A look at Mastercard’s extensive digital payment authentication process

When the Bangko Sentral ng Pilipinas announced its goal to reach at least 50 percent of payments in the Philippines done virtually, banks and digital payments enablers extended their support by boosting their services to make it more accessible to Filipinos, therefore helping boost economic growth. A huge factor in driving financial inclusion to a bigger part of the population is through customer confidence and trust which is attainable by implementing extensive security systems.

Among the technology and financial services companies that took this route is Mastercard. While it is already an established firm with trusted security measures in place, the global payments technology company continues to innovate to ensure that transactions made by cardholders are safe and protected. A proof of this is Mastercard Identity Check™ a global authentication program that employs the new EMV 3-D Secure standards, which improves cardholders’ experience as it doesn’t require them to remember and use a static password while maintaining safety and security.

How the digital payments process works

Once a customer hits the ‘pay’ button when buying goods and services online, card payments undergo two processes: authentication and authorization. Many merchants offering products and services via online platforms leverage Mastercard's authentication service before sending transaction authorization requests. 

Those who are often purchasing via online platforms should be familiar with how authentication works. This usually involves a one-time password (OTP) sent either via the cardholder's registered phone number or e-mail address or through approval in the digital banking app using biometrics like facial recognition or passwords. Whether to authenticate a cardholder or not is decided by the merchant. This security process is to verify whether it is really the cardholder initiating the transaction and not prompted by fraudulent activity. 

A successful authentication process then leads to the authorization process which involves the merchant or the store, the acquirer or the bank the merchant is connected to, the card network like Mastercard, and the card-issuing bank. Each stage of this payment procedure implements its own security checks for consumer and merchant protection ensuring that the payment goes directly where it needs to go -- all efficiently done within just seconds.

Under the authorization process, sensitive information like card numbers, transaction and billing amount, transmission date and time, merchant category, and acquirer bank code are encrypted so that only those who are verified to process the data are allowed to have access.

Optimized online payments with Identity Check

With Identity Check™, Mastercard is introducing another way for even more secure and convenient digital payments. This function uses a risk-based authentication strategy to identify if a transaction is categorized as low risk or non-low risk, based on data shared by merchants. Banks may decide to authorize low-risk transactions in a seamless manner based on available data, while non-low risk ones entail two-factor authentication before the transaction is authorized to validate the identity of the cardholder. This enables a more frictionless checkout experience for cardholders for low-risk transactions.

Identity Check™ leverages Artificial Intelligence-based analysis for authentication which uses 10 times more data from the transaction. It is built on the award-winning Mastercard Decision Management Platform, the core for its business solutions that combat fraud and validate cardholder identity.

In addition, Mastercard also has the Safety Net security tool for authorization which is designed to limit the impact of large-scale fraud incidents through extensive global network-level monitoring. All of these amount to one thing: a better and more secured payment experience for the customers.

Discover more about how Mastercard delivers safe virtual payments for its cardholders and the community through www.mastercard.com.ph.