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The holiday shopping season is a mixed blessing for Visa, a leading payments company. While the surge in transactions boosts sales, it also marks the start of increased cyberattacks aimed at stealing consumer data.
Visa’s Chief Risk Officer, Paul Fabara, explained that the holiday shopping period is prime time for fraudsters due to the rise in spending and transactions. Online shopping, in particular, sees a significant uptick and is a favorite target for cybercriminals.
Visa’s latest biannual threats report reveals that fraudsters are increasingly equipped with advanced tools, including artificial intelligence systems like ChatGPT, to automate and scale their malicious activities.
The integration of AI in both fraud and fraud prevention is creating a complicated battlefront. New technologies are being exploited by criminals to craft convincing phishing scams, develop undetectable malware, and manipulate victims on a large scale.
In response to these threats, Visa has heavily invested in AI-powered defense mechanisms. Over the past decade, Visa has poured over $3 billion into AI and data infrastructure to secure transactions and proactively prevent fraud. They currently operate several hundred AI models across more than 100 products.
These AI systems scrutinize transactions in real time, assessing up to 500 unique risk factors in just 300 milliseconds to detect fraudulent activity. Fabara mentions that ongoing AI innovations will enhance the decision-making capabilities of fraud prevention tools during the high-risk holiday period.
Despite the sophisticated AI systems in place, human intelligence remains crucial. Visa collaborates with clients and other stakeholders in the payments ecosystem, including merchants, to detect and investigate potential fraud.
Consumer awareness and vigilance are also vital. Fabara advises using multi-factor authentication, creating complex and unique passwords, and being alert to sophisticated phishing tactics.
With the explosive growth in e-commerce — a McKinsey report states that online sales have doubled in the past five years and will likely double again by 2026 — the stakes in this battle against holiday fraud are higher than ever. Nonetheless, with experienced leaders like Fabara at the forefront, Visa and its clients are well-prepared to tackle the challenges.