Mobile Payment Tokenization for Fraud Reduction
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Solution Overview
Problem
Existing payment transaction systems face security risks due to the transmission of sensitive account information, which can be misappropriated or intercepted, despite encryption efforts.
Innovation Solution
A mobile device-based system that receives transaction information from a point of sale device, generates a request to approve or decline transactions, and communicates with a transaction processor using an identifier associated with the mobile device, thereby safeguarding sensitive information and reducing the risk of fraud.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If account number is transmitted to merchant for payment transaction, then payment transaction can be completed, but security risk increases due to potential misappropriation or interception
Solution Approach 1:
The patent extracts the account number transmission step from the traditional payment flow. Instead of transmitting the account number to the merchant, the system uses a tokenization approach where the account number is replaced with a token or reference that can be processed by the merchant without exposing the actual sensitive data. This removes the harmful element (account number exposure) while preserving the useful function (payment processing).
Solution Approach 2:
The patent introduces an intermediary component (such as a payment gateway or tokenization service) that acts as a mediator between the consumer and merchant. The intermediary handles the sensitive account information securely, translating it into a form that can be processed by the merchant without exposing the original sensitive data. This intermediary layer protects against misappropriation and interception while enabling transaction completion.
2Object-affected harmful factors
If encryption is used to protect account number transmission, then security is improved, but transmission complexity and processing overhead increase
Solution Approach 1:
The patent applies preliminary action by performing tokenization or encryption of the account number before it leaves the consumer's device. The sensitive data is transformed into a secure format in advance, so that subsequent transmission and processing by the merchant do not require complex security measures. This preliminary security step simplifies the overall system complexity while maintaining strong protection.
Solution Approach 2:
The patent changes the parameter of the account number from its original sensitive form to a transformed secure form (token or encrypted value). This parameter transformation occurs at the source, allowing the merchant to process the transaction using the transformed parameter without needing to implement complex decryption or security verification systems, thereby reducing overall transmission complexity.
Data Source
AI summary
Systems, methods and apparatus for facilitating transactions using a mobile device are provided by certain embodiments of the invention. Information associated with a proposed transaction may be received at a mobile device from a point of sale device. The mobile device may communicate a request to approve the proposed transaction to a transaction processor. The request may at least a portion of the received information and an identifier associated with the mobile device. The transaction processor may determine whether to approve the proposed transaction and communicate an approval or decline message to the point of sale device.