Merchant Trust Score System Using Virtual Credit Card Intermediary
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Solution Overview
Problem
Consumers are uncertain about the legitimacy and safety of unfamiliar merchants when making purchases, leading to risks and inconveniences for both the buyer and financial service providers due to potential fraudulent charges.
Innovation Solution
A system generates a merchant trust score using transaction data and website evaluations, recommending a temporary credit card number for low-trust merchants and allowing preferred payment methods for high-trust merchants, thereby enhancing purchase security.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If a consumer uses their credit card or bank information to make a purchase from an unfamiliar merchant, then the purchase can be completed, but the consumer risks fraudulent charges and identity compromise
Solution Approach 1:
The patent introduces a virtual credit card number as an intermediary between the consumer's real bank information and the merchant. This virtual card number acts as a mediator that allows transactions to proceed while isolating the consumer's actual financial information from potential fraud at unfamiliar merchants
Solution Approach 2:
The patent segments the payment information by creating a separate virtual credit card account distinct from the consumer's primary bank account. This segmentation allows the consumer to make purchases at unfamiliar merchants using the virtual card while protecting their main financial information from exposure
2Reliability
If a consumer avoids using their credit card at unfamiliar merchants due to safety concerns, then fraudulent charges are reduced, but the consumer loses convenient payment options
Solution Approach 1:
The virtual credit card system provides universal functionality by working at both familiar and unfamiliar merchants. It maintains the convenience of credit card payments while adding safety features, allowing consumers to use the same payment method across different merchant types without compromise
3Reliability
If the system provides a temporary credit card number for low-trust merchants, then fraudulent charges are reduced, but the system complexity increases
Solution Approach 1:
The system automatically evaluates merchant trust levels and generates appropriate virtual card numbers without requiring manual intervention. The trust evaluation algorithm and virtual card generation process operate autonomously, reducing the perceived complexity for users while maintaining robust fraud prevention
Data Source
AI summary
Systems for securing transactions based on merchant trust score are disclosed. The system may receive information identifying a merchant from a user device and, in response, retrieve transaction data associated with the merchant and receive website data in response to receiving information identifying the merchant. The system may use a machine learning model to generate a merchant trust score for the merchant, and determine whether the merchant trust score is less than a predetermined threshold. The system may also generate or retrieve an alternative payment method and provide related information or a recommendation to the user device.