The rise of online transactions during the COVID-19 pandemic has been well documented. In 2021, digital payments increased by 14% in the U.S. Since 2019, U.S. e-commerce has grown by more than 50%. The amount of money that changes hands digitally each year around the world is now north of $5 billion. These numbers are staggering, but the story is familiar: Payments are undergoing a revolution from physical to digital. Less well-documented, perhaps, is the corresponding rise in digital payments fraud. As more and more small businesses have taken the leap into e-commerce, fraudsters have discovered more ways to exploit their vulnerabilities. Reports of ransomware attacks increased 62% in 2021 compared to 2020, and today, “card not present” fraud accounts for 90% of all fraud globally, a 6% increase since 2019. In the face of these dangers, payments networks have a huge responsibility to safeguard the transactions of individuals, businesses, and governments—and Visa is rising to the challenge. With access to more data than its competitors combined, the payments solutions company employs 1,000 full-time cybersecurity specialists to protect Visa’s network from malware, “zero-day attacks,” and insider tracks, while also scanning customer systems for suspicious activity. “We work directly with our clients to make sure we have the best information to understand their specific threats, then customize a plan of action that is suitable for them,” says Paul Fabara, Visa’s chief risk officer. Visa’s ongoing efforts—the company has invested $9 billion in fraud protection during the past five years—have resulted in historically low fraud rates: just seven cents for every $100 transacted on the company’s network. “Visa has put trust at the heart of everything we do for the past 60-plus years,” Fabara says. “It’s our most important strategic asset. That’s why we invest an incredible amount of time, effort, and money to make sure we have the safest payments network on the planet.” CONNECTING SMALL BUSINESSES TO THE DIGITAL ECONOMY Visa’s commitment to fraud protection goes hand in hand with its dedication to lifting up small businesses and local economies by building online transaction solutions and incentivizing neighborhood support. In 2020, the company announced a commitment to enable digital payments for 50 million small businesses around the world. The initiative recognizes that small businesses, which account for more than half of global employment, have a vital role to play in jumpstarting and maintaining the post-pandemic economy. As of April of this year, Visa has helped more than 30 million small businesses accept digital payments, empowering business owners and employees while also meeting the evolving needs of an increasingly digital-leaning customer base.” According to Visa’s 2022 Global Back to Business Study, more than half of consumers (53%) say they expect to use only digital payments within the next 10 years. About one in six (16%) have already gone cashless. Clearly, small businesses have a huge incentive to enable digital payments—but doing so comes with challenges many business owners haven’t encountered before. These run from the mundane, like matching payment address to shipping address, to the more technical, such as maintaining control over who has access to their systems. Meanwhile, fraudsters are on the lookout for vulnerabilities at every step in the payment process. Visa’s cybersecurity teams use a broad arsenal of tools and tactics to help businesses fight back. For example, in-house engineers experiment with ways to hack into payment systems, exposing vulnerabilities that can then be patched up. Vulnerability testing alone saved clients about $31 million in prevented fraud in 2021. “The extensiveness of our data combined with the breadth of our modeling allows us to help normal transactions go through while stopping potentially harmful ones,” Fabara says. LEVERAGING CUTTING-EDGE TECHNOLOGY A key part of Visa’s cybersecurity efforts has been its embrace of artificial intelligence, which can predict the vulnerable parts of networks, among other capabilities. The company has spent north of $500 million in AI and data infrastructure, giving them more than 60 different AI capabilities that make fraud detection far more efficient than by manual processes. According to Fabara, Visa Advanced Authorization, largely powered by AI, helped prevent an estimated $26 billion in fraud in 2021, and another tool, Visa Account Intelligence, leveraged AI to prevent about $2.2 billion in a single incident of attempted client fraud. Tokenization, which replaces cardholder information with a unique identifier for each interaction, is also an important tool in Visa’s antifraud tool belt. For example, the company’s new tokenization technology, EMV 3DS, available in Europe, has helped account for a reduction in card-not-present fraud by 28% among the companies who use it. Fabara is well aware that as cybersecurity efforts become more sophisticated, so will the schemes of those looking to take advantage of the digital payments economy. “Criminals have access to the same tools that we do,” he says. “This is a never-ending war, and we’ll continue to invest in order to maintain the safety and security of our customers.”
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Rasmus Hougaard is the founder and managing partner of Potential Project. In 2019 he was nominated by Thinkers50 as one of the eight most important leadership thinkers in the world. He writes for&
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