How Visa employed artificial intelligence to check $40 billion in fraud as scammers also take to AI

Payments giant Visa is using artificial intelligence and machine learning to counter fraud, James Mirfin, global head of risk and identity solutions at Visa, told CNBC.

The company prevented $40 billion in fraudulent activity from October 2022 to September 2023, nearly double from a year ago.

Fraudulent tactics that scammers employ include using AI to generate primary account numbers and test them consistently, said Mirfin of Visa. The PAN is a card identifier, usually 16 digits but can be up to 19 digits in some instances, found on payments cards.

Using AI bots, criminals repeatedly attempt to submit online transactions through a combination of primary account numbers, card verification values (CVV) and expiration dates – until they get an approval response.

This method, known as an enumeration attack, leads to $1.1 billion in fraud losses annually, comprising a significant share of overall global losses due to fraud, according to Visa.

"We look at over 500 different attributes around [each] transaction, we score that and we create a score –that's an AI model that will actually do that. We do about 300 billion transactions a year," Mirfin told CNBC.

Each transaction is assigned a real-time risk score that helps detect and prevent enumeration attacks in transactions where a purchase is processed remotely without a physical card via a card reader or terminal.

"Every single one of those [transactions] has been processed by AI. It's looking at a range of different attributes and we're evaluating every single transaction," Mirfin said.

"So if you see a new type of fraud happening, our model will see that, it will catch it, it will score those transactions as high risk and then our customers can decide not to approve those