Dynamic Fraud Screening via Mobile Device Proximity
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Solution Overview
Problem
Payment card fraud is a significant concern due to the ease with which criminals can counterfeit and use stolen payment card information for fraudulent transactions, often occurring when the cardholder is not present.
Innovation Solution
A system that determines the location of a customer's mobile device relative to a card reader during a payment transaction, adjusting fraud screening levels based on proximity to verify the cardholder's involvement and streamline or enhance the checkout process accordingly.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If fraud screening is always performed at high level, then security against counterfeit use is improved, but checkout process efficiency deteriorates
Solution Approach 1:
The fraud screening level is made dynamic rather than static. The system automatically adjusts the fraud screening level based on real-time location data comparing the mobile device position with the card reader position. When locations match, the system transitions to lower-level screening; when they differ, it maintains or escalates to higher-level screening. This dynamic adaptation resolves the contradiction by allowing efficient processing for legitimate transactions while maintaining security for suspicious ones.
Solution Approach 2:
The system changes the parameter of fraud screening intensity based on location proximity. By monitoring the spatial parameter (distance between mobile device and card reader), the system adjusts the fraud screening level parameter accordingly. This parameter change enables the system to optimize both security and efficiency depending on the transaction context.
2Reliability
If location-based fraud screening is implemented, then fraudulent transactions are reduced, but system complexity increases
Solution Approach 1:
The system leverages the existing mobile device's location capabilities, which already serve multiple functions including navigation, mapping, and location-based services. By repurposing this existing multi-functional capability for fraud prevention, the system adds security functionality without requiring entirely new hardware or complex infrastructure.
Solution Approach 2:
The patent introduces a fraud screening system that acts as an intermediary layer between the card reader and the payment processing system. This intermediary uses location data as a mediator to determine appropriate screening levels, adding fraud prevention capability while maintaining compatibility with existing payment infrastructure and minimizing overall system complexity.
Data Source
AI summary
In some examples, a computer system may receive transaction information for transactions between card users and a payee that may include transaction card information from a plurality of read events of a plurality of transaction cards at the payee's card reader. In association with the plurality of read events, the system may receive location information of a plurality of mobile devices, each mobile device being associated respectively with one of the plurality of transaction cards in a data structure maintained by the computer system. For instance, the location information for each mobile device may be indicative of a location of the mobile device at a time of a corresponding read event of an associated transaction card. The system may determine an approximate location of the card reader based on the location information of the plurality of mobile devices.