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Refused transactions are frustrating enough for cardholders and merchants, but during a pandemic they could be especially nerve-wracking. Visa Inc. on Wednesday announced a new service for stand-in processing that the payments network says should yield faster and more accurate results when issuers’ systems are down.
The new Smarter STIP (for Stand-in Processing) technology, which will debut in October, relies on artificial intelligence and so-called deep learning to help reach go or no-go decisions during service interruptions. The new system, which builds on Visa’s existing STIP service, has the potential to reduce declines by as much as 50% “in some cases,” Visa says.
Transaction approvals satisfy cardholders and merchants but also help preserve interchange revenue for issuers. Processing downtime can result from unforeseen power outages or simply from scheduled maintenance at banks.
The new stand-in system’s deep-learning capability looks at transactions performed by a specific cardholder, taking into account behavioral patterns up to the time of the outage. This contrasts with prior systems that relied on “static rules applied across an entire card portfolio,” Visa says in its announcement.
Billions of records were used to train the new system, with the model delivering an accuracy rate of 95% when compared to the probable decisions an issuer itself would have arrived at, according to Visa’s tests. Smarter STIP can also learn and adapt using fresh data generated during outages and from changes issuers adopt over time, Visa says.
With a wealth of transaction information generated through its VisaNet processing network, Visa may be in a powerful position to leverage artificial intelligence, or AI. “Visa is extremely well positioned to unlock the full potential of AI for our clients and cardholders, and at massive scale,” said Rajat Taneja, president of technology at Visa, in a statement. “We’ve made significant investments in our infrastructure, making it possible to harness this data more deeply across all facets of VisaNet. Our data, combined with low-latency architecture and our unique modeling capabilities, make our technology platform among the most powerful for AI.”
At least some banks are already using Smarter STIP, according to Visa’s announcement, including Zurich-based UBS Group AG and Latitude Financial Services, based in Melbourne, Australia.
