The payments system is increasingly dynamic and the risks associated are becoming more complex. Providing a method for cardholders to quickly identify suspicious purchases on their accounts through the use of transaction alerts is a proven method to lessen fraud.
A Visa study showed that transaction alerts can help reduce fraud by up to 40% while providing a positive consumer experience. Despite these benefits, approximately two-thirds of consumers remain unserved through traditional alert systems.
In October of 2016, Visa and MasterCard updated their rules to require all U.S. issuers to provide a method to cardholders of debit, credit and reloadable prepaid cards to enroll in transaction alerts.
Credit Unions can provide their own alert service or offer one from a third party such as their core data processor, a mobile app or through Visa or MasterCard. Transaction alerts should be delivered in near real time and can be sent by SMS text, email and or in app push notifications.
Visa and MasterCard require a minimum of 3 alerts, international transactions, card not present transactions and a dollar threshold of the transaction. These alerts are considered the most effective types of transaction alerts to identify and confirm fraudulent activity.
Transaction alerts creates a partnership with your member in fighting fraud, creating an enhanced experience and peace of mind for the member.
Alerts help the Credit Union’s operational effectiveness by reducing the amount of fraud, time spent on fielding member calls and processing chargebacks as well as decreasing expenses related to fraud. Card portfolio growth and increased revenue are seen due to reduced account closing and increasing trust and loyalty.
Bringing members into the detection process, through transaction alerts, is a key component for Credit Union risk management best practices.
By: Patrick E. Voss, Assistant Vice President – Member Outreach