Mastercard launched a new On-Demand Decisioning (ODD) tool on September 9, designed to give financial institutions more control over authorisation decisions.
Announced during Mastercard’s RiskX Summit in Rome, the ODD solution will be launched globally on October 1 to all companies on the Mastercard network.
Labelled as the “first offering of its kind”, the Mastercard ODD tool seeks to provide financial institutions new ways to ensure transactions are approved by providing a customisable rules engine to automate personalised company policies for authorisation.
The ODD tool intends to deliver instant approvals and declines when transactions reach the authorisation stage. This will then align with the financial institution’s consumer experience policies.
“Security, flexibility, and reliability are table stakes for any digital experience,” said Laura Quevedo, Executive Vice President of Fraud and Decisioning Solutions at Mastercard.
“It’s important that financial institutions can meet those needs. ODD is a great example of the ways we empower them to do just that with greater agility – it’s a game-changer for decisioning across the industry.”
Mastercard will also be on hand to respond on behalf of the financial institution when processing whether a transaction should be authorised or declined. The global payment company will review and modify the transaction before passing it back to the merchant.
During the unveiling of the new tool, the card giant presented use cases which included a presentation of how financial institutions can set guidelines for transaction approvals, in particular for high-value cardholders, as well as laying out examples of how the solution minimizes declines due to card reissuance.
High-value authorisation
While most transactions are subject to authorisation checks, high-value payments require Strong Customer Authentication (SCA), a two-step authorisation process taking precedence over regular procedures.
Mastercard has adhered to PSD2’s SCA requirements, but has also implemented Identity Check to enable SCA for high-value transactions during the point-the-sale authorisation process.
SCA’s introduction several years ago came amid growing concerns over rising levels of fraud, particularly in the e-commerce sector.
UK Finance revealed £1.17bn was lost due to fraud and scams in the UK last year, with unauthorised fraud increasing to £722m.
However, the UK responded to the increasing levels with the Payments Systems Regulator (PSR) introducing new rules around Authorised Push Payment (APP) fraud.
These new rules see the sender and receiver of the payment split the stolen money 50:50 evenly, with a £85,000 cap set. While only introduced in October 2024, UK Finance found APP fraud decreased last year to £451m.
