Visa launches Smarter Stand-in Processing to reduce business impacts during service disruptions

By Pavithra R

Visa, a leading global payments technology company, has announced the launch of Visa Smarter Stand-in Processing (Smarter STIP), that uses real-time artificial intelligence (AI) to help financial institutions (FIs) manage transaction authorizations when service disruptions occur.

Smarter STIP leverages deep learning to analyze past transactions and generates informed decisions to approve or decline transactions on behalf of issuers if their systems go offline. Visa being a pioneer in the use of AI and neural networks to prevent fraud, has built the Smarter STIP on that track record. 

“Consumers expect instant and uninterrupted access to their funds—failure to meet that expectation can be costly. 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,” said Jack Forestell, executive vice president and chief product officer, Visa.

Service downtime is disruptive with profound potential impacts for financial institutions and their customers. These could be poor cardholder experience resulting in call volume spikes to customer service centers, lost revenue due to failed transactions, damage to reputation and even scrutiny from regulators. 

The new Smarter STIP service builds on Visa’s existing STIP capability by using deep learning to analyze past transactions down to the cardholder level. The transaction decision provided by Smarter STIP is based on insights derived from the cardholder’s past purchasing behavior, rather than solely on static rules applied across an entire card portfolio. Visa’s approach to stand-in processing improves the existing STIP capability through real-time evaluation of cardholder-level features. The model relies on:

• Historical records to train the model, resulting in increased accuracy in emulating an issuer’s likely decision in Visa’s sample tests.
• Multiple recurrent neural network layers based on millions of parameters.
• Continuous learning from real-time transactions and outage data allow the service to adapt and improve with varying issuers’ behavior.

Visa is planning to roll out the Smarter STIP service in October 2020.

“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 personalization. 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. 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 modeling capabilities, make our technology platform among the most powerful for AI,” said Rajat Taneja, president of technology at Visa.

Recently, MagicCube received a strategic investment from Visa.

Established since 1958, Visa is a global payments technology company working to enable consumers, businesses, banks, and governments to use digital currency. Its advanced global processing network, VisaNet, provides secure and reliable payments and is capable of handling more than 65,000 transaction messages a second.