Case Study: AI’s Role at Mastercard


The adoption of digital payments has been growing steadily. Alongside this, fraudulent charges and false declines have become significant challenges. While historically technology struggled to address these issues effectively, AI and machine learning have emerged as transformative forces, enhancing fraud detection and decreasing false decline rates. Moreover, the ability of AI to self-learn has brought flexibility and accuracy into the traditional rule-based fraud detection systems, making it possible for systems to create consumer profiles based on individual behaviors. One major player in this space is Mastercard, which has actively incorporated AI into its operations to both enhance fraud detection and provide other services.

Key Takeaways

  • AI and machine learning have significantly improved fraud detection while simultaneously reducing the false decline rate.
  • Mastercard has been in the AI space for over a decade, focusing especially on cybersecurity.
  • Generative AI poses both new opportunities and challenges, requiring robust governance and ethical considerations.
  • AI at Mastercard is set to evolve further, with behavioral biometrics and other advancements on the horizon.

Deep Dive: AI’s Role at Mastercard


Mastercard’s experience with AI is extensive. The company has built a robust methodology and governance process that considers understanding data, understanding the models, and reviewing the output. With generative AI, Mastercard has encouraged internal exploration of models, emphasizing innovation and confidentiality.


Traditional rule-based systems have been enhanced by AI at Mastercard. Instead of only grouping consumers based on pre-defined data, AI systems mine historic and real-time data from various touchpoints to identify patterns. Mastercard also has an established council that evaluates AI use cases before deployment. The company’s current primary benefits from generative AI are internal productivity gains, while customer-oriented use cases are anticipated for the future.


The infusion of AI into fraud detection has led to significant results. False decline rates have been cut in half, translating into greater merchant revenues. Consumer satisfaction with digital payments has also improved due to fewer transactional frustrations.

Challenges and Barriers

Generative AI presents its set of challenges. Given the large size and complexity of generative models, understanding how specific inputs produce certain outputs is tough. Assessing outcomes for accuracy, biased language, and value becomes crucial. There are concerns related to data confidentiality when experimenting with models like ChatGPT, and ensuring governance is part of every employee’s responsibility is paramount.

Future Outlook

The next evolution of AI at Mastercard will likely encompass behavioral biometrics. This would involve assessing specific data points like how an individual holds a device. As more data becomes available, the benefits derived from AI are set to grow. Generative AI, while currently incremental, has the potential to be transformative in the long run.


Mastercard’s journey with AI serves as a testament to the transformative potential of technology in addressing real-world challenges in the digital payment space. As AI continues to evolve and shape the future of digital transactions, businesses need to approach it with agility, robust governance, and ethical considerations. Mastercard’s proactive approach to harnessing the power of AI while ensuring responsible innovation provides a roadmap for others in the industry.

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