Mastercard has announced changes to its Identity Check program, which will provide South African cardholders with an additional degree of security at checkout. The phased security changes arrive just in time for Black Friday and the summer vacation shopping season, and they will be appreciated by retailers, banks, and customers alike as fraud rates continue to grow.
According to SABRIC, in 2022, card not present (CNP) fraud amounted to 76.9% of the gross fraud losses on South African-issued credit cards.
To combat online payment fraud, Mastercard has improved its Identity Check program, a sophisticated security tool that uses the 3-D Secure 2.0 protocol, to offer an extra layer of verification at the checkout stage. This upgrade will improve the way cards authenticate their identities while doing online transactions.
Andries Maritz, Principal Product Manager at Entersekt, “E-commerce is showing good growth in South Africa, but many consumers remain wary of using their cards online or become annoyed by high-friction checkout experiences, slowing the growth potential of online commerce. The latest Mastercard initiative focuses on performance enhancements by integrating cutting-edge technologies like AI for risk-based authentication as well as biometrics. Working with authentication specialists, the aim is to help issuers create a more seamless and secure experience for cardholders.”
Added security with biometrics without additional friction 
The upgrade (AN8808) is directed at European countries as well as more than 70 Middle Eastern and African nations. It will prioritize biometric verification, such as facial recognition and fingerprint scanning, above standard password approaches.
For low-risk transactions, the upgrade will still offer frictionless authentication. This implies that cardholders won’t often need to complete any additional verification processes because authentication will typically take place automatically and without further prompts.
Mastercard will now mandate issuers to provide cardholders with biometric-enabled devices with a physical biometric option for authentication on transactions that seem high-risk or suspicious, where cardholders are typically prompted for additional verification (using strong customer authentication methods).
The new restrictions reduce the hassle of using multi-factor authentication, which sometimes requires additional steps like sending an SMS or email code, by requiring biometric authentication instead.
Entersekt makes a significant contribution to client security by utilizing Mastercard’s behavioral biometrics. Using the sender’s biometric to confirm the transaction’s authenticity allows banks to strengthen verification for transactions deemed more risky. Before the money leaves the sender’s account, this extra precaution can protect them.
Compared to other techniques like SMS one-time PINs (OTPs), Mastercard has disclosed that issuers have reported a 32% decrease in fraud when biometric authentication is used.
“We know that the previous step-up authentication methods can slow down the checkout process and frustrate cardholders, often leading to cart abandonment and lost sales. By turning to biometrics, online shoppers can quickly and easily authenticate their identity by using their face or fingerprint, which is securely stored on their devices, minimizing the chance of it being hacked or misused. This isn’t just faster, but it eliminates the risks created by weak or stolen passwords,” Maritz explains.
“While the deadlines allow a phased approach, the benefits of implementing the updates as soon as possible are compelling. Issuers would do well to support merchants’ efforts to maximize retail holiday opportunities like Black Friday and the festive season.
The business case for the update is compelling enough to lean into early adoption. Under the new mandate, organizations will see reduced checkout issues, improved authentication success rates, and increased approval rates. Big security gains can also be had through the enhanced step-up challenge experience when using qualifying biometric authentication, not to mention operational cost savings from reduced step-up challenges through SMS OTPs,” Maritz shares.
Industry collaboration is key to success
Over the years, the financial ecosystem has realized the need for greater collaboration in order to fight rapidly evolving and increasingly sophisticated fraud. Together with the Global Anti-Scam Alliance, Mastercard shares knowledge and defines joint actions to advocate for safe and secure ways to transact, interact, and protect consumers.
Entersekt is also partnering with several industry leaders to provide advanced consultative insights and mature user interfaces to help solve the targets set out by Mastercard, as well as the underlying challenges necessitating the targets.
“Dynamic risk-based authentication in a modern ecosystem is more than a long list of static rules. Transaction risk profiles are adaptive, contextualized, and must also be compliant with regulations. Despite the adaptive nature of these rules, Entersekt solutions still give issuers full control over the system behavior with the best available data. Fraud prevention has become incredibly complex, making it more essential for organizations to work with industry leaders like Mastercard as well as authentication partners who have the global experience to tackle new challenges as they emerge,” Maritz advises.The post Mastercard Unveils Improved Identity Check for SA Users first appeared on IT News Africa | Business Technology, Telecoms and Startup News.