Intermediary Authentication Server for Non-Internet Payment Transactions
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Solution Overview
Problem
Current credit card transactions, especially non-Internet based ones, face high frequencies of chargebacks due to fraud and other issues, leading to significant losses for merchants and increased commission fees for credit card issuers, with existing authentication methods being inadequate for protecting merchants from fraudulent transactions.
Innovation Solution
A system and method that converts non-Internet based transactions into e-commerce transactions, utilizing credit card issuers' authentication programs like 'Verified by Visa' or 'MasterCard SecureCode', allowing cardholders to authenticate directly with their issuers through secure online processes, thereby reducing the risk of chargebacks.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If non-Internet based transactions are processed using traditional authentication methods, then transaction convenience is maintained, but chargeback frequency increases and merchant protection decreases
Solution Approach 1:
The patent introduces an intermediary authentication system that bridges traditional non-Internet transactions with modern authentication protocols. The system uses an authentication server as a mediator between the merchant terminal and the cardholder, enabling secure verification without requiring direct Internet access from the cardholder's end. This intermediary approach allows traditional transactions to benefit from enhanced authentication while maintaining their convenience.
Solution Approach 2:
The patent replaces traditional mechanical authentication methods (manual verification, physical card presence) with electronic authentication mechanisms. The system substitutes the mechanical card-present verification process with an electronic authentication protocol that uses cryptographic verification, allowing the authentication server to verify cardholder identity and transaction authenticity through digital means rather than physical interaction.
2Reliability
If authentication programs like Verified by Visa or MasterCard SecureCode are implemented, then merchant protection from fraud improves, but transaction processing complexity increases
Solution Approach 1:
The authentication server acts as an intermediary that handles the complexity of authentication programs on behalf of the merchant terminal. Rather than requiring the merchant's Point-of-Sale system to directly implement and manage complex authentication protocols, the server mediates the authentication process, absorbing the complexity and presenting a simplified interface to both the merchant and cardholder.
Solution Approach 2:
The system enables the cardholder to perform self-authentication through the authentication server without requiring manual intervention from the merchant. The cardholder initiates the authentication process, provides their credentials, and receives verification automatically, making the complex authentication process transparent and automated from the user's perspective.
3Ease of operation
If traditional authentication methods are used for non-Internet transactions, then ease of operation is maintained, but loss from fraudulent transactions increases
Solution Approach 1:
The authentication server serves as a protective intermediary that sits between the merchant terminal and potential fraudsters. It maintains the ease of operation for legitimate transactions by automatically verifying cardholder identity and transaction authenticity, while simultaneously protecting against fraudulent transactions without requiring additional manual verification steps from the merchant or cardholder.
Solution Approach 2:
The patent substitutes traditional mechanical authentication (relying solely on physical card presence and manual verification) with electronic authentication mechanisms that provide both ease of operation and fraud protection. The electronic verification process automatically confirms transaction legitimacy, replacing the need for manual checking while simultaneously preventing fraudulent transactions.
Data Source
AI summary
A system and method for use in the authentication of payment instrument non-Internet transactions. A server transmits the transaction information to the authentication network associated with the issuer of the cardholder's card to determine whether the cardholder is enrolled in the card issuer's authentication program, and if so, will transmit a notification to the cardholder which includes instructions on how the cardholder can use an Internet connection to complete the authentication process for the transaction. When the cardholder accesses the server website and inputs the verification code previously generated by the server, the cardholder is automatically redirected by the server to the specific Internet link provided by the authentication network, which corresponds to the cardholder's transaction, so that the cardholder may complete the authentication of the transaction.