Visa Inc. said Wednesday it has developed a more advanced artificial intelligence system that can approve or decline credit and debit transactions on behalf of banks whose own networks are down.
The decision to approve or deny a transaction typically is made by the bank. But bank networks can crash because of natural disasters, buggy software or other reasons. Visa said its backup system will be available to banks who sign up for the service starting in October.
The technology is “an incredible first step in helping us reduce the impact of an outage,” said Rajat Taneja, president of technology for Visa. The financial services company is the largest U.S. card network, as measured both by the number of cards in circulation and by transactions.
The service, Smarter Stand-In Processing, uses a branch of AI called deep learning
Smarter STIP kicks in automatically if Visa’s network detects that the bank’s network is offline or unavailable.
The older version of STIP uses a rules-based machine learning model as the backup method to manage transactions for banks in the event of a network disruption. In this approach, Visa’s product team and the financial institution define the rules for the model to be able to determine whether a particular transaction should be approved.
“Although it was customized for different users, it was still not very precise,” said Carolina Barcenas, senior vice president and head of Visa Research.
Technologists don’t define rules for the Smarter STIP AI model. The new deep-learning model is more advanced because it is trained to sift through billions of data points of cardholder activity to define correlations on its own.
In tests, the deep-learning AI model was 95% accurate in mimicking the bank’s decision on whether to approve or decline a transaction, she said. The technology more than doubled the accuracy of the old method, according to the company. The two versions will continue to exist but the more advanced version will be available as a premium service for clients.