Mastercard has announced a partnership with Feedzai, a leading regulatory technology platform known for its advanced artificial intelligence capabilities in combating online financial crime. This collaboration aims to proactively address the escalating issue of fraud associated with cryptocurrencies.
Feedzai’s expertise in detecting online financial frauds is expected to be a game-changer in this partnership. Combining its technology with Mastercard’s CipherTrace Armada platform, the alliance seeks to enhance the detection of fraudulent activities in real-time. This innovative approach is a departure from traditional API access, providing immediate alerts on suspicious crypto transactions, thereby offering consumers an added layer of protection.
Targeting fraud and money laundering
The partnership goes beyond just identifying fraudulent transactions. According to Nuno Sebastio, CEO of Feedzai, the collaboration also focuses on potential money laundering activities and the exploitation of mule accounts, which are often used by fraudsters to launder illegal payments. This aspect is crucial, considering the claim that around forty percent of fraudulent transactions occur when funds are transferred from a bank account to a cryptocurrency exchange.
This initiative is part of Mastercard’s broader strategy to acknowledge cryptocurrencies as legitimate financial assets, deserving of the same regulatory and compliance measures as traditional fiat currency. The partnership is timely, given the rapid pace at which banks and other financial institutions are incorporating cryptocurrencies into their offerings. It addresses industry concerns about the lack of comprehensive standards and the vulnerability of digital assets to fraud and scams.
Mastercard’s ongoing commitment to crypto security
Mastercard’s President, Ajay Bhalla, highlights the dual nature of today’s interconnected digital financial environment, presenting both risks and opportunities. The partnership with Feedzai is seen as a critical step in enabling financial institutions to distinguish between legitimate and suspicious transactions, especially considering the reportedly higher incidence of fraud in cryptocurrency transactions compared to traditional currency dealings.
Furthermore, Mastercard’s acquisition of CipherTrace in 2021 underscores its commitment to safeguarding the cryptocurrency sector with state-of-the-art technology. The partnership with Feedzai builds on this commitment, reinforcing Mastercard’s position as a proactive defender against cryptocurrency fraud.
