Cardless Payment Challenge Flow for Fraud Screening
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Solution Overview
Problem
Existing payment systems face challenges in preventing unauthorized transactions due to compromised account information, with existing fraud detection methods being account- and issuer-oriented, time-constrained, and requiring significant infrastructure changes, leading to increased online payment card fraud and false-positive declines.
Innovation Solution
A system where challenge questions are sent to consumers after receiving payment information, allowing for a more complex risk analysis and authentication process, with the ability to obtain additional authentication information and device details directly from the consumer, without altering the merchant's infrastructure.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If challenge questions are sent to consumers after receiving payment information, then authentication security is improved, but transaction processing time increases
Solution Approach 1:
The system performs preliminary risk analysis and sends challenge questions immediately after receiving payment information, before the authorization request is sent to the issuer. This preliminary authentication action allows the system to prepare and evaluate security challenges without extending the official authorization time window, thereby improving security while maintaining transaction speed.
2Reliability
If complex risk analysis is performed, then fraud detection capability is improved, but system complexity increases
Solution Approach 1:
The system segments the fraud detection process into distinct components: initial risk analysis performed before payment information is received, challenge question generation and sending, and final authorization. This segmentation allows complex risk analysis to be conducted in manageable stages without overwhelming system complexity, as each segment can be independently optimized and managed.
3Reliability
If additional authentication information is obtained from consumers, then security is improved, but ease of operation deteriorates
Solution Approach 1:
The system applies partial authentication by sending challenge questions only to transactions that fail the initial risk analysis threshold, rather than requiring all consumers to answer challenge questions. This partial action maintains ease of operation for low-risk transactions while improving security for suspicious transactions, balancing both requirements effectively.
Data Source
AI summary
Systems, methods, and apparatus for handling and/or authorizing payment requests by a consumer for a transaction are provided. Challenge questions may be presented from the non-merchant to the consumer after receiving the payment information, thereby allowing a judicious determination of when to ask such challenge questions and allowing complex and probative questions. The time limit for such challenge questions may advantageously be unconstrained, while still preserving security. Also, a risk analysis may be started prior to the consumer submitting payment information, thus allowing an efficient and complex risk analysis. Information about an access device used by the consumer may be obtained at the non-merchant from the access device with code sent to the access device from the merchant, and the device information may be used in the risk analysis.