Mastercard and Truist Explore Fraud and the Economy’s Three S’s

Instant gratification rules today’s theater of commerce, and businesses shouldn’t be letting fraud get in the way by slowing down transactions.

From seamless tap-to-pay interactions at local coffee shops to online checkouts that rival the brevity of a haiku, immediacy has worked to position itself as the defining KPI of both payments and the customer experience. Yet, with great speed can often come significant vulnerability.

To unpack the realities of the contemporary landscape where convenience, speed and security often dictate consumer expectations, PYMNTS sat down with Adam Lowe, PhD, chief product and innovation officer at Arculus/CompoSecure; Rohit Chauhan, EVP, AI Fraud Solutions at Mastercard; and Chris Ward, head of enterprise payments at Truist to understand the strategies and opportunities businesses have as they race to both create seamless payment experiences and defend against what’s next in fraud.

One exciting solution? Lowe said Arculus by CompoSecure’s tap-to-authenticate metal payment cards could serve as a way to offer secure, streamlined and accessible physical authentication solutions, alleviating two issues at once by enabling a use-case experience with less friction and higher security.

“Consumers today operate in what I call the three S’s of the economy: speed, simplicity, and safety,” Truist’s Ward added. “People want to transact quickly and simply, and they need confirmation that the transaction was completed.”

Safety remains paramount, and Ward noted that “consumers don’t mind friction if it protects them. Friction without protection, however, becomes a frustration point.”

Mastercard’s Chauhan echoed this sentiment, emphasizing that security and convenience are two sides of the same coin.

“It’s a delicate balancing act,” he said. “Our goal is to keep friction as low as possible while maintaining the highest levels of security.”

While fraud prevention fuels boardroom conversations, the consumer’s priority is simplicity. A cumbersome checkout process is anathema in the age of digital ease.

The crux of the challenge lies in harmonizing speed, security and user experience. Overzealous security protocols risk alienating consumers with excessive friction, while lax measures invite significant exposure to fraud. The equilibrium demands an intricate blend of technology and trust.

“Customers are OK with friction if it provides value,” CompoSecure’s Lowe said. “They don’t want to carry another widget or learn something new; they want to use what they already know … we’re typically known for our premium metal cards, and we’ve taught the world how to tap to pay so extending that to tap-to-authenticate is a logical step.”

This principle extends to technological innovations like device-bound passkeys, which Lowe championed as a game-changer.

“Passkeys eliminate the guesswork,” he said. “They’re injected into one device and accessed only from that device, offering a high degree of authenticity with minimal user effort.”

As innovation marches onward, payments ecosystems are transitioning from reactive risk mitigation to proactive fraud prevention — a transformation akin to going from installing locks post-break-in to designing a house impervious to intrusion.

Fraudsters, however, are not static entities. They’re evolving with equal sophistication. From synthetic identity fraud to advanced phishing schemes, their playbook is growing exponentially nuanced thanks to the rise of artificial intelligence (AI) and the increasing accessibility of cloud computing.

These compounding advances have lowered the barriers for bad actors, creating what Mastercard’s Chauhan called “asymmetric warfare.” “For fraudsters to win, they only need one transaction to succeed,” he said. “For financial institutions and networks to win, we need to stop them all. Fraudsters’ cost of launching attacks is near zero, thanks to open-source AI tools.”

Still, Chauhan highlighted advances in AI, particularly Mastercard’s Decision Intelligence product, which scores over a billion transactions in less than 50 milliseconds. “As technology evolves, so does our ability to detect and prevent fraud,” he said.

Truist’s Ward noted that consumer education remains a critical, yet challenging, aspect of fraud prevention. “If a deal seems too good to be true, it probably is,” he cautioned. “Businesses and consumers alike need to be vigilant, especially when transacting with unknown entities or offers that appear overly enticing.”

Lowe emphasized the importance of industry-wide adoption of security standards, like passkeys.

“In the same way that I trust physical keys to the physical lock on my home, I trust digital keys for my digital life. You either have it or you don’t. Everyone is standardizing around the passkey technologies adopted by Microsoft, Google, Meta, and this unified approach strengthens the entire ecosystem and makes it exponentially harder for fraudsters to succeed,” he said.

“I’m most excited about device-bound passkeys, whether that be bound into a card or a phone,” Lowe added. “The most important thing is that the passkey is not synced to the cloud … it does some interesting things around turning card-not-present transactions into card-present transactions, because you have a signature proving you have possession of that card … forming that ecosystem, which is very low friction, yet very high yield in terms of authenticity, is extremely valuable.”

Ultimately, achieving the right balance between security and user experience often involves a combination of technology, education and collaboration. At the end of the day, it’s about keeping customers safe and happy.

“It’s not just about deploying new tools,” Ward said. “It’s about designing them in a way that integrates speed and simplicity without sacrificing security.”

“AI is not a silver bullet, but it’s an essential component of a multi-layered defense strategy,” Chauhan said.

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