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How Crowd-Sourcing Fraud Management Helps Issuers Contain Risk

For any crowd-sourced fraud detection application, reliability is paramount to win customer trust



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With an explosion of digital payment channels, transaction security enhancement has become indispensable for all entities in the payment process – issuers, acquirers, merchants, payment brands, mobile and digital commerce solution providers. The risks and cost of securing a growing volume of transactions to meet regulatory and compliance requirements has, however, increased substantively.

According to the Nilson report, October 2016 edition, general purpose and private label credit, debit and prepaid cards worldwide generated $31 trillion in total volume in 2016, a 7.3% increase over 2014. Worldwide losses from fraud borne by card issuers reached $15.72 billion and is expected to total $31.67 billion by 2020.

The continuous evolving and dynamic nature of fraud is the biggest business threat banks face today. The multiple facets of fraud include skimming, card trapping, shoulder surfing, card-not-present transaction fraud, inadvertent disclosure of PIN card information and pharming.

Banks need to be vigilant and continuously upgrade fraud and risk management infrastructure and governance processes to protect card sensitive information and prevent unauthorized transactions.

Over time, a series of controls have been implemented, including chip-based cards, two-factor authentication such as OTP, Dynamic Device Authentication and Tokenization, with a view to safeguard the payment environment.

In addition to these measures, another major aspect issuers need to focus on is consumer awareness and empowerment. Customer-driven fraud deterrent strategies can bolster cardholder confidence and trust in yet evolving digital payment instruments and channels.

Leveraging the power and wisdom of the crowd and encouraging cardholders to play an active role in managing fraud, aids issuers in maintaining a constant, high-level of vigil in containing fraudulent transactions. A consumer-controlled card-protection strategy leverages smart technologies to empower cardholders to define where, when and how cards can be used. Customers can specify permissible transaction types, limit spends, or temporarily lock a misplaced card, enhancing existent security around card transactions.

Based on needs of cardholders, a wide gamut of use cases can be enabled by a consumer controlled card-product. These include:

Spend Tracking: Cardholders can closely manage daily card use based on a range of parameters:

Using these controls, a cardholder, for instance, could specify the card can be used at the local grocer, set limits for ATM withdrawal and bar all e-commerce transactions.

Customers can receive notifications when such controls are breached or abnormal transaction activity is detected on their payment instrument. This helps customers instantly act on the fraud and take immediate control of the issue.

Parental Control: Parents can create customized spend profiles for each family member and can proactively monitor dependents spend. Furthermore, geo-fencing a card can enable parents to ensure dependents use the financial instrument within a known radius or at known merchants.

Safe Mode, Single Transactions:  Primary card holders can activate a safe mode to enable a single transaction on the card. For example, limiting the dollar amount whilst sending a child or a staff member on a specific errand.

International Travel:  Frequent international travellers can lock international purchases from being made in-store or via online shopping when they are in the home country. This means no one can steal the card and rack up a high bill overseas.

Corporate Users: Card controls can provide businesses improved control, transparency and reporting on expenses. Whether employees are stocking up on office supplies or taking a client to dinner or travelling abroad, FSS Toggle helps corporates allocate and track spends and bring transparency in transactions. Businesses can create spend profiles for each employee (sub-account) and monitor expenses to prevent misuse of official cards. For example, a maximum single purchase amount can be set, or transactions can be limited to specific merchant categories or to the total amount spent over a specific time-period


Crowd-sourcing fraud management and actively enlisting card-holders in the fight against fraud can help banks achieve an added layer of security at a very low cost. A heightened sense of security surrounding card transactions drives adoption and usage of new digital payment instruments. FSS has launched Toggle, an application that allows customer tailor their card settings to match personal spending patterns and requirements using a mobile app or via the issuer’s mobile banking application or online website.

For any crowd-sourced fraud detection application, reliability is paramount to win customer trust. The HP environment for Toggle is ideal to provide the necessary scaling, flexibility and highest level of availability in an integrated and secured manner. In the days to come, the backend will be referenced on world’s leading HP-Non-Stop platform to meet performance and scalability requirements.

For more information on FSS Toggle card control capabilities, please write to the FSS Marketing team:


Author Bhargavi. M — Manager Products – Issuance Line of Business – Financial Software and Systems