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Mastercard Partners with Feedzai to Leverage AI Tech to Detect and Tackle Crypto Fraud

Summary:
Mastercard’s partnership with Feedzai aims to address concerns around crypto fraud and money laundering by leveraging artificial intelligence to differentiate between legitimate and fraudulent transactions. Mastercard Inc (NYSE: MA) is strengthening its efforts to identify and prevent fraud associated with crypto exchanges. In an exclusive statement to CNBC, the company revealed a partnership with Feedzai, a regulatory technology platform leveraging artificial intelligence to combat online money laundering and financial scams. Through this collaboration, Feedzai will directly integrate with Mastercard’s CipherTrace Armada platform, which monitors transactions from over 6,000 crypto exchanges for potential fraud, money laundering, and other suspicious activities. The integration involves

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Mastercard’s partnership with Feedzai aims to address concerns around crypto fraud and money laundering by leveraging artificial intelligence to differentiate between legitimate and fraudulent transactions.

Mastercard Inc (NYSE: MA) is strengthening its efforts to identify and prevent fraud associated with crypto exchanges. In an exclusive statement to CNBC, the company revealed a partnership with Feedzai, a regulatory technology platform leveraging artificial intelligence to combat online money laundering and financial scams. Through this collaboration, Feedzai will directly integrate with Mastercard’s CipherTrace Armada platform, which monitors transactions from over 6,000 crypto exchanges for potential fraud, money laundering, and other suspicious activities.

The integration involves embedding CipherTrace Armada directly into Feedzai’s technology, facilitating real-time alerts for suspicious cryptocurrency transactions without relying on an API (application programming interface). Speaking on the development, Feedzai CEO and co-founder Nuno Sebastio said:

“This will increase fraud detection by protecting unwary consumers, but will also detect potential money laundering activity and mule accounts.”

Fraudsters exploit mule accounts, which are accounts belonging to users, to launder illicitly obtained funds. According to Feedzai data, approximately 40% of scam transactions involve the direct transfer of funds from a bank account to a cryptocurrency exchange.

The collaboration between Mastercard and Feedzai will also provide Mastercard with access to Feedzai’s artificial intelligence capabilities. Besides, Feedzai’s software can swiftly identify and block suspicious transactions in nanoseconds while also accurately recognizing legitimate transactions.

With its RiskOps platform analyzing transactions totaling over $1.7 trillion annually, Feedzai holds nearly 100 patents and also consistently secures an average of 10 patents per year to protect its technology. Sebastio said:

“Numerous banks that believe they are preventing illegitimate cryptocurrency transactions are, in fact, only blocking transactions involving the widely recognised and regulated entities within the crypto space and omitting the rest.”

Will Mastercard Make Crypto Mainstream?

Mastercard’s latest collaboration with Feedzai signifies the company’s commitment to integrating cryptocurrency into mainstream financial assets, subjecting them to established rules and compliance frameworks.

While banks and major financial institutions have expressed interest in experimenting with crypto, incorporating crypto products into their core offerings has posed challenges. Concerns about the lack of comprehensive regulations and susceptibility to fraud and scams have made banks cautious.

Speaking to CNBC, Ajay Bhalla, president of cyber and intelligence solutions for Mastercard said that the “interconnectedness of life today and increasing digital penetration of finance has brought risk as well as opportunity.”

Mastercard’s partnership with Feedzai aims to address these concerns by leveraging artificial intelligence to differentiate between legitimate and fraudulent transactions, particularly in the crypto space, where fraud rates are reportedly five times higher than in regular fiat transactions.

This collaboration follows Mastercard’s acquisition of CipherTrace in 2021, reinforcing the company’s efforts to enhance security and compliance in the cryptocurrency field.

Artificial Intelligence, Blockchain News, Business News, Cryptocurrency News, FinTech News

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