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New software, now being used by the National Australia Bank, is reducing the risk of fraud losses for merchants. In a joint development with ACI Worldwide Pty Ltd, the National has developed and introduced PRISM Merchant - a state of the art software system designed to identify suspect transactions, coming to the National for settlement and processing, more quickly than ever before. The system is the second application of PRISM by the National in nine months. In June last year, PRISM was introduced to detect credit card fraud for the National's cardholders. PRISM Merchant is used to detect any unusual transactions coming to the National from merchants, including transactions which are made via the Internet, Eftpos or cash. Mr Peter Kempster, the National's General Manager, Payments Australia, said the new software would be of great benefit to its mechants, as it allowed the National to pro-actively monitor transactions and respond faster to unusual activity. The system also benefits the National, as it streamlines the monitoring of approximately two million transactions processed by the National every day and worth about $30 billion per annum. "Through the early detection of fraud, and intervention by the National, it is possible to bring a fraud attack to a halt, thereby eliminating or reducing potential losses for both the merchant and the National. "One of our early successes, as a result of using PRISM Merchant, was to prevent a retailer from despatching a $74,000 computer order to three overseas customers quoting counterfeit credit card numbers via mail order. "Our prompt action resulted in most of the goods not being shipped," said Mr Kempster. The strength of PRISM Merchant is its ability to recognise a targeted fraud attack on a merchant. The system works by comparing each transaction against the merchant's normal transactional profile, for instance detecting an unusually high velocity of transactions (possibly indicating an organised spate of fraudulent activity); multiple transactions per card; and the accuracy of electronically captured details where the card has been swiped (as an indicator of counterfeited cards). After alerting suspect activity, transactions are flagged for prompt and appropriate action. Activity that matches a pattern is automatically queued for review, allowing the National's fraud prevention team to take pre-emptive action. The software has benefits for both the National and merchants. It will reduce the National's exposure to losses from merchant fraud and the merchant's exposure to cardholder fraud.
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