Following a beta development programme involving several financial
institutions, US electronic funds network provider Pulse EFT
Association has launched DebitProtect, a neural network debit
card-based fraud detection system.
In essence, DebitProtect assesses risk for all PIN, signature and
PIN-less debit transactions on the Pulse network and notifies
financial institutions via e-mail of possible fraudulent
Pulse’s president, Dave Schneider, explained that because debit
cards are used in a different manner from credit cards,
DebitProtect’s design is based on a data model developed for debit
“This neural model will be continuously refined utilising fraud
data obtained from Pulse issuers,” said Schneider.
DebitProtect uses neural network technology which, in practical
terms, is an artificial system that performs intelligent tasks
similar to those performed by the human brain. According to Pulse,
DebitProtect evaluates transaction characteristics against a
customised, constantly evolving risk model built from actual
transaction data. The system is able to learn fraudulent behaviours
and identify suspicious transactions that are either outside of
established cardholder patterns or match known fraud
Risk scores are derived from card use patterns, predefined
modelling parameters and data from the transactions themselves.
Scores that exceed a preset threshold trigger alert e-mails that
are sent to issuing institutions. System users review information
via a website about the suspect transaction and classify it as
either fraud or not fraud.
The DebitProtect system is being implemented in two stages. Phase
one provides Pulse-participating debit card issuers with
near-real-time transaction monitoring and e-mail notifications
24/7. When phase two is implemented in the fourth quarter of this
year, Pulse plans to support automatic blocking of transactions
based on rules and parameters established by the issuer.
The new system has already begun proving its potential. “The day we
went live with Pulse’s fraud detection system, it helped us
identify three fraud cases and saved us more than $13,000 in
attempted fraudulent transactions,” said Laurinda Thomas, loss
prevention manager for First Technology Services, one of the beta
“DebitProtect helps us catch fraud situations sooner than it would
typically take for the bank or the account holder to become aware
of the situation, thus reducing our losses. In addition, our
cardholders appreciate the fact that their bank is watching out for
First Technology Services is a wholly owned subsidiary of bank
holding company First Financial Bankshares and provides technology
services to First Financial’s ten banks.
Pulse, a unit of credit card and payment services company Discover
Financial Services, has a client base of 4,400 financial
institutions and links 260,000 ATMs and POS terminals