activity resulting from previously breached or hacked data, helping them reduce costs and maintain the best possible cardholder experience.”

Early Detection System is available to issuers globally and captures all types of fraud across all transaction channels. The system identifies everything from active criminal trading of account data, to identification of cards tested prior to fraud use, to account data that appears at-risk but without sufficient evidence to declare an Account Data Compromise event. This provides issuers with alerts on a much broader set of at-risk accounts potentially 6 to 18 months ahead of traditional alerts.

Meanwhile, Mastercard signed a deal with PayPal Holdings to expand their existing partnership into Canada, Europe, Latin America and the Caribbean as well as the Middle East and Africa.

Following the recent expansion of their partnership into the United States and Asia Pacific, the addition of these new markets provides both companies an opportunity to serve customers jointly and globally.

Per the agreement, people using PayPal wallet will be able to pay using Mastercard. Moreover, consumers can choose Mastercard as their default payment method at checkouts. Consumers can also link cards with PayPal from a banking app through collaborations with Mastercard bank partners.

The deal requires Mastercard and PayPal to work together to capitalize on new Mastercard payment flow technologies to enhance value for Mastercard users, financial institutions, and customers of PayPal. Though this alliance, consumers are now able to quickly convert checks to cash in their PayPal accounts with the help of a Mastercard debit card.

With the Mastercard’s tokenization service, PayPal can now also expand its presence at the point of sale. Consumers can use the tokenized Mastercard in their PayPal Wallet for making in-store purchases at more than 6.5 million contactless-enabled locations throughout the world.

The deal also helps connect merchants who are processing payments via Braintree, a division of PayPal, which specializes in mobile and web payment systems for ecommerce companies.

About CCG Catalyst

Phoenix-based CCG Catalyst is a management consulting firm offering strategic advice to banks on innovation, more competitive transformation and industry disruption. The company advises clients on the direction of banking, development of the strategy and managing the disruption related to the execution of the tactics. CCG Catalyst leverages decades of deep industry experience to provide practical business strategies and organization, analytics and technology consulting for its clients. Its team delivers competence based upon proven experience in strategy, payments, organizational, optimization, technology, M&A and risk & regulatory compliance. For more information, visit the company’s website at www.ccg-catalyst.com.

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