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Mastercard is teaming up with Microsoft to improve online shopping

The goal is to reduce merchant losses while improving the consumer experience

MasterCard on keyboard
Photo (c) istanbulimage - Getty Images
Online shopping is convenient for consumers, but criminals like it too. Since they don’t need to physically possess a stolen credit card, they can easily make what appears to be legitimate purchases if they have a consumer’s credit card information, which is often bought and sold on the dark web.

To combat the problem, Mastercard is teaming up with Microsoft on a new technology to more easily verify that the purchaser is who they say they are. The companies say merchants will lose less money to fraudsters and consumers will enjoy a more seamless transaction experience.

According to the companies, a digital fraud that has emerged in recent years is “first-party fraud.” That’s when a legitimate purchase is made online but then later disputed. First-party fraud is estimated to cost merchants worldwide as much as $50 billion.

"Shopping online should be simple, quick and secure but that isn't always the case,” said Ajay Bhalla, president, Cyber and Intelligence at Mastercard. “We're committed to developing advanced identity and fraud technology to help enhance the real-time intelligence we provide to financial institutions around the globe. This builds on our longstanding commitment of working across the industry to provide advanced technologies that enable trust, and help build a safe and thriving digital ecosystem for all."

Digital Transaction Insights

Mastercard says it has already taken steps in that direction. It has combined its Digital Transaction Insights solution with next-generation authentication that allows for real-time decision-making.

That system links Mastercard's network insights with the merchant's own data to confirm that the consumer is who they claim to be. It also provides financial institutions with additional intelligence needed to optimize their authorization decisions.

For consumers, it could mean fewer texts from their credit card company asking if they made a particular purchase. Mastercard says Digital Transaction Insights is already used across a wide range of online checkout functions, from click-to-pay transactions to digital wallets.

Microsoft brings its Dynamics 365 Fraud Protection to the table. Its proprietary risk assessment leverages adaptive AI to enable real-time fraud detection by identifying risky behaviors.

According to Microsoft, this will help credit card issuers make better decisions when it comes to requests for authorizations, chargebacks, and refunds. The result, it says, is a smoother process for consumers and fewer losses for merchants.

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