Fraud has been a growing problem among American consumers. In fact, up to 10% of the American adult population falls victim to identity theft every year and as many as 80% of American-issued credit cards have already been compromised.
To protect consumers from fraud, acquiring banks are now considering artificial intelligence (AI) as one of their most essential tools in fighting fraud and helping merchants earn more profits in the process.
This has been a struggle for merchant accounts that lose revenue due to fraud, credit losses, and low transaction volumes. Some businesses are even forced to close out before they can recover from their losses. But how is AI playing a role in fraud prevention?
Role of AI in Fraud Prevention
- 75% of acquiring banks are now using AI to detect credit card transaction fraud and increase the security of their payment processing systems. According to some data, the use of AI hasn’t only helped merchants reduce cases of fraud but also increased their payment volumes over the last year.
- 69% of all acquiring banks use AI to keep track of merchants on their systems. This technology has enabled merchants to easily detect signs of fraud and flag them before the worst This has given both acquirers and merchants the power to stop fraudulent transactions in order to protect their consumers and their own business interests.
- AI-powered acquirers are more than twice as likely to report that this capability has been one of their biggest competitive edges over other providers. Merchants would prefer to transact knowing that their provider’s system is more secure than others and consumers also trust these merchants because they’re more protected. It’s a win-win situation for everyone involved in this process.
- 89% of acquiring banks that utilize AI for transaction monitoring outsource this service to a third-party provider. This is when it’s crucial to find the right provider that can plan, design, and implement an effective merchant monitoring system that will fit the needs of the bank.
- 88% of acquiring banks say that the use of AI in their merchant monitoring system is not only important in preventing fraudulent transactions but it’s also a “very” or “extremely” important factor to help merchants gain and maintain their profitability over the next year.
With all the benefits that AI is giving to acquiring banks, merchants, and consumers, there is now a growing interest in making the right investments in technology.
The presence of a strong AI-powered system alone is enough to help prevent huge losses due to fraud and identity theft and as a business, acquiring banks would want to give their clients that convenience.
It matters a lot to find reliable high-risk merchant account providers that offer these capabilities and other measures to ensure that both you and your consumers are protected against fraudsters.
It will also give better opportunities to grow your business, increase your profits and protect your credibility as a business.