Preventing payment card fraud one transaction at a time

SAS helps Nets achieve the lowest payment card fraud levels in Europe

As more and more consumers turn to digital payments in both physical stores and online shopping, payment card fraud has steeply increased. The fight against digital financial crime is also intensifying.

Nets, Europe’s largest payment card processor by number of cards and transaction volume, delivers end-to-end card processing services for more than 250 banks and financial institutions and 700,000 merchant outlets, including 140,000 online merchant outlets. Using SAS Fraud Management, Nets has reduced payment card fraud levels in Denmark by 66% since 2016. This represents the lowest fraud loss levels in Europe.

Since a merger in 2021, Nets is part of Nexi Group, which is the leading provider of digital payment services and related technology solutions across Europe, present in more than 25 countries and representing 65% of European consumption. Now, Nets is making its world-class payment card fraud prevention system available across the region to its customers in banking and retail through Nexi.

Finding fraud faster

Payment card fraud is by no means a victimless crime. Besides the losses for consumers, merchants and banks, the proceeds from digital card fraud are known to finance other criminal activity, such as human and drug trafficking.

“When you are combatting payment card fraud, you are essentially in an arms race with cybercriminals,” says Jeppe Kirkegaard Folling, Vice President of Fraud and Disputes at Nets. “Their incentive to find new avenues to trick consumers or use stolen personal data is strong, so we must be even more innovative and diligent than they are.”

Folling and his team are continually working to optimize the performance of Nets’ real-time fraud platform, which is based on SAS payment fraud solutions.

SAS Fraud Management provides enterprisewide fraud detection on a single technology platform, covering multiple business lines and channels as well as real-time analytics execution and decisioning capabilities. SAS Fraud Management can be deployed on premise, via the cloud or delivered as Software-as-a-Service.

The lowest fraud levels in Europe

Nets and SAS have a long-standing relationship in the Nordics that has gained record results.

“In Denmark, our joint fraud skills and competencies combined with the real-time fraud platform has led to the development of the best-performing fraud models delivering the lowest fraud levels in Europe,” Folling says. “In Q2 of 2021, the levels were at 0.2 basis point on domestic cards and 0.6 basis point on international cards, according to the Danish Central Bank official statistics, which is a third of the level of the same quarter in 2016.”

Nets and SAS are directly reducing the card fraud losses in the issuing banks while also preventing losses, anguish and inconvenience for cardholders.

Folling attributes the results partially to the centralized approach. With governance and oversight of fraud centralized in SAS Fraud Management, tasks are much more efficiently carried out. Fraud modeling is faster, the false positive KPIs are improved, and it is easier to search and do individual reporting.

The system also allows fraud teams to define and correct errors as well as implement new fraud rules and scenarios and changes for several customer banks at once. This saves the banks a lot of resources, but still supports multitenancy and individual flexibility, allowing for individual tailoring for each client’s specific needs.

Nets and SAS’ partnership is expanding across Europe through Nexi, supporting financial crime prevention across the region.

“The digitalization of payments across Europe has accelerated wildly during and in the wake of the COVID-19 pandemic,” Folling says. “Banks and merchants are fully aware that they need to step up their fraud prevention, and Nets can offer just that through our Fraud and Dispute Services, which has SAS Fraud Management at its core.”