STIP Risk Tools

Visa Advanced Authorization (VAA)

Visa Advanced Authorization is an AI-powered, real-time fraud detection system em0bedded in VisaNet. It analyzes up to 400 transaction attributes in milliseconds and assigns a risk score during authorization, helping issuers make better-informed approve or decline decisions.

Key features include:

• Real-time risk scoring — evaluates transactions instantly to flag potential fraud. Scores range from 01 (lowest risk) to 99 (highest risk).
• AI-powered analysis — uses deep learning to detect patterns across billions of transactions.
• Global data insights — leverages Visa's worldwide data to identify fraud trends by region, card type, and transaction type.
• Issuer customization — risk scoring can be tailored to specific markets and card portfolios.

Visa Advanced Authorization STIP (VAA STIP)

Background

VAA STIP uses the Visa Advanced Authorization service to let issuers set a threshold between 1 and 99. That threshold is applied within VIP STIP processing (covered in part 2 of the STIP guide).

VAA STIP processing overview

VAA STIP operates in issuer-unavailable situations: for example, when the transaction cannot be sent to the issuer (issuer host signed off, communication lines down) or when the issuer's response times out.

VisaNet compares the VAA risk score with the issuer's VAA STIP threshold and then proceeds as follows:

• If the risk score is less than or equal to the threshold, the transaction proceeds to activity-limit checks (VIP STIP parameters).
• If the risk score is above the threshold, VisaNet declines the transaction.

Visa's default threshold is 30, set based on patterns that indicate likely fraud.

For participating clients, the risk score appears in field 62.21 of the authorization message and is also visible in STIP advices.

Recommendation on VAA STIP participation

VAA STIP can feel restrictive. When some clients left the default threshold unchanged at launch, they saw significant increases in STIP declines because many transactions scored above the threshold.

Remember that STIP is where issuers have less control than on their own host. For transactions you consider low risk, you can approve them on your host according to policy, but in STIP you must tune the threshold to your risk appetite.

For issuers not using Smarter STIP, I recommend enabling VAA STIP, especially if you have no VIP STIP limits or have set low limits. VAA STIP lets you raise limits to preserve service for cardholders in STIP, with Visa screening out transactions whose risk score exceeds 30 and are more likely to be fraudulent.

Do a quick review of average dollar values for STIP-declined transactions, then set VIP STIP limits at a level that balances risk and customer service. Because the default threshold of 30 reflects the VAA engine's view of lower-risk transactions, you might lower it to 20 if you prefer a bit more safety for risk management. You can always adjust it as you monitor your (hopefully) rising STIP approval rate. 😊

Visa Risk Manager (VRM)

Background

As the payments market grows, evolving fraud patterns have increased the need for dynamic, robust, and unified risk-management solutions across issuers, acquirers, and processors. Visa Risk Manager (VRM) is a global leader in this space, offered as a web portal and API-enabled platform that delivers real-time fraud detection, configurable rules, and workflow automation.

VRM core capabilities overview

Visa Risk Manager is designed for card issuers and their delegates (such as processors or fintech's) to prevent fraud losses, increase operational efficiency, and improve profitability.

Features include:

• Rule-based fraud detection — create, simulate, and deploy custom fraud rules leveraging Visa Advanced Authorization (VAA) risk scores.
• Real-time batch monitoring — analyzes transactions as they occur, flagging, approving, or declining based on bespoke strategies.
• Account management — manage account-level allowlists, blocklists, and exception lists.
• Alert management — case management for reviewing and updating transaction alerts.
• Reporting — track account, transaction, and rule performance.

These capabilities are available via Visa's web portal or through automated integrations using VRM's published APIs.

Batch Processing Capabilities

For legacy or high-volume environments, VRM supports:

• Batch file uploads — scheduled or ad hoc transfers for account management or bulk alert updates.
• CSV/XML/JSON support — formats commonly handled by core banking systems and data warehouses.
• Secure channels — SFTP, TLS-encrypted exchange, or API-driven batch endpoints.

Batch integration is typically used for large-scale periodic updates (for example, bulk adding compromised accounts to a blocklist or ingesting legacy transactions for retrospective analysis).

Actions (Decline, Approve, Flag)

A core VRM strength is granular, customized actioning that can extend across participant systems:

• Action configuration — map each rule to a system-wide action (decline, approve, refer, flag, or challenge).
• Escalation and overrides — flagged transactions can trigger step-up authentication, manual review, or a funds hold.
• Feedback loops — final outcomes are reported back to VRM via API, enabling continuous tuning and closed-loop analytics.

Optimizing VRM usage

VRM is a powerful tool with features that materially improve risk control, so it is important to optimize configuration and operations to get the most benefit.

VRM as a driver of authorization rates

While VRM is often viewed as a way to prevent fraudulent approvals, it can also improve authorization rates by enabling confident approvals, which supports revenue growth.