Stripe Uses Billions of Transactions to Train Its Artificial Intelligence Model
According to Stripe, its AI-driven payments platform can more effectively detect fraud due to the extensive amount of data it’s trained on. This was highlighted at an event where the company introduced its Payments Foundation Model, which has been trained using billions of transactions processed through its systems.
Reducing Card-Testing Fraud
One significant improvement is a 64% reduction in card testing fraud. This type of fraudulent activity involves criminals making small transactions to check if stolen card details are still valid. Previously, Stripe’s AI tools managed this issue with mixed success, but the new model has proven more effective.
Other Financial Institutions Follow Suit
Major financial institutions like Mastercard and Visa are also increasing their focus on artificial intelligence. Both have introduced platforms designed to automate transaction processes, from item selection to final purchase.
The Role of Stablecoins
Stripe is entering the stablecoin market with its acquisition of Bridge, a company that specializes in stablecoins. The plan includes offering stablecoin-backed multicurrency cards for businesses to operate using one unified currency regardless of their country.
Broader Offering Plans
In addition to stablecoins, Stripe is planning a range of new services such as tax assistance and streamlined payment integrations. However, it remains unclear whether these additions will significantly impact the company’s growth.
Expert Commentary
“Stripe is relentless in its pursuit of global omnichannel merchants,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “Despite the extensive product stack and required features/functions, large enterprise clients remain elusive.”
“It’s like a sports team that constantly replaces its head coach; one wonders what the true issues are.” Apgar continued.
Stripe’s new fraud model, if it delivers as promised, could be transformative in the industry. However, only time will tell whether these ambitious plans and technologies will ultimately succeed.
