Real-Time Fraud Verification System for Payment Transactions

Resolve Bottlenecks,
Find Innovative SolutionsGenerate Solutions

Solution Overview

Problem

Current methods for identifying fraudulent transactions in payment systems are inefficient, leading to unnecessary network traffic, inaccuracies, and increased costs due to misidentification, and lack flexibility in handling geographic location changes of cardholders.

Innovation Solution

A system and method for real-time fraudulent activity verification that intercepts electronic transaction messages, updates fraud-related decline codes to hold codes, and generates authentication requests to verify transaction legitimacy, using a user's mobile device to input authentication data, thereby reducing false declines and improving accuracy.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Measurement precision

If geographic location-based fraud detection is used to identify fraudulent transactions, then fraud detection accuracy is improved, but false positive rate increases causing unnecessary transaction declines

Engineering Contradiction:

Improvefraud detection accuracyVSAvoidtransaction processing reliability

Core Design Contradiction:

Measurement precisionVSReliability

Solution Approach 1:

The system performs preliminary actions by proactively notifying cardholders of upcoming travel dates and obtaining advance authorization before transactions occur in geographic locations. This prevents false declines by having authorization decided beforehand, rather than reacting at the point of transaction.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system implements feedback mechanisms where cardholders receive notifications about their upcoming travel dates and can provide feedback by confirming or correcting the information. This feedback loop ensures accurate geographic parameters are stored, reducing false positives while maintaining fraud detection accuracy.

Inventive Principle:

Principle #23Feedback

2Ease of operation

If call center methods are used to update cardholder travel information, then cardholder notification is possible, but system efficiency deteriorates due to manual processes and human error

Engineering Contradiction:

Improvecardholder notification capabilityVSAvoidtransaction processing efficiency

Core Design Contradiction:

Ease of operationVSProductivity

Solution Approach 1:

The system enables cardholders to self-service by automatically receiving travel date notifications and providing authorization feedback directly through the system. This eliminates the need for manual call center interactions, improving both ease of operation and processing efficiency simultaneously.

Inventive Principle:

Principle #25Self-service

Solution Approach 2:

The system replaces the mechanical call center process with an automated electronic notification and feedback system. This substitution eliminates human error, reduces manual labor, and maintains ease of cardholder interaction while dramatically improving processing efficiency.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

3Measurement precision

If traditional fraud detection systems are used, then fraudulent transaction identification is attempted, but network traffic increases due to multiple communications required to resolve false declines

Engineering Contradiction:

Improvefraudulent activity identificationVSAvoidnetwork traffic

Core Design Contradiction:

Measurement precisionVSLoss of energy

Solution Approach 1:

The system performs preliminary fraud detection and cardholder authorization before transactions occur. By resolving potential fraud issues in advance through automated notifications and获得的 authorization, the system prevents multiple retry communications, thereby reducing network traffic while maintaining accurate fraudulent activity identification.

Inventive Principle:

Principle #10Preliminary action

4Device complexity

If geographic parameters are not precisely tracked, then system complexity is reduced, but fraud detection accuracy deteriorates

Engineering Contradiction:

Improvesystem complexityVSAvoidanticipated location parameters

Core Design Contradiction:

Device complexityVSMeasurement precision

Solution Approach 1:

The system performs preliminary collection of precise geographic parameters during cardholder registration and travel planning phases. By gathering detailed location information in advance when the cardholder is actively providing data, the system achieves high measurement precision without adding complexity to the core transaction processing system.

Inventive Principle:

Principle #10Preliminary action

Data Source

PatentUS10417638B2Method and system for real time fraud decisioning in transaction processing

Publication Date: 2019.09.17 MASTERCARD INT INC

AI summary

A computer-implemented method comprising: intercepting, from an output of fraudulent activity determination software, an electronic transaction message; reading by a processing device, the intercepted message; detecting, that the received electronic transaction message includes a data field comprising a fraud-related decline code; updating, by the processing device, the received electronic message by replacing the fraud-related decline code with a hold code; generating, based upon the detection of the fraud-related decline code, at least one authentication request message configured to prompt at least one of a point of sale device and a user mobile device that authentication data is to be input by a user; transmitting, by a transmitting device and to the point of sale device, the updated electronic transaction message; and transmitting, by the transmitting device and to at least one of the point of sale device and a user mobile device, the at least one authentication request message.