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Payment giant Mastercard has announced a strategic move to strengthen its defense against the increasing wave of fraud using cryptocurrencies by partnering with Feedzai, a technology platform specializing in combating online financial fraud and money laundering using artificial intelligence (AI) technology. This special collaboration is part of Mastercard’s commitment to securing cryptocurrency transactions and bringing cryptocurrencies under mainstream financial regulations.
Mastercard Collaborates with Feedzai for Financial Crime Prevention
Mastercard has increased its fight against crypto fraud by partnering with Feedzai, a regulatory technology platform known for its expertise in combating online financial fraud through artificial intelligence. Mastercard confirmed the collaboration in a recent interview with CNBC.
This special collaboration aims to enhance fraud detection by directly integrating the technology offered by Feedzai into Mastercard’s CipherTrace Armada platform. Unlike traditional API access, Feedzai’s seamless integration allows real-time alerts on suspicious cryptocurrency transactions, providing an additional layer of protection to unsuspecting consumers.
According to Feedzai CEO Nuno Sebastio, the collaboration not only strengthens the detection power for fraud committed with cryptocurrencies but also enables the detection of potential money laundering activities and the identification of accounts used by fraudsters to launder illegal funds. Considering that an estimated 40% of fraudulent transactions involve transfers from bank accounts to cryptocurrency exchanges, this collaboration is crucial for protecting financial transactions in the evolving crypto world.
Mastercard’s Effort to Legitimize Cryptocurrencies
Mastercard’s collaboration with Feedzai corresponds to its strategic move to legitimize cryptocurrencies as mainstream financial assets subject to the same rules and compliance frameworks as traditional assets. In a world where banks and financial institutions are increasingly experimenting with cryptocurrencies, this collaboration aims to address concerns about the lack of comprehensive regulations and susceptibility to fraud and scams. According to Mastercard President Ajay Bhalla, the interconnectedness of today’s digital finance environment brings both serious risks and various opportunities.
With increasing fraud in cryptocurrency transactions, reportedly five times higher than normal fiat transactions, the collaboration with Feedzai equips financial institutions with the capability to differentiate and detect legitimate and suspicious transactions. Furthermore, this collaboration builds upon Mastercard’s acquisition of CipherTrace Armada in 2021, solidifying its commitment to securing the cryptocurrency market with advanced technologies.