Centralized Data Service for Payment Risk Assessment
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Solution Overview
Problem
Current payment authorization systems lack the ability to accurately assess the risk of transactions across multiple payment services due to limited access to historical transaction data, leading to potential fraudulent transactions and increased computational resources spent on chargebacks.
Innovation Solution
A central service is introduced to collect and store historical transaction data from multiple payment services, allowing for secure querying and encryption, which provides more accurate risk assessment by incorporating additional data into the authorization process.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If historical transaction data is stored locally at each payment service, then risk assessment accuracy is improved, but device complexity and memory requirements increase
Solution Approach 1:
A centralized data service is introduced as an intermediary between payment services and historical transaction data. The data service stores and manages transaction data from multiple payment services, allowing individual services to query historical data without maintaining local storage. This resolves the contradiction by externalizing the storage burden while preserving access to comprehensive historical data for accurate risk assessment.
2Measurement precision
If comprehensive historical transaction data is accessed across multiple payment services, then fraud detection accuracy is improved, but data security risks increase
Solution Approach 1:
The system segments data access into two distinct layers: a centralized data service that stores comprehensive transaction data, and payment services that query only the specific historical data needed for authorization decisions. This segmentation allows comprehensive data to be available for improved fraud detection while limiting exposure of sensitive data to only those services with legitimate access needs, thereby reducing security risks.
3Speed
If each payment service maintains its own historical transaction data, then authorization speed is improved, but loss of information increases due to limited data scope
Solution Approach 1:
The centralized data service is designed to serve multiple payment services simultaneously, providing universal access to aggregated historical transaction data from all connected services. This multi-functional approach allows any payment service to benefit from the comprehensive data pool without requiring individual services to maintain their own complete historical records, thus preventing information loss while maintaining authorization speed through efficient querying.
Data Source
AI summary
This disclosure describes, in part, techniques for storing transaction data at a central service, and techniques for querying information associated with the data from the central service when authorizing payment instruments for transactions. For instance, a central service may receive historical transaction data from multiple payment services that authorize payment instruments for merchants, and then store the historical transaction data in one or more databases. A payment service may then receive a request to authorize a payment instrument for a transaction between a merchant and a customer. Based on receiving the request, the payment service can send the central service a message that includes a query for information associated with historical transaction data corresponding to the payment instrument. In response, the payment service can receive the information from the central service and authorize the payment instrument using the information.