New Visa service to help gas station retailers reduce fraud at the pump – fraud rate dropped more than 20% in pilot test

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. 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 percent reduction in the rate of fraudulent transactions – all without costly infrastructure upgrades or disruption of the customer experience.

How It Works
After a cardholder inserts the card at the pump, Visa analyzes 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. This allows merchants to identify those transactions with a higher risk of fraud and perform further cardholder authentication before gas is pumped.

The time and costs associated with resolving fraudulent transactions can be substantial for both merchants and financial institutions and inconvenient for cardholders, which is one of the reasons why fraud prevention is critical. Visa’s solution is easy to implement – using existing message fields and formats as well as pump software or hardware to ensure minimal impact to merchants and acquirers.

Several fuel merchants who piloted the technology over the last several months noticed a decrease in fraud, without negatively impacting their consumers’ experience.

“We are excited about VTA as a tool to help mitigate fraudulent transactions. We saw a 23 percent reduction in the rate of fraudulent chargebacks during our Los Angeles pilot program,” said Gabriel Andres Porras, Merchant Acquiring Manager, Chevron. “This was done with minimal impact to the customer experience, making secure payment at the pump as convenient as possible.”