Visa announced on Thursday the completion of a centralized database that will allow financial institutions, processors and program managers to detect and prevent fraud schemes aimed at prepaid cards.
The Visa Prepaid Clearinghouse Service allows banks, payments processors and other participants to share prepaid card data, including enrollments, load funding, suspected fraudulent information and reported fraud, which could help to identify and stop fraudulent card use.
“Visa’s Prepaid Clearinghouse Service will deliver a comprehensive compilation of prepaid account-level data from across the industry, which will help reduce prepaid fraud losses for consumers, financial institutions and their clients,” Brian Triplett, the senior vice president of emerging product development and the head of North America prepaid products, said. “Criminals are increasingly targeting prepaid products which more and more consumers are using for every day purchases. While existing laws and industry safeguards help limit most consumer losses, PCS is a huge step forward for the industry towards proactively preventing fraud schemes targeting prepaid cards.”
All Visa-issuing financial institutions and other prepaid managers will be required to submit information on prepaid card data, which is then checked against the database for risky activity. Participants will receive real-time alerts to be used in their fraud review decision-making process.
“Fraud is a constant threat for prepaid program managers, so being forewarned of what attacks are happening across the industry can help them prepare their defenses,” Ben Jackson, the senior analyst at Mercator Advisory Group’s prepaid advisory division, said.
The PCS is modeled after the Visa Issuers’ Clearinghouse Service, which was established to help reduce bank card credit and fraud losses.