Dual Authorization Code System for Fraud Prevention
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Solution Overview
Problem
Current security measures for credit card transactions are inadequate, leading to numerous fraudulent transactions due to user and merchant negligence, with existing detection systems often being inaccurate and only effective after a transaction has been completed.
Innovation Solution
A dual authorization code system is introduced, where a static code from a payment card and a dynamic, transaction-specific code from a portable electronic device are used to authenticate transactions, evaluated by an authorization module to provide a transaction authorization indication, enhancing security across various transaction types including in-person, telephone, and online purchases.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If a single authorization code from a credit card is used for transaction authentication, then the ease of operation is maintained, but the reliability of transaction security is insufficient
Solution Approach 1:
The authentication system is segmented into two separate authorization codes: a first authorization code from the credit card and a second authorization code from a portable electronic device. This segmentation divides the security function across multiple components, enhancing overall security while maintaining operational simplicity through the modular design.
Solution Approach 2:
A portable electronic device serves as an intermediary authentication component between the credit card and the transaction system. This intermediary provides an additional layer of security by generating and transmitting a second authorization code that must be combined with the first code for successful transaction authentication.
2Reliability
If transaction-specific dynamic codes are generated and stored in a portable electronic device, then the reliability of transaction security is improved, but the device complexity and operational steps increase
Solution Approach 1:
The portable electronic device automatically generates transaction-specific authorization codes without requiring manual user input. The device performs self-service authentication by autonomously creating, storing, and transmitting the second authorization code, thereby maintaining ease of operation despite the enhanced security measures.
Solution Approach 2:
The portable electronic device pre-generates and stores multiple transaction-specific authorization codes before they are needed for actual transactions. This preliminary action ensures that when a transaction occurs, the authentication process is swift and convenient, as the codes are already prepared and available for immediate use.
3Reliability
If existing detection systems analyze cardholder buying habits to detect fraudulent transactions, then fraudulent activities can be identified, but the detection is often inaccurate and only occurs after transaction completion
Solution Approach 1:
The system implements preliminary anti-action by requiring dual authorization codes before a transaction is completed. This preventive measure stops fraudulent transactions before they can be executed, rather than detecting them after completion. The portable electronic device must be present and provide its authorization code, creating a barrier against unauthorized transactions.
Solution Approach 2:
The authorization module provides immediate feedback on transaction authorization status by evaluating both authorization codes in real-time. This feedback mechanism allows for instant validation or rejection of transactions, eliminating the time delay associated with post-transaction analysis and providing immediate security verification.
Data Source
AI summary
Banking transaction processing apparatus and methods are disclosed. In one general aspect, a banking transaction processing method includes accessing a first authorization code from a first device, such as a credit card, and a second authorization code from a second device, such as a portable phone, at a merchant location, These codes are provided to an authorization module at the merchant location, and a relationship between the first and second authorization codes is evaluated. A transaction authorization indication can then be provided from the authorization module for an in-person transaction with the merchant.