Mastercard is doubling down on an effort to detect and stop crypto fraud with the help of AI. This initiative aims at enhancing the safety of financial transactions, especially those involving cryptocurrencies.
In a bid to escalate its fight against fraudulent crypto activities, Mastercard has entered into a strategic collaboration. The company told CNBC that it has partnered with Feedzai, a regulatory technology platform that combats money laundering and online financial scams using artificial intelligence. Feedzai will integrate directly with Mastercard’s CipherTrace Armada platform through the partnership. The Armada platform helps banks monitor transactions from over 6,000 crypto exchanges to detect fraud, money laundering, and other suspicious activity. CipherTrace Armada will now be directly embedded into Feedzai’s technology instead of through an application programming interface. It is estimated that 40% of scam transactions exit directly from a bank account to a crypto exchange.
As we delve deeper into the intricacies of this partnership, let’s take a look at some staggering figures associated with Feedzai’s RiskOps platform. According to CNBC, Feedzai’s RiskOps platform analyzes transactions worth over $1.7 trillion annually. The move marks a push for Mastercard to legitimize crypto as a mainstream financial asset that can be subjected to the same rules and compliance frameworks as traditional assets. Banks and other large financial institutions have shown increased interest in experimenting with crypto in their products and services, but deploying commercially available crypto products as part of their core offerings has proven more elusive. Last year, theft and scams led to a global increase of 79% in crypto-related losses. Mastercard’s vast network is used by banking institutions worldwide to process and monetize payments. In the U.K., banks have shown hesitation when it comes to being associated with crypto, with several larger lenders halting transactions with crypto exchanges on their networks due to fraud risks.
Adding more context to this matter, Ajay Bhalla, president of cyber intelligence solutions for Mastercard, provides his insights. Ajay Bhalla, president of cyber intelligence solutions for Mastercard, told CNBC that “Our latest data shows fraud on transactions where people are buying crypto is 5 times higher than regular fiat transactions,” Bhalla said via email, adding that, with Mastercard’s new tie-up with Feedzai, financial institutions will “be able to tell good transactions from bad.” This partnership builds on Mastercard’s deal to acquire U.S. blockchain sleuthing firm CipherTrace. In 2021, Mastercard bought CipherTrace and launched CryptoSecure, using the firm’s technology to analyze and block transactions from fraud-prone crypto exchanges.
