Dynamic Transaction Card Fraud Mitigation via Wireless Device Scanning
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Solution Overview
Problem
Dynamic transaction cards face challenges in fraud mitigation, as existing technologies do not effectively ensure that only authorized devices present nearby are involved in financial transactions, leading to potential unauthorized transactions.
Innovation Solution
Implementing a system where dynamic transaction cards use short-range wireless communication protocols like BLE to periodically scan their environment, creating a fraud profile of nearby devices, and verifying during transactions that detected devices match the expected subset from the profile, sending an indication to the POS terminal if the transaction is unauthorized.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If dynamic transaction cards use wireless communication to verify nearby devices during transactions, then fraud mitigation is improved, but device complexity increases
Solution Approach 1:
The fraud mitigation system is segmented into distinct functional modules: a scanning module that detects nearby wireless devices, a verification module that compares detected devices against expected devices, and a communication module that interacts with the POS terminal. This segmentation allows each module to perform its specific function independently, improving fraud detection capabilities while keeping the overall card design manageable through modular architecture
Solution Approach 2:
The system performs preliminary scanning and detection of nearby wireless devices during the transaction process before final authorization. By proactively identifying and verifying the presence of expected devices (such as a smartphone or wearable) before completing the transaction, the system prevents unauthorized transactions while maintaining a straightforward user experience
2Reliability
If dynamic transaction cards scan environment periodically to create fraud profile, then fraud mitigation is improved, but use of energy increases
Solution Approach 1:
The card performs environmental scanning at periodic intervals rather than continuously, specifically triggering scans during transaction events when fraud risk is highest. This periodic action approach maintains security by verifying device presence during critical moments while significantly reducing energy consumption compared to continuous scanning, as the low-power sleep mode is maintained between transaction events
Solution Approach 2:
The system dynamically adjusts its scanning behavior based on transaction context, increasing scanning activity during authorized transaction events when fraud mitigation is most critical, and reducing to minimal activity during non-transaction periods. This parameter change in scanning frequency aligns security efforts with actual risk levels, optimizing the balance between fraud detection and power consumption
Data Source
AI summary
Systems and methods disclosed herein provide fraud mitigation via dynamic transaction card wireless communication. A mobile device may cause a dynamic transaction card to periodically scan its environment to detect wireless enabled devices proximately located near the dynamic transaction card. Based on identifying the wireless enabled devices frequently located near the dynamic transaction card, a set of approved devices may be determined. During a transaction, a dynamic transaction card may scan its environment for other wireless enabled devices proximately located near the dynamic transaction card. If wireless enabled devices detected by the dynamic transaction card are all, or a subset, of the devices that are frequently located near the card, then the transaction may be authorized. However, if the wireless enabled devices detected by the dynamic transaction card are not all, or a subset, of the devices that are frequently located near the card, then the transaction may be unauthorized.