Mobile Device Encoding Transaction and Fraud Data

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Solution Overview

Problem

Conventional transaction processing systems fail to provide merchants with timely and relevant data, such as fraud risk information and consumer behavioral trends, during transactions, limiting their ability to make informed decisions and offer targeted promotions.

Innovation Solution

A method where a consumer's mobile device receives second data from a payment processing network before initiating a transaction, encodes it with first data like payment credentials into a single data element, and provides it to the merchant, allowing the merchant to process and utilize the data in real-time.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Loss of time

If merchants use conventional transaction processing systems to receive fraud data and chargeback information, then they can obtain some fraud-related data, but the data is received after transactions are completed making it useless for real-time decision-making

Engineering Contradiction:

Improvetime delay in receiving fraud dataVSAvoidusefulness of fraud data

Core Design Contradiction:

Loss of timeVSReliability

Solution Approach 1:

The system performs preliminary actions by obtaining fraud data and chargeback information from data sources before the transaction occurs. The mobile device retrieves this data in advance and encodes it into a data element that is transmitted to the merchant terminal during the transaction, enabling real-time use of the information.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The mobile device acts as an intermediary that bridges the gap between data sources (fraud databases, chargeback systems) and the merchant terminal. It collects, encodes, and transmits the necessary data elements, eliminating the need for direct real-time connections between the merchant system and external data sources.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Reliability

If merchants implement real-time fraud data retrieval systems with multiple communication steps, then they can access timely fraud information, but the number of communications and system complexity increases

Engineering Contradiction:

Improvetimeliness of fraud dataVSAvoidnumber of communication steps

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent merges multiple functions into the mobile device: it acts as a data collector from multiple sources, an encoder that combines fraud data with transaction data, and a transmitter that sends the encoded element to the merchant terminal. This consolidation reduces the number of separate communication steps and system components needed.

Inventive Principle:

Principle #5Merging (Combining)

Solution Approach 2:

The mobile device serves multiple purposes: it functions as a fraud data retrieval system, an encoding device, and a communication interface between data sources and the merchant terminal. This multi-functionality eliminates the need for separate dedicated systems for each function, reducing overall system complexity.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Data Source

PatentUS11100507B2Data passed in an interaction

Publication Date: 2021.08.24 VISA INTERNATIONAL SERVICE ASSOCIATION

AI summary

A method for providing first data and second data for an interaction is disclosed. The first data is beneficial to a first party and necessary for the interaction, while the second data is beneficial to a second party and is not necessary for the interaction. The first data and second data are provided by a first party device in a single data element. A second party device receives the single data element, separates the first data and second data, and processes the first data and second data separately.