Cybersecurity has emerged as a key concern at a national, corporate, and individual level in recent years. “Embracing emerging technologies like artificial intelligence (AI) and machine learning (ML) for early threat detection has become paramount,” says Phoram Mehta, APAC chief information security officer (CISO), PayPal, the San Jose, California-based digital payments company. He discusses with Sudhir Chowdhary the rise of generative AI, role of security in ensuring high authorisation rates, and how AI plays a role in fraud detection. Excerpts from a recent interview:
How are enterprises balancing the need for digital progress while staying safe?
How is PayPal leveraging AI, especially GenAI, to ensure safer transactions?
India’s generative AI (GenAI) market is projected to surpass $17 billion by 2030 from $1.1 billion in 2023, growing at a CAGR of 48%, according to India’s Generative AI Startup Landscape Report, 2023. At PayPal, we are excited by the potential of GenAI in cybersecurity. Gen AI is designed to foster adaptive learning and data augmentation, while handling diverse data sets and incorporating real-time fraud-related knowledge. This makes it ideal for implementation in threat detection systems and response capabilities, providing us an opportunity to augment our capabilities and drive greater customer value.
How can companies utilise AI for fraud detection?
As cybercriminals become more sophisticated, businesses in India cannot afford complacency and need to ensure their systems are being enhanced to keep pace. The rise in cyber threats has compelled enterprises to deploy predictive AI models that assign risk scores to transactions, enabling threat response through machine learning.Furthermore, enterprises need to incorporate real-time assessment of customer behaviour which distinguishes legitimate customers from fraudulent ones, ensuring seamless experiences for trusted users. An AI-based fraud protection strategy monitors each transaction and dynamically adapts to evolving fraud patterns, processing vast datasets with multiple variables to identify intricate correlations, thereby ensuring precise fraud detection.
Are payment authorisation rates a critical aspect of customer retention?
Absolutely. Payment authorisation is critical for online businesses, especially in the Asia Pacific region, where the cart abandonment rate stands at a high 79%, surpassing the global average. Many of these abandoned carts result from payment failures, which can stem from various factors. Additionally, the global e-commerce loss due to frauds is predicted to exceed $48 billion in 2023, underlining the need for robust payment authorisation.
How does PayPal ensure high authorisa-tion rates while maintaining security?
PayPal’s platform is equipped with a suite of authorisation rate optimisation tools that include automatic customer data updating, network tokenisation, ML-based model for smart retries, and 3D security, ensuring reduced friction for customers. By prioritising responsible data science, our fraud detection system and strong relationships with issuers help enhance the accuracy of merchant decisioning and reduce security and policy declines.Managing payment processing for global customers for over two decades has provided us with unique insights into how issuers make their authorisation decisions.
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