Fraud Detection System Consolidating In-Network and Out-of-Network Transaction Data
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Solution Overview
Problem
Current fraud detection systems lack visibility and ability to analyze fraudulent transactions across various regions and continents, especially when transactions are processed by third-party providers outside of the primary transaction service provider network, leading to incomplete fraud detection and lack of action.
Innovation Solution
A method and system that receive and analyze transaction data from both in-network and out-of-network transactions, identifying consecutive transactions with matching parameters to determine differences, which are then flagged as fraudulent, allowing for denial of authorization and notification to issuer systems.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If a transaction service provider system or payment network processes transactions only within its own network, then fraud detection rules can be implemented effectively within that network, but the system lacks visibility and ability to analyze fraudulent transactions across various regions and continents that are processed by third-party providers
Solution Approach 1:
The fraud detection system is designed to handle multiple types of transactions from different sources (in-network and out-of-network) through a single unified processing platform. The system can process transactions from the transaction service provider network as well as from third-party providers in different geographic regions, making it universally applicable across multiple contexts and eliminating the need for separate fraud detection systems for different regions.
2Adaptability or versatility
If third-party providers process transactions outside the primary network, then transactions can be facilitated in regions where the primary network is not present, but the primary network cannot detect or analyze fraudulent transactions processed by these third-party providers
Solution Approach 1:
The system merges data from multiple sources including in-network transactions from the transaction service provider and out-of-network transactions from third-party providers into a single consolidated fraud detection platform. This combination allows the system to maintain geographic reach through third-party partnerships while preventing loss of fraud visibility by analyzing all transactions together in one unified system.
Solution Approach 2:
The fraud detection system acts as an intermediary that receives transaction data from both the transaction service provider network and third-party providers, processes this data through centralized fraud rules, and generates alerts or decisions. This intermediary role enables the system to bridge the gap between different processing networks while maintaining comprehensive fraud detection capabilities.
Data Source
AI summary
A method, system, and computer program product for fraud detection receive transaction data associated with a plurality of transactions; determine, based on the transaction data, that two or more consecutive transactions associated with a same account identifier include a value for a same at least one transaction parameter; in response to determining that each of the two or more consecutive transactions associated with the same account identifier include the value for the same at least one transaction parameter, determine a difference between the value for the at least one transaction parameter associated with a first transaction of the two or more consecutive transactions and the value for the at least one transaction parameter associated with a second transaction of the two or more consecutive transactions; and determine, based on the difference, that the two or more consecutive transactions are fraudulent transactions.