Using Visa’s Intelligent Analytics, Gas Retailers See a Reduction in Fraud
Visa Transaction Advisor has helped reduce lost and stolen fraud chargeback rates by 51 percent and counterfeit fraud rates by 54 percent
Visa Inc. (NYSE:V), the global leader in payments, reported on results of Visa Transaction Advisor (VTA), a service that extends the power of Visa’s global risk intelligence to fuel merchants, helping to reduce fraud at the gas pump. More than 35,000 gas stations are actively using the service in the U.S. On average, Visa Transaction Advisor users have seen fraud decline by more than half – a 54 percent decline in counterfeit fraud rates and a 51 percent decline in lost and stolen fraud chargeback rates.1
“Visa Transaction Advisor gives fuel retailers a tool for applying Visa’s real-time fraud insights to transactions at the gas pump,” said Mark Nelsen, senior vice president of Risk Products, Visa Inc. “The results we’re seeing in the fuel sector attest to the power of predictive analytics for many of our merchant partners. It’s an effective model for combatting fraud and one we hope to replicate with other merchant categories.”
There are several features unique to fuel retailers that make them an attractive target for today’s criminals. Outdoor pay-at-the-pump terminals are an ideal place for criminals to test the usability of stolen or counterfeit cards without the risk of interacting with a store employee. Because they can resell gasoline with little depreciation in value, criminal rings will often use fraudulent cards to purchase large quantities of gas, which they can sell to willing buyers for cash.
As part of the U.S. migration to EMV chip technology, fuel merchants are working to implement chip readers at fuel pumps which will protect against counterfeit card fraud. In the interim, while fuel merchants work on their plans to adopt chip, Visa Transaction Advisor provides a bridge solution, enabling merchants to identify and block high-risk transactions before being processed.
How it works
After a cardholder inserts the card at the pump, Visa analyzes multiple data sets such as past transactions, whether the account has been involved in a data compromise, and nearly 500 other pieces of data to create a risk score within milliseconds. This allows merchants to identify those transactions with a higher risk of fraud and perform further cardholder authentication before gas is pumped. Visa research has shown that when a fraudster is asked to go inside and see a store employee to complete a transaction, as a result of Visa Transaction Advisor, they will typically drive away instead.
Visa’s solution is easy to implement – it uses existing message formats, pump software and hardware to ensure minimal impact to merchants and acquirers. The implementation is typically done at the national brand level, requiring very little work from local franchise locations. The service, which analyzes more than 76 million transactions each month, has been successful among international, national and regional fuel retailers as well as smaller local businesses.
Visa has partnered with a number of U.S. acquirers to deliver the service and can also work directly with merchants to implement Visa Transaction Advisor as part of their fraud management system. Fuel brands that have implemented Visa Transaction Advisor have provided great feedback on its benefits:
- “Visa Transaction Advisor was easy to implement. We were able to set up the service quickly, using existing infrastructure, and saw immediate results,” said Gabriel Andres Porras, Merchant Acquiring Manager at Chevron. “This tool is helping to protect our business from fraudsters at more than 8,000 retail locations across the U.S.”
- “Visa Transaction Advisor provides an extra layer of security at our 15,000 service stations in the U.S.” said Mike Swillo, US Credit Card Operations Manager at Shell. “It seamlessly integrates with our other risk management strategies and provides added protection for merchants without inconveniencing our customers. We’re able to provide added security at our fuel pumps, which protects our customers, station operators and the brand.”
- “What makes Visa Transaction Advisor so effective is that it helps block criminals before they can even pick up the pump,” said Rich Steckroth, Director of Business Development at Sheetz, a chain with more than 500 convenience stores located in Maryland, North Carolina, Ohio, Pennsylvania, Virginia, and West Virginia. “This helps us to maintain a great customer experience while still managing for fraud.”
About Visa Inc.:
Visa Inc. (NYSE: V) is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world’s most advanced processing networks — VisaNet — that is capable of handling more than 65,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products.