Funds Transfer Authentication via Time-Limited Payee OTP
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Solution Overview
Problem
Electronic fund transfers lack confirmation of the recipient's identity, leading to potential disputes and security issues, as the recipient can deny receiving the funds without verification.
Innovation Solution
A system and method for funds transfer authentication that includes receiving a transfer request, identifying and authenticating the payer and payee, generating and sending time-limited one-time passcodes (OTPs) to both parties, and transferring funds only upon successful verification of these OTPs within set time limits.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If electronic fund transfers are conducted without recipient verification, then transaction speed and convenience are improved, but security and identity confirmation deteriorate
Solution Approach 1:
The patent introduces an intermediary verification system that acts as a mediator between the payer and payee. The system generates and verifies time-limited OTPs through an automated authentication component, ensuring recipient identity confirmation without requiring direct interaction between parties. This intermediary mechanism resolves the contradiction by maintaining transaction convenience while adding security verification.
Solution Approach 2:
The patent implements preliminary authentication actions by generating and sending OTPs to the payee before the fund transfer is completed. The payee must verify the OTP in advance, confirming their identity before receiving funds. This preliminary verification step ensures security is established before the actual transaction occurs, resolving the contradiction between convenience and reliability.
2Reliability
If recipient authentication is implemented, then security and dispute prevention are improved, but transaction complexity increases
Solution Approach 1:
The patent uses disposable, time-limited OTPs that are generated and consumed in a single transaction. Each OTP is valid only for a specific time window and transaction, making it a temporary, single-use verification element. This approach provides strong security without requiring complex long-term authentication infrastructure, as each verification is self-contained and ephemeral.
Solution Approach 2:
The authentication system operates autonomously by automatically generating, sending, and verifying OTPs without requiring manual intervention from bank staff or complex human verification processes. The system serves itself by managing the entire authentication workflow through automated components, reducing operational complexity while maintaining high security standards.
3Reliability
If time-limited OTP verification is required, then irrefutable confirmation of receipt is achieved, but transaction time increases
Solution Approach 1:
The patent implements dynamic time limits for OTP validity, adjusting the verification window based on transaction requirements. The system balances security needs with user convenience by setting appropriate time thresholds that are long enough to allow verification but short enough to prevent misuse. This dynamic approach ensures irrefutable confirmation of receipt while minimizing the time burden on users.
Data Source
AI summary
The innovation disclosed and claimed herein, in one aspect thereof, comprises systems and methods of funds transfer authentication. The authentication can include receiving a transfer request to transfer funds from a payer to a payee, the transfer request identifies the payer, the payee, and an amount to transfer. Customer information associated respectively with the payer and the payee is identified. The payer and the payee are authenticated. A communication session is opened between the payer and payee. A time-limited payee OTP is generated and sent to the payee. The payee OTP is received within a first time limit. The funds are transferred from the payer to the payee based on receiving a matching payee OTP.