Mastercard announced its latest strategy to combat credit and debit card fraud, as part of an upcoming software update. Leveraging AI to detect patterns to identify compromised card numbers before they fall into the hands of cybercriminals.

“Generative AI is going to allow us to figure out where your credentials may have been compromised, identify how it possibly happened, and quickly remedy the situation for you and other customers who don’t yet know they are compromised,” explained Johan Gerber, executive vice president of security and cyber innovation at Mastercard, in an interview, according to the Associated Press.

Mastercard’s new update utilises contextual information—such as geography, time, and addresses—in conjunction with compromised credit card numbers found in databases. 

The technology can also trace compromised batches of cards to identify vulnerable merchants or payment processors. Gerber noted that this pattern recognition exceeds the capabilities of traditional methods, which rely on human-led database inquiries.

The dark web is inundated with billions of stolen credit and debit card numbers, available for purchase by criminals. These numbers are often stolen from merchants during data breaches, but many are also taken from consumers who unwittingly use their cards at compromised gas stations, ATMs, or online merchants.

Typically, compromised cards can remain undetected for extended periods, only coming to light when payment networks scan the dark web, merchants report breaches, or criminals use the cards. Mastercard’s new AI-driven approach aims to proactively identify and replace compromised cards  instead, minimising disruption for consumers.

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The payment industry is gradually transitioning away from “static” card numbers—permanent numbers used universally across all merchants—to unique numbers for specific transactions. However, this shift may take years due to slower adoption of new payment technologies.

Mastercard’s AI update coincides with efforts by its major competitor, Visa Inc., to modernise payment methods. Visa recently announced significant changes to U.S. credit and debit card operations, suggesting a future where physical cards and static 16-digit numbers become obsolete.

As the payment industry evolves, Mastercard’s integration of AI represents a significant step toward enhancing security and reducing fraud, promising a safer and more efficient experience for consumers and financial institutions alike.