Card Not Present Transaction Processing via Intermediary Authentication
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Solution Overview
Problem
Card not present (CNP) transactions are less secure and more prone to fraud due to challenges in authenticating the identity of the individual and the portable financial device, leading to lower authorization rates and higher fraud rates compared to card present transactions.
Innovation Solution
A system and method that processes CNP transactions by receiving authentication and authorization transaction data, including device identification and velocity data, to determine a transaction risk score and generate an authorization decision, enhancing the security and accuracy of CNP transaction processing.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If traditional CNP transaction processing is used, then transaction convenience is improved, but security and fraud protection deteriorate
Solution Approach 1:
The patent introduces an authentication system as an intermediary between the user device and the authorization system. This intermediary collects authentication transaction data (device identification data, velocity data) and transmits it to the authorization system, enabling enhanced security without disrupting the convenient CNP transaction flow. The intermediary handles the complex authentication process while maintaining transaction simplicity for the user.
Solution Approach 2:
The patent performs authentication actions before authorization by collecting authentication transaction data from the user device prior to the main authorization decision. The system gathers device identification data and velocity data in advance, allowing the authorization system to make more informed decisions while maintaining the convenience of remote transactions.
2Reliability
If authentication data collection is enhanced, then fraud detection is improved, but system complexity increases
Solution Approach 1:
The patent segments the authentication process into distinct components: device identification data collection, velocity data collection, and authorization decision-making. By dividing the system into functional modules (authentication system, authorization system), each handling specific tasks, the overall complexity is managed through modular architecture while enhancing fraud detection capabilities.
Solution Approach 2:
The authentication system acts as an intermediary that handles the complexity of data collection and analysis, separating these complex operations from the core authorization process. This intermediary layer manages the complexity of authentication while keeping the authorization system relatively simple and focused on decision-making.
3Reliability
If authentication transaction data is collected, then transaction security is improved, but processing time increases
Solution Approach 1:
The patent performs authentication data collection and analysis in advance before the final authorization decision is made. By gathering device identification data and velocity data preliminarily, the system can make faster authorization decisions while maintaining enhanced security, as the heavy lifting of authentication is completed beforehand.
Solution Approach 2:
The authentication system provides feedback about the authentication status and risk assessment to the authorization system, enabling rapid decision-making. The feedback mechanism allows the authorization system to quickly incorporate authentication results without reprocessing all authentication data, reducing overall processing time while maintaining security.
Data Source
AI summary
A method for processing card not present (CNP) transactions includes: receiving an authentication transaction request including authentication transaction data associated with a CNP transaction, receiving an authorization transaction request including authorization transaction data associated with the CNP transaction; in response to receiving the authorization transaction data and the authentication transaction data, determining an authorization decision for the CNP transaction; and communicating the authorization decision. Systems for processing CNP transactions are also disclosed.