Methods and systems for verifying transactions

Abstract

An aspect of the present invention provides a computer-implemented method for verifying authorisation of a transaction. The method comprises the steps of: receiving a request to process an electronic transaction for a predetermined amount of money (215); dividing the predetermined amount into a plurality of charges (225); providing the plurality of charges to facilitate debiting of a financial instrument with each of the plurality of charges (235); receiving information relating to the plurality of charges from a user of the financial instrument after debiting of the charges (245); and verifying the transaction only if the information is correct (255).

Description

CROSS-REFERENCES TO RELATED APPLICATIONS[0001]This application is a continuation application of U.S. application Ser. No. 14 / 140,202, filed Dec. 24, 2013, which is a continuation of U.S. application Ser. No. 13 / 576,477, filed Aug. 1, 2012, which is a U.S. National Phase of PCT / AU2011 / 000377, filed on Mar. 31, 2011, the complete disclosure of which is herein incorporated by reference.TECHNICAL FIELD[0002]The present invention relates generally to payment transactions and more particularly to verification of authorisation of electronic payment transactions and / or financial instruments used to perform such transactions.BACKGROUND OF THE INVENTION[0003]Widespread availability and use of computer systems and the Internet has resulted in electronic financial transactions becoming commonplace. The use of financial instruments such as credit cards, debit cards and bank accounts to purchase goods or services from online merchants or vendors is extremely convenient. However, the number of fra...

AI Technical Summary

Benefits of technology

The present invention provides a computer-implemented method, computer system, and computer program product for verifying authorisation of a transaction. The method involves receiving a request to process an electronic transaction for a predetermined amount of money, dividing the amount into a plurality of charges, and providing the charges to a financial instrument for debiting. The method also includes receiving information relating to the charges from the user of the financial instrument after the charges have been debited. The information is verified only if it is correct. The technical effect of this invention is to enhance the security and accuracy of electronic transactions by verifying the transaction based on the information provided by the user of the financial instrument.

Problems solved by technology

However, the number of fraudulent transactions has also increased substantially.

Merchants have little protection against fraudulent credit or debit transactions, particularly in “card not present” (CNP) circumstances (i.e., where card holders' bona fides cannot be verified by the use of conventional signature comparison or identification checks at the point of sale), and may be responsible the costs of such transactions and transport costs in relation to the goods.

This gives rise to financial risks associated with the transaction, which are generally carried by the merchant.

Such risks include: chargebacks of payment transactions to online merchants (e.g., “disputed” use transactions), fraud for both merchants and cardholders (e.g., unauthorised use of stolen account information to purchase goods and services online), and increased expenses for financial institutions (which are often passed on to the merchant in any case).

This unfortunately also leads to an increased public perception that buying goods and services online is unsafe and not secure, which prevents some consumers from purchasing online.

Whilst rarer than unauthorised use or fraudulent transactions, disputed transactions nevertheless represent a risk for merchants as they are subject to potential chargebacks.

Merchants often rely on delivery services with “signature on delivery” as the principal means to combat this type of fraud, however, this can be often be ineffective as parcels can be signed by others, the signature may be illegible or differ from cardholder's normal signature, or the parcel delivered to addresses that differ from the billing address.

All of these have the potential to create a scenario for possible dispute with the cardholder and are susceptible to a chargeback.

Failure of an AVS check suggests that the purchaser as the originator of the transaction may not be the owner of the card.

Failure of a CVV check suggests that the originator of the transaction may not be in possession of the actual card.

However, these checks are not foolproof as fraudsters are generally able to obtain the necessary information with sufficient effort.

These checks, even if provided at time of transaction, do not always protect the merchant from ‘chargebacks’ whereby the authorised card holder can dispute that the transaction was authorised and claim that it was initiated by an unauthorised third party.

Orders from anonymous proxies are generally considered to represent a higher risk because fraudsters frequently use anonymous proxies to hide their actual IP address.

Such orders could be risky as the goods may be forwarded overseas.

Fraudsters may not always be in possession of the complete address and may be too lazy to do a zip code reverse lookup for additional address information.

However, this is inconvenient and is thus generally only requested under suspicious circumstances.

Furthermore, fraudsters have been known to create credit card images using graphic design software.

This check is generally effective but is time-consuming and inconvenient.

This is considered effective but purchasers generally need to apply separately and in advance for a PIN for CNP transactions, and can often misplace or confuse PINs.

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