While global fraud rates across the Visa payment system remain near historic
lows – less than 6 cents for every $100 transacted – fuel pumps can be targets
for criminals because they are often self-service terminals.
Florida in particular, has become a haven for thieves looking to access consumer debit and credit card numbers from transactions at the pump. According to a
press release, the new solution, Visa Transaction Advisor (VTA), enables
merchants to use real-time authorization risk scores to identify transactions
that could involve lost, stolen or counterfeit cards. A pilot test of the new
service showed a 23% reduction in the rate of fraudulent transactions.
The service works by analyzing 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 each time a card is swiped at the pump.
This allows merchants to identify those transactions with a higher risk of fraud
and perform further cardholder authentication before gas is pumped.
“The National Association of Convenience Stores (NACS) welcomes all innovations that can mitigate the risk of accepting cards
at the fuel island,” said Conexxus Executive Director Gray Taylor. He pointed out that
while theft of card data at the island garners more headlines, there has been
little public attention to the fraudulent use of cards at the fuel pump.
drive-offs, a fraudulent chargeback can wipe out the gross profit on a thousand
gallons of fuel sales, forcing the industry to raise prices to consumers, just
like any other cost of doing business. While NACS believes that PIN
authentication is a far better solution, any innovation that lowers fraud cost
and risk is a good thing,” Taylor said.
According to the Wall Street Journal, a pilot test of predictive analytics software from Visa helped reduce fraud at Chevron gas pumps by 23% over a two month period.