Merchant Transaction Quality Scoring via Fraud Data Analysis

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Solution Overview

Problem

Current methods lack an objective way to score the trustworthiness of merchants, leading to subjective customer reviews that can be biased and inaccurate, resulting in significant financial losses from fraudulent transactions.

Innovation Solution

A method and apparatus that analyze fraudulent transaction data to calculate a transaction quality score for merchants, filtering those with scores above a threshold for display, allowing consumers to make informed decisions and reducing fraud-related costs.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Measurement precision

If customer reviews are used to rate merchants, then consumers can obtain merchant ratings, but the ratings become subjective and biased leading to inaccurate assessments

Engineering Contradiction:

Improveaccuracy of merchant ratingVSAvoidcomplexity of rating system

Core Design Contradiction:

Measurement precisionVSDevice complexity

Solution Approach 1:

The patent replaces the manual, subjective customer review system with an automated fraud detection and scoring system that objectively calculates merchant trustworthiness based on fraudulent transaction data, thereby eliminating bias while maintaining measurement accuracy

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Solution Approach 2:

The system enables merchants to self-assess their trustworthiness through automatically calculated scores based on their own transaction history, reducing the need for external subjective evaluations while improving rating accuracy

Inventive Principle:

Principle #25Self-service

2Reliability

If no fraud detection system is implemented, then transaction processing is simple and fast, but fraudulent transactions cause significant financial losses

Engineering Contradiction:

Improvetrustworthiness of transactionVSAvoidcomplexity of transaction system

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent implements preliminary fraud detection by calculating merchant trustworthiness scores before transactions occur, allowing consumers to make informed decisions and preventing fraudulent transactions before they cause financial loss

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The patent introduces an intermediary fraud detection layer that objectively assesses merchant trustworthiness based on transaction data, mediating between the consumer and merchant to prevent fraudulent transactions while maintaining system simplicity

Inventive Principle:

Principle #24Intermediary (Mediator)

3Measurement precision

If all merchants are displayed to consumers, then consumers have full choice, but consumers cannot distinguish trustworthy merchants from fraudulent ones

Engineering Contradiction:

Improveability to identify trustworthy merchantVSAvoidinformation about merchant quality

Core Design Contradiction:

Measurement precisionVSLoss of information

Solution Approach 1:

The patent uses visual indicators such as color-coded trustworthiness scores and rating displays to enable consumers to quickly distinguish trustworthy merchants from fraudulent ones, transforming abstract fraud risk data into easily interpretable visual information

Inventive Principle:

Principle #32Color changes

Data Source

PatentUS10275812B2Method and apparatus for denying a transaction detected to be initiated outside of a required application on an endpoint device

Publication Date: 2019.04.30 GENESEE VALLEY INNOVATIONS LLC

AI summary

A method, non-transitory computer readable medium, and apparatus for calculating a transaction quality score of a merchant are disclosed. For example, the method analyzes fraudulent transaction data in a fraudulent transaction data table for each one of a plurality of merchants, calculates a transaction quality score for the each one of the plurality of merchants based on the fraudulent transaction data, filters the plurality of merchants having a respective transaction quality score above a threshold and transmits the plurality of merchants having the respective transaction quality score above the threshold for display.