PR - Fair Isaac Teams Up With NYCE on Debit Card Security

Fair Isaac Corporation (NYSE: FIC), the leading provider of analytics and decision management technology, today announced that it will team up with NYCE Payments Network, LLC, a leading U.S. debit card payments network, to deliver innovative device-profiling technology to the debit card industry, providing NYCE Network participants with one of the best fraud detection and prevention offerings in its class.

With NYCE, a Metavante company, Fair Isaac will extend its proven account-profiling technology to ATMs and point-of-sale (POS) terminals to determine the fraud risk associated with individual devices. Based on data from NYCE’s extensive network of 280,000 ATMs and 1.5 million POS locations nationwide, the technology will identify typical, non-fraud transaction patterns for each terminal and create device profiles that enable detection of abnormal, potentially fraudulent transaction patterns.

Building upon Fair Isaac’s powerful fraud analytic technology for account-profiling, custom Falcon neural network models for debit transaction data, and comprehensive case and rules management capabilities, the device-profiling technology will add a new dimension to the use of transaction data in detecting PIN-based fraud. NYCE participants will be able to detect and stop fraud in real time, during the authorization process and before a loss is incurred, by determining the risk associated with individual devices.

“NYCE and Fair Isaac share a firm commitment to providing network participants with the fraud detection innovations they need to protect their customers and reduce fraud losses,” said Doug Clare, vice president of Networks for Fair Isaac. “The ability to include NYCE device-specific characteristics with account data greatly increases the detection power and accuracy of Falcon fraud scores. This new approach will deliver more than just a powerful fraud detection tool. We believe it will transform the debit network industry’s approach to fraud detection and management.”

In addition to building a custom device model utilizing NYCE terminal data, Fair Isaac will develop a custom Network PIN Debit Falcon model using historical data from Falcon customers worldwide. NYCE also will leverage its existing investment in Fair Isaac’s CardAlert Fraud Manager, which identifies and reports counterfeit payment cards to issuers before the majority of them incur fraud losses. The integration of CardAlert with the new fraud analytic solution will further increase NYCE issuers’ fraud detection rates and savings while significantly reducing fraud run-time.

U.S. debit card transaction volume has surged over the past few years. With debit cards sustaining nearly 20 percent annual growth and continuing to outgrow credit card usage, leading advisory research and consulting firm TowerGroup estimates that issuers will experience losses of $2 billion before 2010 unless they implement enhanced controls to prevent fraud losses from mirroring transaction growth.

“PIN debit’s inherent security features historically have given this payment method an advantage over other payment types when it comes to managing risk,” Clare said. “But its increasing usage means we have to help our clients stay vigilant to keep consumers’ trust in its reliability and security high.”

The core fraud detection technology leveraged in the development of Fair Isaac’s new device-profiling model currently protects more than 900 million payment cards worldwide. Leading U.S. financial institutions, including the top 25 banks and three out of the five top ATM networks, use Fair Isaac’s industry-standard fraud analytic solutions such as Falcon Fraud Manager and CardAlert Fraud Manager to combat fraud.