Visa software tackles fraud at petrol pump

PATRICIA SABATINI
SEPTEMBER 26, 2014
PITTSBURGH POST-GAZETTE AAP
UNATTENDED petrol pumps are a favourite place for crooks to test stolen or counterfeit credit cards before going on a shopping spree.
NOW, Visa is trying to cut off the fuel supply.
The payment card giant is rolling out new software aimed at predicting whether it’s you or a thief trying to fill up at the pump.
The program uses some 500 pieces of data – including a cardholder’s transaction history and real-time reports on hot spots for fraud – to instantly flag high-risk transactions after customers swipe their cards.
Called Visa Transaction Advisor, the software produces a risk score ranging from zero to 99. The higher the score, the greater the risk of fraud.
If a threshold set by the petrol station operator is exceeded – say, getting a score higher than 60 – customers get a message at the pump asking them to complete the sale inside, where counter staff can ask for additional verification.
An analysis of the six-month-old service showed that fraudsters drove away after seeing the message, while legitimate customers went inside to pay, said Mark Nelsen, Visa’s vice president of risk products and business intelligence.
“We could see that when the card was rejected, and a subsequent transaction did not occur, that we could identify those that had fraud committed later on,” he said.
Most customers won’t notice the system because only a very small percentage of transactions – about one in 1,000 – should get flagged, he said.
So far, roughly 25,000 US petrol stations are using the technology, including Chevron and Shell, Nelsen said. Chevron had experienced a 23 per cent drop in card fraud at the pump during a two-month pilot test launched in late January, he said.
Over the next six to 12 months, Visa hopes to deploy its new technology in other locations, such as at unattended kiosks, Nelsen said. “We’ll look at what other places make sense.”
He said Visa did not have statistics on the incidence of fraud at the pump. But according to some analysts’ estimates, it’s three to four times higher than the average for other retailers.
Overall, card fraud remains near historic lows, Nelsen said, accounting for six US cents of every $US100 spent globally under the Visa brand.