Visa harnesses real-time deep learning

By Robin Amlot

Visa’s new Visa Smarter Stand-in Processing (Smarter STIP) uses real-time artificial intelligence (AI) to help financial institutions manage transaction authorisations when service disruptions occur. Using deep learning to analyse past transactions, Smarter STIP generates informed decisions to approve or decline transactions on behalf of issuers in the event that their systems go offline.

Visa pioneered the use of AI and neural networks to prevent fraud—Smarter STIP builds on that track record and is the first in a suite of new AI-powered innovations coming to VisaNet, Visa’s global processing network. Visa Smarter STIP does not require any technical change for clients to participate.

Visa created the Smarter STIP capability to address a key pain point for issuers and issuer processors: the suboptimal experience for cardholders during service disruptions. Visa’s novel approach to stand-in processing, recognised through a US Patent in 2019, improves on the existing STIP capability through real-time evaluation of cardholder-level features.

“Consumers expect instant and uninterrupted access to their funds—failure to meet that expectation can be costly,” says Jack Forestell, executive vice president and chief product officer, Visa. “Stand-in processing has always been a vital assurance to our clients that when the unexpected occurs, we’ve got their back. By adding AI, that capability becomes smarter, stronger, and more dynamic.”

Visa’s new Smarter STIP service builds on Visa’s existing STIP capability by using deep learning to analyse past transactions down to the cardholder level. Thus the transaction decision that Smarter STIP provides is based on insights derived from the cardholder’s past purchasing behaviour, rather than solely on static rules applied across an entire card portfolio. With this added intelligence, Visa is able to provide a transaction decision on the issuer’s behalf that more closely mirrors the issuer’s own decision making process—with the potential to decrease transaction declines for cardholders by up to 50% in some cases.

Harnessing AI for the payments ecosystem

Visa Smarter STIP is one of several new real-time deep learning capabilities designed to solve long-standing challenges and pain points for buyers, sellers, and financial institutions. The company said these enhanced services are made possible by the investments it has made to optimise its core infrastructure. This includes a scalable, high-performing, GPU-based platform designed to support the rapid deployment of deep learning capabilities.

“AI is one of the most transformative technologies of our time, giving us the power to build data-driven products that deliver new levels of insight and personalisation. With one of the largest and richest data sets in the world, Visa is extremely well positioned to unlock the full potential of AI for our clients and cardholders, and at massive scale,” says Rajat Taneja, president of technology at Visa. “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 modelling capabilities, make our technology platform among the most powerful for AI.”

Smarter STIP will be available in October 2020 and has already generated interest from a range of financial institutions around the world. The model relies on:

• Multiple recurrent neural network layers with millions of parameters.
• Billions of historical records to train the model, resulting in an average 95% accuracy in emulating an issuer’s likely decision in Visa’s sample tests.
• Continuous learning from real time transaction and outage data, allowing the service to adapt and improve as an Issuers’ behavior changes over time.