MasterCard Presentation Prepaid Monitoring 2014

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©2014 MasterCard.

Proprietary and Confidential

Providing an additional layer of

security and prevention

MasterCard Prepaid

Monitoring

©2014 MasterCard.

Proprietary and Confidential April 30, 2014

Catastrophic Attacks, are often highly

sophisticated, precisely planned, and aimed at

rendering issuer systems defenseless

By their design, they are difficult to detect in real-

time—which can have devastating effects

Unlike traditional fraud prevention tools most

issuers do not have global network-level

monitoring capabilities to detect and stop these

types of attacks in real-time

In a class by themselves, catastrophic

attacks can be devastating for issuers

In early 2013, a massive

attack on a prepaid

program resulted in

millions of dollars being

stolen, in a matter of

hours.

In response to this

exposed vulnerability in

the system, MasterCard

Prepaid Monitoring was

developed —to help stop

catastrophic fraud in its

tracks

FRAUD ALERT

©2014 MasterCard.

Proprietary and Confidential April 22, 2014

Complex payment ecosystems—an attractive target for fraudsters

To address these sophisticated attacks,

issuers need a sophisticated solution

Prepaid programs have an expanded value chain—

which criminals see as an opportunity with more

potential points of vulnerability to hack into an

account system

Hackers use sophisticated tactics that typical

anti-fraud tools may not be able to quickly detect

(e.g., changing load values, converting cards from closed- to

open-loop status, enabling cards for ATM use, and creating

duplicate /counterfeit cards for geographically dispersed use)

Once an account system is compromised, it can be

difficult for the issuer to protect against runaway

losses

Leveraging a 24/7

global view,

MasterCard Prepaid

Monitoring

compliments an

issuers existing fraud

tools—providing an

additional layer of

security to stop

catastrophic attacks.

FAST FACT

Page 3

©2014 MasterCard.

Proprietary and Confidential April 22, 2014

Identifying activity in real-time and blocking

at the account level are essential tactics

Here’s How It Works

1) MasterCard monitors prepaid transactions

processed on our network in real time

2) Sophisticated, dynamic decisioning

techniques are used to identify suspicious

activity at the individual account level

3) MasterCard sets five-hour blocks on

suspicious activity at the account level—which

ensures business continuity by leaving the

rest of the prepaid portfolio unaffected

4) The suspicious activity is flagged for issuers,

who are given time to investigate and take

any necessary measures

©2014 MasterCard.

Proprietary and Confidential April 22, 2014

$40M+

Prepaid Monitoring has already proven

successful—blocking catastrophic fraud

94%

Has been blocked by

Prepaid Monitoring in

less than a year since

inception.

”

“

Fraud prevention never stops. Our ability to monitor suspicious

patterns in real-time and immediately act against such activity

is essential to the viability of the entire payment system.

- Ron Hynes, Group Executive, MasterCard – Global

Of total GDV blocked

has been confirmed

as fraudulent

by issuers.

©2014 MasterCard.

Proprietary and Confidential April 22, 2014

Thwarting a major attack in Middle East/Africa region

In March 2014, MasterCard detected and prevented an attack that had the

same patterns associated with potentially catastrophic losses

–MasterCard immediately blocked the attempted

transactions and contacted the issuer

–What would have amounted to millions of dollars

in losses was limited to just a few thousand

Blocking an attempted “brute force” attack

Prepaid Monitoring recently identified and blocked an

attempted CVC2 brute force attack of 46,000 transactions

totaling $4.6 billion. This type of attack has historically

overwhelmed issuers’ processing systems and resulted

in a severe outages and enormous fraud losses.

Recent catastrophic attacks further

demonstrate the value of Prepaid Monitoring Page 6

©2014 MasterCard.

Proprietary and Confidential

Prepaid Monitoring acts as a safety net—

by enhancing existing issuer security tools

Prepaid Monitoring can “step-in” and help issuers:

•Block suspicious activity without impacting the rest

of their portfolio

•Protect their business from ‘catastrophic’ risks

•Support the integrity, reliability and security of

their brand

•Demonstrate to stakeholders and regulators an

increased ability to combat fraud with additional

tools

“Prepaid Monitoring is a

like a ‘circuit breaker’ that

automatically responds to

suspicious activity and

defuses an attack before

it can have an impact.”

Ron Hynes,

Group Executive

MasterCard - Global

QUOTE

Page 7

©2014 MasterCard.

Proprietary and Confidential April 30, 2014

Page 8

Blocking Options—

What to do if/when an attack occurs

MIP Transaction Blocking

Quickly block an entire BIN for all

activity or by broad-level criteria

(e.g., country, region, transaction type,

merchant category)

Fraud Rule Manager

Selectively block upon

variations of sophisticated

data elements

List Manager

Temporarily block or unblock

an individual

primary account number

Stand-In Range Blocking

Block all transactions

during Stand-In

processing only

©2014 MasterCard.

Proprietary and Confidential

For more information on

MasterCard Prepaid Monitoring,

please contact your

MasterCard representative.