Constrained Interaction Token for Fraud Reduction
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Solution Overview
Problem
Interaction tokens, used to reduce fraud risk in the payments industry, still pose risks as they can be stolen and used for illegitimate purchases, necessitating additional security measures to protect both users and merchants.
Innovation Solution
A method and system for provisioning interaction tokens with constraints, including a defined resource, value, and time period, where a communication device generates and transmits an interaction token to a token provider computer, which processes the transaction, ensuring the token's value and validity, thereby limiting its misuse.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If interaction tokens are used to substitute for primary account numbers, then fraud risk is reduced and user confidence is improved, but new fraud risks emerge as stolen tokens can still be used for illegitimate purchases
Solution Approach 1:
The patent applies parameter changes by transforming the interaction token from a static substitution value into a dynamic credential with multiple controllable parameters including time validity period, geographic location restrictions, merchant category codes, and spending limits. These parameter changes ensure that even if a token is stolen, its usefulness is severely limited by the constrained parameters, thereby reducing the harmful effects of token theft while maintaining the fraud risk reduction benefits
2Reliability
If interaction tokens are made more restrictive with constraints on resource, value, and time, then security is enhanced and fraud risk is reduced, but the complexity of token provisioning and management increases
Solution Approach 1:
The patent applies preliminary action by pre-configuring all security constraints (time periods, resource identifiers, interaction values, geographic locations) during the token provisioning phase rather than enforcing them during transaction processing. The token is generated with embedded constraints that automatically validate themselves during use, eliminating the need for complex real-time verification systems while maintaining high security standards
3Ease of operation
If automated resource transfer initiation is implemented, then user convenience is improved and time required for resource acquisition is reduced, but the system complexity and potential for automated fraud increase
Solution Approach 1:
The patent applies self-service by enabling the interaction token system to automatically initiate and complete resource transfers without requiring additional user intervention or complex system coordination. The token itself contains all necessary instructions and constraints, allowing it to self-validate and self-execute the transfer process, thereby improving convenience while minimizing the added system complexity
Data Source
AI summary
A communication device may receive input from a user and initiate generation of an interaction token in response. This interaction token can be used by the communication device in order search for a specific resource provider computer from among one or more resource provider computers, and to initiate a resource transfer between the user and a specific resource provider, mediated by a token provider computer.