SECURE BUSINESS AUTOMATIONCard fraud
Card fraud in Hungary
(case study ) and
MON™
fraud prevention system
Mr. Antal KUTHY

President-CEO, E-GROUP Plc
President-CEO, E-GROUP Plc
Board Member of Hungarian Assoc. Of IT Companies
Board Member of Hungarian Assoc. Of IT Companies
& Chairman, Hungarian-Hong Kong Innovative Business
& Chairman, Hungarian-Hong Kong Innovative Business
Council
Council
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= Banking Front-Office Technology
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Integrated Product Portfolio
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Card fraud
Card fraud in Hungary
( a case study )
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market)
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•
The number of transactions executed by the Bank's card
owners through the Bank’s ATMs, reached 65.0 million in
2003 (2005: over 100m)
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Turnover of these transactions was HUF1,594.2 billion, an
increase of 5.6% and 17.8%, resp. over 2002.
•
The number of withdrawal transactions on the Bank’s own
POS network was 6.7 million, the turnover was
HUF1,084.8 billion. (2005 over 10m)
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The number of purchases on POS terminals at merchants
was 42.8 million (34.1% increase) valuing HUF351.4
billion (34.1% increase).
1 EUR=250 HUF
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OTP Bank as Acquirer
Fraud by Type (%)
2003
1998 24,09
1999 5,19
2000 0,45
2001 0,35
2002 0,29
2003 0,25

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ATM robbery takes only <5 minutes
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Team size: 10 specialists enough
Nature of counterfeited cards transactions
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OTP’s acquiring-network monitoring systems
1. On-line Monitoring for detecting suspicious purchases and
ATM transactions
The following POS transaction are monitored:
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Multiple use of Bankcards at the same merchant outlet on a single
day
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Bankcards used at more than 2 different merchant outlets in our
network on a single day
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Purchases where the transaction amount exceeds the daily
average transaction value of the merchant.
Remark: In case of new merchants the value is compared to MCC
average (successful transactions)
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Rejected purchases where transaction amount exceeds the
predefined amounts set by rejected codes
1.
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All Internet, MOTO and other key-entered transactions

suspicious activity has been developed …
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Chargeback Monitoring
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Merchant Authorisation Request Monitoring (considering
previous day; off-line):
Analyis of daily card acceptance activity of a merchant outlet such as total
number and amount of succesful and declined transaction requests, number
of key entered transactions to magnetic stripe read transactions, purchases
with cards with the same BIN etc. and compares the data to the average
parameters characterizing the outlet.
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High Risk Blocking:
The amount of the suspicious purchase is paid to the merchants after the
issuer bank has confirmed the genuineness of the transaction in question.
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On-line Monitoring for detecting suspicious POS and ATM
transactions
The following POS transactions are monitored:
•
Bankcards used several times at the same merchant outlet on
a single day
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Bankcards used at more than 3 different merchant outlets on
a single day
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Purchases where the transaction amount exceeds the daily
average transaction value of the merchant. In case of new
merchants the value is compared to MCC average.

Bankcards used at ATMs located at high risk areas
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Captured bankcards
• Bankcards that have been used more days running abroad
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Off-line Monitoring and other instruments to minimize fraud
Issuer Referral Call Service
–
Off-line Monitoring Program:
Transactions under floor limit are monitored.
–
Collusive Cardholder Monitoring
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Blocked and Expired Card Monitoring:
In case of transactions under floor limit with non-existing cards,
cards are inserted into the international stop-list. If
continuous fraudulent usage arises. Acquirer banks are also
advised of the phenomenon.
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SMS Control Service („MONEYGUARD” : most succesful
innovation implemented 6 years ago)
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Transactions number which appear in the monitoring
system: 3-10,000 / day (>>> Intelligent Analysis is
necessary, special high value add expert systems)
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Monitoring process

End of 1st Part of
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