Issuer Data Becoming Secret Weapon In Fight Against Fraud, False Declines
By CU Today Staff —
NEW YORK--Banks and other financial institutions are increasingly being judged not just on how quickly they process payments, but on how effectively they use data to make real-time decisions that reduce fraud, improve approvals and enhance the customer experience, according to a new PYMNTS Intelligence report produced in collaboration with FIS.
The report, Where Payment Decisions Happen: How Issuer Data Is Powering the Next Era of Commerce, argues that issuer processing is evolving from a back-office function into a source of real-time intelligence. PYMNTS said issuers are uniquely positioned to leverage credit profiles, transaction histories, spending behavior, rewards data and fraud signals to improve payment outcomes as commerce becomes increasingly digital and automated.
Among the report's findings, PYMNTS said issuers falsely decline about 15% of legitimate e-commerce transactions, contributing to an estimated $430 billion in lost global sales each year. At the same time, while issuers reported average fraud losses of approximately $239 million across the payment lifecycle, 42% said artificial intelligence has helped them prevent more than $5 million in fraud losses. The study also found that 47% of organizations continue to struggle with poor-quality data that limits the effectiveness of AI-driven payment decisioning.
The report said traditional issuer processing systems were designed for speed and reliability but are increasingly expected to evaluate contextual information—including device recognition, updated credentials and prior spending patterns—in real time. Although 55% of organizations said they have unified more than half of their data, PYMNTS noted that data quality remains a significant obstacle to fully leveraging AI and advanced analytics.
According to PYMNTS, the shift is expected to become even more important as AI-powered and autonomous commerce expands. Following its acquisition of TSYS, FIS now processes more than 73 billion transactions annually across more than 75 countries, giving it a vast pool of issuer data to support fraud detection, analytics and authorization decisions. The report concludes that issuer processors are evolving from systems that simply record transactions into platforms that actively guide payment decisions in real time.
Originally reported by CU Today.