Inside Visa's Fight Against Holiday Fraud: Harnessing AI Technology for Security

The holiday shopping season presents a unique challenge for Visa, a leader in payment solutions. While transaction volumes spike, generating significant sales, this period also triggers intensified efforts by cybercriminals seeking to exploit vulnerabilities and steal consumer data.

“As we’ve seen in the past, the holiday shopping season serves as a 'Super Bowl' for fraudsters, with increased spending and transactions,” said Paul Fabara, Visa’s chief risk officer, in an exclusive interview. “Online shopping experiences a significant rise, making it a prime target for malicious actors.”

According to Visa's latest biannual threats report, fraudsters are leveraging increasingly sophisticated tools, including artificial intelligence (AI) technologies like ChatGPT, which can automate and scale harmful activities.

AI vs. AI Crimefighting

“With tools like ChatGPT emerging, we are witnessing both the positive and negative implications of AI,” Fabara noted. “As with any new technology, criminals are quickly finding ways to exploit AI and Advanced Language Models (ALMs) for fraudulent purposes.”

The report highlights that these AI systems allow criminals to craft convincing phishing schemes, develop undetectable malware, and manipulate victims—conducting these activities on a massive scale.

To combat these evolving threats, Visa has invested heavily in AI-driven defense mechanisms.

“Over the past decade, Visa has allocated more than $3 billion towards AI and data infrastructure, enabling safer, smarter transactions while proactively identifying and preventing fraud,” Fabara shared. “Currently, we have several hundred AI models in operation, powering over 100 products.”

These AI-enhanced anti-fraud systems analyze transactions in real-time, assessing up to 500 unique risk factors in just 300 milliseconds to detect illicit activities. Fabara added that emerging AI innovations will further bolster decision-making accuracy during the high-risk holiday season.

The Human Element

While the intersection of AI technology and crimefighting is cutting-edge, Fabara emphasized the crucial role of human intelligence at Visa.

“We partner with clients and other players in the payments ecosystem, including merchants, to identify and investigate potential fraud,” he explained.

Fabara also underscored the importance of consumer awareness and vigilance.

“The first step to staying safe is being proactive and aware of potential threats,” he advised. He recommends utilizing multi-factor authentication, creating complex and unique passwords, and being alert to sophisticated phishing tactics.

Recent findings from McKinsey reveal that e-commerce sales have doubled in the last five years and are projected to nearly double again by 2026. As e-commerce continues to surge, the stakes in the holiday fraud battle increase. However, with experienced leaders like Fabara steering the operations, Visa and its clients can confidently navigate the “Cybercriminal Super Bowl.”