Written evidence submitted by Mastercard


I am writing on behalf of Mastercard to welcome the Treasury Select Committee’s inquiry into economic crime in the context of the COVID19 pandemic. I wanted to take this opportunity to set out our efforts to tackle fraud and protect consumers, which you may wish consider as part of your call for evidence.


Mastercard sees the vital importance of creating a safe and secure environment in which consumers can make transactions. For example, we protected consumers, merchants and banks from $20bn worth of fraud globally in 2019. We believe that consumers should be confident in using digital payment systems and, as such, combating fraud is central to creating trust in payments.


There is anecdotal evidence of a sustained level of fraud and scams during the two periods of lockdown in the UK. Mule accounts continue to be used to move money from fraud through the financial system. Financial crime tends to be fluid and adaptable to exploit new situations and, as such, fraudsters have apparently adapted their methods during the pandemic to focus on vulnerable people and the various government economic support schemes.


Throughout the pandemic, Mastercard has continued to operate its Mule Insights Tactical Solution (MITS), the UK network-level solution that traces funds through the financial system and identifies suspect mule networks. This has been a collaborative effort between the UK payment schemes and many of the UK banks since October 2018, and is continuing to advance with further collaboration. We offer this capability internationally as Trace Financial Crime.


In summary, MITS delivers insights and statistics to payment system operators and participating FIs to enable them to investigate and close down suspect mule accounts, as well as freeze and repatriate funds. We are also considering ways to increase information sharing with law enforcement authorities. The specific capabilities of our service are as follows:





Alongside technology to trace financial crime, there are increasing efforts to prevent fraud from happening in the first place. Mastercard’s Verify Account Name service - developed alongside Pay.UK’s Confirmation of Payee initiative - returns a score that an account name matches the one registered to the bank account. It also protects customers from authorised push payment fraud or accidental misdirection - a useful safeguard to consumers during the pandemic.


At the same time, our Prevent Retail and Business Payment Fraud service flags likely incidences of payment fraud before the funds leave a victim’s account. These solutions use machine-learning and behavioural analytics to determine whether a payment is high risk. Speed to market of such products is essential in order to stay one step ahead of fraudsters. In addition, cards provide protections for retailers including guaranteed payment, fraud protection and reduced physical security costs compared with other forms of payment such as cheques and cash.


The pandemic has accelerated the growth in digital payments, with more retailers than ever

conducting “card-not-present” transactions with customers they never see. But electronic commerce also brings new kinds of payment fraud. Mastercard operates a number of verification and security programmes that protect both consumers and retailers transacting in the digital economy.


Looking further ahead, greater protections at the point of transaction will enable consumers to engage even more safely with digital payments. Mastercard invests heavily in new solutions such as behavioural biometrics, which track how consumers hold a device, or interact with a screen, to understand if it is genuinely them using it. Ongoing innovation will be crucial in the fight against financial crime.


In terms of issues for the Committee to consider further, we believe that it is important for Government and regulators to encourage industry to share data (suitably sanitised, anonymised and protected) in order to support the fight against financial crime. Moreover, regulators should consider providing the necessary structure and agreements on the use of data, to help initiatives that work to protect consumers.


Economic crime will not disappear over the next 10 years, but like all other illegal payment activity, it will evolve – as we have seen it do during the pandemic. A sustained effort, supported by appropriate investment in innovation to counter ever-changing threats, is required to address the issue of financial crime to ensure that consumers have trust in the system.



December 2020