Ajay Bhalla, MasterCard

Ajay Bhalla, MasterCard

MasterCard has unveiled its MasterCard IQ series that uses real-time intelligence to tackle fraud and the increasing number of false declines.

The plan is for cardholders and merchants to see a reduced number of transactions unnecessarily declined, while maintaining the “highest levels” of security.

Javelin Strategy & Research estimates that one out of every six cardholders experienced at least one decline because of suspected fraud in the past year.

Ajay Bhalla, president of enterprise security solutions, MasterCard, says: “Nobody likes being falsely accused of something. Our IQ products leverage technology and insights to deliver merchants and consumers a convenient, uninterrupted checkout experience.”

The MasterCard IQ series will include two core products providing insights into cardholder spending habits in a “split-second”:

  • Authorisation IQ – provides issuers with segmented account spending insights to help them make more informed authorisation decisions. “Unique” and historical behaviour of the card is used to predict and assess risk against a current transaction, decreasing false declines.
  • Assurance IQ – enables the exchange of “vital” information from the merchant about the circumstances of a transaction. This enables MasterCard to provide a blended risk score about the transaction to the issuer.

The value of false declines per year has hit $118 billion – more than 13 times the total amount lost annually to actual card fraud ($9 billion), according to Javelin research.

More “affluent” cardholders account for half of all false declines, as they “tend to spend more, more often, especially when traveling”.

If falsely declined, MasterCard says cardholders tend to change attitudes around the card and retailers; 39% abandon that card after a false decline, while a quarter decrease card usage. In addition, 32% say they plan to stop shopping at the retailer where they were declined.