Client Authentication via Device-Linked Payment Verification
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Solution Overview
Problem
E-commerce transactions face challenges in verifying the identity of parties involved, leading to increased fraudulent activities, with existing solutions burdening card issuing institutions, payment service providers, and consumers, and failing to provide sufficient benefits to all parties involved.
Innovation Solution
A system and method for electronic fraud detection and prevention using a fraud deterrent software module that authenticates users through pre-registered credit/debit card numbers, unique device identification, and IP addresses, with real-time verification and fraud analysis, allowing consumers to set fraud protection levels and enabling secure transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional card-not-present transaction verification is used, then transaction convenience is maintained, but fraudulent transactions increase and security decreases
Solution Approach 1:
The system performs preliminary authentication by contacting the consumer's device before authorizing the transaction. The fraud deterrent software module verifies the consumer's identity and device status in advance, ensuring that only authenticated users can complete transactions. This preliminary verification step prevents fraudulent transactions while maintaining convenience for legitimate users.
Solution Approach 2:
The patent introduces an intermediary fraud detection system that acts as a mediator between the merchant and the payment processor. The system includes a fraud deterrent software module that communicates with the consumer's device, merchant server, and payment network to verify transaction legitimacy. This intermediary layer provides security without significantly impacting transaction convenience.
2Reliability
If fraud verification systems are implemented, then fraudulent transactions are reduced, but system complexity and transaction time increase
Solution Approach 1:
The consumer's device runs a fraud deterrent software module that performs self-verification by checking its own authentication status and device characteristics. The system automatically contacts the consumer's device to verify identity without requiring manual intervention or complex user actions. This self-service approach reduces system complexity while maintaining effective fraud prevention.
Solution Approach 2:
The fraud detection system is designed to work across multiple platforms and devices universally. The fraud deterrent software module can operate on various consumer devices (smartphones, tablets, computers) and integrates with existing payment networks and merchant systems. This multi-functionality reduces the need for separate complex systems for different scenarios.
3Measurement precision
If real-time authentication is performed, then fraud detection accuracy improves, but transaction processing time increases
Solution Approach 1:
The system performs preliminary authentication by contacting the consumer's device before authorizing the transaction. The fraud deterrent software module verifies the consumer's identity and device status in advance, ensuring that only authenticated users can complete transactions. This preliminary verification step prevents fraudulent transactions while maintaining convenience for legitimate users.
Solution Approach 2:
For authenticated consumers with verified devices, the system skips additional verification steps and rapidly processes transactions. Once the consumer's identity and device are confirmed as legitimate, the fraud detection process is expedited, allowing transactions to complete quickly without unnecessary delays. This rushing through of verified transactions minimizes processing time while maintaining accuracy.
Data Source
AI summary
Systems and methods are described for providing fraud deterrents, detection and prevention during e-commerce, e-transactions, digital rights management and access control. Fraud deterrent levels may be automatically selected by a requesting transaction approval entity server (and can be related to level of risk, or security, related to fraud) or may be selected by a consumer. These deterrent levels can determine the manner in which the transaction occurs as well as the types of information that must be provided and validated for successful approval of the transaction. The client can associate their credit card with a specific device, an e-identity, such as an instant messaging identity, and the e-identity is contacted as a part of finalizing a payment transaction so that a client response of ‘approve’ or ‘reject’ can be obtained. The anti-fraud technology also provides for management and storage of historical transaction information. Entity-to-client communication occurs according to merchant permission parameters which are defined by the client and which enable messages sent by the entity to be automatically allowed, rejected, and managed in other ways as well.