Credit-card giant Mastercard aims to improve the online shopping experience and tackle digital fraud in a collaboration with Microsoft.

Delivering a frictionless shopping experience has become critical as retailers look to shift window shopping and price comparison visits to confirmed sales. And, while consumers enjoy the convenience of shopping online, fraudsters also seek to develop methods to use these same channels for ill-gotten gains.

One of the growing types of digital fraud is first-party fraud, where a legitimate purchase is made online but later disputed. First-party fraud is estimated to be a $50bn global problem.

Mastercard has directly addressed these needs by enhancing its Digital Transaction Insights with authentication and real-time decisioning intelligence capabilities. This pairs Mastercard’s network insights with the merchant’s own data to confirm the consumer is who they claim to be, providing financial institutions with the additional intelligence needed to optimise their authorisation decisions and approve more genuine transactions.

Digital Transaction Insights is used across a wide range of online checkout instances, from click-to-pay functionality and wearables to digital wallets and in-app purchases.

“Shopping online should be simple, quick and secure,” said Ajay Bhalla, president of cyber and intelligence at Mastercard. “But that isn’t always the case. 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.”

Microsoft will be the first partner to share its insights and integrate with the Digital Transaction Insights across several lines of business. Building on a long history of cross-collaboration, Microsoft’s Dynamics 365 Fraud Protection’s proprietary risk assessment, which leverages adaptive AI to assist in real-time fraud detection by identifying risky behaviour across purchase, account and in-store activities, has been integrated with Mastercard’s Digital Transaction Insights to enable real-time intelligence sharing in an easily consumable and actionable format.

This will enable issuers to enhance their decision-making processes for authorisations, chargebacks and refunds. Moreover, organisations can improve transaction acceptance rates with insights that help them balance profitability and revenue opportunities against fraud loss and checkout friction.

“We are excited to partner with Mastercard to leverage our cloud-native, cutting-edge fraud assessment tools to empower issuers and merchants to prevent more fraud and approve more genuine users,” said Charles Lamanna, corporate vice president at Microsoft. “This partnership lays the foundation for the future of global fraud prevention where data silos are no longer a barrier to security.” 

Digital Transaction Insights is enabled by EMV 3-D Secure and Mastercard Identity Check, a global authentication system built on the enhanced industry standard. Both elements support GDPR requirements and other related regulations. In 2021, Mastercard Identity Check delivered a 14% uplift in transaction approval rates across billions of transactions.