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Mastercard Takes the Fight to APP Fraud With AI-Powered Consumer Risk Tool

By leveraging AI-powered insights, global payments leader Mastercard is working with nine UK banks to identify real-time payment scams before funds leave a victim’s account.

Mastercard is taking the fight to the fraudsters with its new AI-powered ‘Consumer Fraud Risk’ solution, which is officially live in the UK.

All types of impersonation scams have fooled people and businesses throughout the UK in recent years, and continue to do so. To combat this type of fraud, Mastercard is utilising its latest AI capabilities, alongside its unique network view of account-to-account payments to help banks predict and prevent payments to all types of scams.

The nine banks working with Mastercard are Lloyds Bank, Halifax, Bank of Scotland, NatWest, Monzo and TSB. Mastercard revealed that large-scale payment data can help identify real-time payment scams before funds even leave a victim’s account.

TSB, one of the first banks to adopt the Consumer Fraud Risk tool, reported a significant improvement in its ability to detect fraud. In just four months, the bank has prevented enough scam payments that, if stretched over a year, would equate to around £97million saved across the UK – if its performance was matched by all banks.

Authorised push payment fraud

While this is a significant start for fraud prevention in the UK, ‘authorised push payment (APP) fraud‘ now accounts for 40 per cent of UK bank fraud losses. Estimates suggest that APP fraud could cost $4.6billion in the US and UK alone by 2026.

This type of fraud occurs when fraudsters convince individuals or businesses to send them money, thinking the transfer is to a genuine friend, supplier or buy what they believe to be genuine goods online.

Ajay Bhalla
Ajay Bhalla, president of cyber and intelligence at Mastercard

Ajay Bhalla, president of cyber and intelligence at Mastercard, explained why APP fraud remains so prevalent: “Banks have found these scams incredibly challenging to detect. Their customers pass all the required checks and send the money themselves; criminals haven’t needed to break any security measures.

“As we all live more digital lives this type of fraud erodes victims’ confidence to interact online. Our goal is to build and maintain that trust. Using the latest AI technology, we are helping banks identify and predict which payments are being made to fraudsters and stop them in real-time.”

Mastercard’s own AI-powered cybersecurity solutions have stopped over $35billion in fraud losses in just the last three years.

Paul Davis, director of fraud prevention at TSB, said: “Spotting fraudulent payments among millions made every day is like finding a needle in a haystack, with scams becoming ever more complex – so prevention and monitoring tools are key. Our partnership with Mastercard is providing the intelligence needed to identify fraudulent accounts and prevent payments ever reaching them.”


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