Message Protocol Extension for Liability Reallocation
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Solution Overview
Problem
Existing electronic messaging systems are limited in verifying authorized delivery recipients and addressing fraud in chargeback transactions, particularly in online transactions, as they are costly and unable to leverage existing infrastructure effectively.
Innovation Solution
A message protocol extension (MPE) system that reallocates liability by replacing merchant identifiers with issuer identifiers in a transaction's liable party data record, using a computing device to process authorization advice data messages and generate updated messages with a liability update flag, thereby shifting liability from merchants to issuers upon delivery.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If authentication values are generated prior to authorization to verify delivery recipient authorization, then fraud protection is improved, but system complexity and implementation cost increase
Solution Approach 1:
The system generates authentication values before authorization is granted, allowing verification of delivery recipient authorization to occur in advance. This preliminary authentication ensures that only authorized recipients can receive deliveries, preventing fraud before it occurs rather than detecting it after the fact.
Solution Approach 2:
The patent introduces an intermediary authentication mechanism that mediates between the merchant and the delivery recipient. This intermediary system verifies authorization by comparing authentication values, creating a trusted third-party verification layer without requiring direct complex integration between all system components.
2Reliability
If authentication values are generated before authorization and sent through the messaging network, then delivery verification is improved, but network traffic and processing overhead increase
Solution Approach 1:
The system extracts only the essential authentication values from the complete authorization data and transmits only these extracted elements through the messaging network. This selective extraction minimizes network traffic while maintaining sufficient information for verification, avoiding the need to transmit entire authorization records.
Solution Approach 2:
The authentication values are transformed into compact parameter representations that retain verification capability but occupy minimal network bandwidth. By changing the form of the authentication data from detailed authorization records to condensed value pairs, the system reduces processing overhead and network energy consumption.
3Reliability
If liability allocation is updated after delivery, then fraud detection capability is improved, but transaction processing time increases
Solution Approach 1:
The system implements feedback by monitoring delivery confirmation events and automatically updating liability allocation based on verified delivery status. This feedback mechanism ensures that fraud detection is tied to actual delivery outcomes, allowing the system to detect fraudulent patterns while processing updates only when relevant events occur, minimizing unnecessary processing time.
Data Source
AI summary
A method of electronic user message protocol extension for a transaction requiring delivery is provided. The method is implemented using a message protocol extension (MPE) computing device. The method comprises receiving, from a merchant computing device, transaction data including a merchant identifier identifying a merchant as a default liable party, receiving, from a delivery computing device, an authorization advice data message including recipient account data for an account of the recipient, extracting an issuer identifier, reallocating transaction liability by replacing the merchant identifier with the issuer identifier in a liable party transaction record, generating an updated authorization advice data message by inserting, into the authorization advice data message, a liability update flag indicating message protocol extension to the issuer, transmitting the updated authorization advice data message to an issuer computing device associated with the issuer, thereby completing message protocol extension for the item from the merchant to the issuer.