Processors should send new and renewal plastic cards to credit union member cardholders in an inactive mode. Before using the cards, cardholders must activate the cards by going through customer verification procedures. Card activation programs can significantly reduce the plastic card losses associated with the theft of cards from the mail. When the merchant passes the card through the point of sale reader at the time of sale, the transaction will be rejected and not receive authorization if the special code on the card does not exist or does not match the code maintained by the card processor. Neural Network .
Neural networks track spending patterns of both cardholders and typical fraud transactions.
If monitored effectively, neural networks can detect fraudulent use of a plastic card. By employing and continuously monitoring neural networks, credit unions or their processors can react faster and more efficiently to signs of potential fraud. However, some processors have decided not to perform weekend monitoring of transactions, thereby greatly reducing the neural network's effectiveness. 7-days a week, including holidays, to detect potential fraud early on. Stand-in processing involves authorization of cardholder transactions when the issuer's processor is unable to perform the authorization.