First-party fraud is serving as a first line of defense from payment networks, using data and AI to understand what is actually happening with a transaction and whether a consumer is starting a fraudulent dispute. It's clear.
Now imagine a cardholder disputing a legitimate charge to their account. master card is Posted online on Monday (March 18th) This issue may be associated with several scenarios. Consumers may honestly forget that a purchase was made. They may be confused about the details of what they are saying. Or here is where the fraud occurs. Customers may seek credit for transactions that were in progress and may seek to keep the goods and services they ordered and were provided.
Mastercard's first party trust program is It was announced in October, It is expected to be rolled out later this year. As noted at the time, the program employs “enhanced transaction insights,” artificial intelligence (AI), and risk modeling to combat friendly fraud, or first-party fraud.
Beyond cards and devices
Mastercard's Monday post noted that because consumers are using their cards on their own devices, it can be difficult to identify when first-party fraud is occurring. According to the payment network, the new program “provides merchants with a secure channel to submit relevant information as part of a MasterCard transaction.” When combined with Mastercard's network-level analytics, this data reveals insights into cardholders' purchase history and behaviors that may indicate first-party fraud. ”
Starting with an initial rollout in states this year, sellers will have the option to submit that data at the time of purchase or initiating a dispute. Mastercard said the advanced technology will “strengthen the detection of true third-party fraud and subsequent litigation against dishonest chargebacks.”
Separatelyand as detailed last year, Visa's Compelling Evidence 3.0 (CE 3.0) — changes to its dispute program announced last April — uses data to track established “footprints” between cardholders and merchants and Track key identifying fields that match across transactions and current transactions. argued.
As we reported last year, the key fields include the user ID, device ID, IP address, or shipping address of at least two non-fraudulent transactions that occurred between 120 and 365 days ago. These data points are used to prove the historical connection to the cardholder and the new transaction in question.
Other providers are also joining the fray. That same month, Mastercard launched the program Socure. announced independently Sigma First-Party Fraud and First-Party Fraud Consortium (FPFC), a first-party fraud solution; The consortium had more than 50 million active accounts at the time of its launch, but he said he aims to add 200 million more accounts.
Socure FPFC aims to detect and prevent first-party fraud by analyzing alternative data signals not typically tracked in traditional credit reports, Socure announced in October this year.
PYMNTS Intelligence Data (In Report) According to research from Dispute Prevention Solutions, 77% of sellers say the cost of fraud and disputed transactions is one of their biggest sources of dispute-related distress.
Additionally, 48% of merchants surveyed said they received dispute notices or warnings from card networks.
Additionally, as many as 20% of merchants use third-party data sharing services to prevent disputes.