Mastercard adds Microsoft identity tech for fraud detection

Mastercard has steadily added non-payment services as part of its attempt to diversify its revenue sources beyond transaction fees, using a series of tie-ins with Microsoft to power some of the technology.

The card brand on Monday launched a product that makes use of Microsoft’s artificial intelligence in an effort to balance security risk with user experience. The move comes as both Visa and Mastercard build larger product menus that place the card brands in a position of technology provider and consultant to merchants as alternative payment rails such as account-to-account transfers pressure traditional card interchange revenue.

Mastercard has updated its Digital Transaction Insights product to use data from merchants data to confirm the consumer’s identity. The upgrade is designed to more easily and quickly provide information that card-issuing financial institutions can use to authorize and approve payments, as well as inform decisions on chargebacks and refunds. Digital Transaction Insights is used to vet identity for click-to-pay transactions, digital wallets, in-app purchases and wearables.

Microsoft will integrate its fraud fighting tech with Mastercard’s identity system.

Luke Sharrett / Bloomberg

The Microsoft integration adds fraud-assessment technology that uses AI to identify risky behaviors across purchases, accounts and interactions. AI has become an integral part of how financial institutions identify risky transactions early while accommodating the speed required for omnichannel shopping and digital payments. Banks, for example, are investing in AI to analyze thousands of data points over different networks to manage risks for laundering and other fraud in a manner that humans cannot accomplish without the technology.

“Shopping online should be simple, quick and secure. But that is not always the case,” Ajay Bhalla, president of Cyber ​​and Intelligence at Mastercard, said in a release.

Mastercard has worked with Microsoft for the past several years, including a 2021 project in which the two companies worked on cloud research, augmented and virtual reality and new user experiences for consumers, companies and governments. Mastercard and Microsoft have additionally collaborated on small-business payments and anti-hacking strategies.

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