PURCHASE, N.Y.—Mastercard has introduced what it is calling its “First-Party Trust program,” which it said offers with AI-powered insights to combat the “surging” trend in first-party or “friendly' fraud.”
Those genuine transactions are mistakenly or intentionally challenged by cardholders, Mastercard said.
According to Mastercard, the program has been developed in collaboration with industry groups including the U.S. Merchant Advisory Group and Merchant Risk Council. The company cited data from Datos that recently found 75% of fraud experienced by digital businesses was first-party fraud.
‘Pertinent Insights’
According to Mastercard, the First-Party Trust program aims to create greater transaction transparency by giving merchants, including small businesses, the opportunity to “submit pertinent insights” to counter first-party fraud. Mastercard said it will provide two paths for the sharing of these enhanced insights between a merchant and card issuer: Merchants can send the enhanced data directly as part of the transaction, or they can do so post transaction as part of the disputes process.
What’s Being Provided
The program, Mastercard added, will also enhance the resolution of such disputes by providing:
- AI and risk modeling to help identify genuinely fraudulent (third-party fraud) transactions and signal those that carry the highest levels of trust
- Enhanced signals for issuers enabling greater insight into the cardholder’s purchase history, device, delivery information, identity elements, and geographic location
- New rules defining compelling evidence to help recognize genuine purchases and prevent unnecessary flawed disputes, including merchant chargeback protection for disputes that meet First Party Trust data sharing requirements
The First-Party Trust program is a global program, with the rollout starting with the U.S. in 2024, Mastercard said.
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