PULSE and FICO have been partners in the fight against debit fraud since 2018, when PULSE transitioned to its current DebitProtect® fraud-detection platform, powered by FICO® Falcon® Fraud Manager. The companies recently extended their collaboration, positioning PULSE to further evolve its suite of advanced fraud-mitigation solutions and enhance card-not-present (CNP) fraud detection.
The PULSE-FICO partnership benefits both organizations, as well as their clients.
“We meet frequently to discuss fraud trends,” said Jordan Schaefer, PULSE Director of Client Services. “This helps us remain aware of fraud trends impacting the PULSE Network and our clients, so we can serve as trusted advisors on fraud prevention, detection and risk mitigation.”
PULSE’s network-level implementation of FICO Falcon Fraud Manager also contributes significant fraud data back to the FICO fraud engine.
“Our Falcon Fraud Manager model benefits from the fraud learnings fed into it from PULSE’s large network of debit card issuers,” said Adam Davies, Vice President of Fraud at FICO.
Enhanced CNP fraud detection
PULSE has deployed FICO’s latest fraud model, which segments CNP transactions separately from card-present transactions. The model enables enhanced scoring, which improves the network’s ability to identify fraudulent transactions in e-commerce and other CNP channels. This capability is key as consumers continue to adopt digital-payment methods and fraudsters increasingly focus their efforts in this channel.
PULSE also has added the ability to deliver a transaction’s fraud score to the issuer in the online transaction message. This enables issuers to make real-time transaction decisions. In addition, we developed an automated process to detect, mitigate and communicate BIN attacks, which are targeted to CNP environments.
“Our enhanced fraud-detection and blocking capabilities have become more important than ever with the Federal Reserve’s Regulation II clarification.”
Jim Lerdal, PULSE Executive Vice President, Operations
PULSE’s network-level deployment of Falcon Fraud Manager employs learnings from the platform’s 9,000 participating financial institutions. Institutions using DebitProtect and DebitProtect Authorization Blocking for, respectively, fraud alerts and automated authorization blocking benefit from that dynamic data pool. This means that, when some merchants began routing tokenized transactions to non-card-brand networks after the Federal Reserve Board’s Regulation II clarification took effect, PULSE already had the infrastructure to score them based on a fraud model that equipped with learnings from tokenized transactions.
“Our enhanced fraud-detection and blocking capabilities have become more important than ever with the Federal Reserve’s Regulation II clarification expected to shift more card-not-present transaction volume to unaffiliated debit networks such as PULSE,” said Jim Lerdal, Executive Vice President of Operations at PULSE.
Responding to issuers’ focus on fraud
The 2023 PULSE Debit Issuer Study confirmed that debit issuers are heavily focused on fraud-prevention and mitigation efforts, with nearly 90% of survey respondents reporting increased impact of and attention to fraud in 2022. While 76% of respondents said they enhanced their fraud models last year to reduce fraud losses and false positives, other mitigation efforts included sharing and promoting educational materials with customers, enabling self-service capabilities, modifying rules and investing in authentication tools.