Acquirers, processors, and payment facilitators (PayFacs) are grappling with a host of challenges involving risk—including sophisticated fraud attempts—that demand innovative solutions. These industry players must harness cutting-edge technologies to strengthen their risk management strategies and ensure the integrity of the payments ecosystem.   

In a recent PaymentsJournal podcast, Amyn Dhala, Chief Product Officer at Brighterion, a Mastercard company, and Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research, delved into the frustrations many are facing and the technologies they should consider to tackle these obstacles.

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The Overarching Challenges in Play

One can argue that the single most important thing within the payments space is the irrefutable ability of the transaction. For acquirers, processors, and PayFacs, that means the payments system has integrity and the controls in place to ensure the transactions are indisputable.

But that’s easier said than done. Many factors are attacking the system, and many players continually seek to disrupt it.  

“You have people that might go outside the bounds of their credit lines or their available credit and people gaming the system,” Riley said. “But having the fundamental controls there are really what distinguishes the payment process and an effective transaction through the whole system.”

Dhala agreed, stressing that merchants are ultimately looking to increase their bottom lines. 

“It’s basically a very dynamic space with lots of opportunities,” Dhala said. “But at the same point in time, it has its own challenges. It comes back to the core (of it) for acquirers and PayFacs, and that’s how do we actually increase revenue? And how do you minimize fraud risk?”

Harnessing the Power of AI

Artificial Intelligence has become a popular and effective tool for industry players to leverage in detecting and preventing fraud. That’s because AI solutions can analyze an enormous amount of data, which can then detect patterns and anomalies, revealing fraudulent activity. It can also lessen the number of false positives.

“Fraudsters are operating at scale,” Dhala said. “So, there are some quick learnings which you can get by leveraging (AI) insights.”