Mobile Transaction Pre-Authentication via Push Notifications
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Solution Overview
Problem
Current fraud detection systems in financial services often result in unacceptably high false positive rates, leading to legitimate transactions being improperly denied, causing inconvenience to consumers.
Innovation Solution
Implementing a method for pre-authorization of transactions that involves receiving a pre-authorization request, generating a pre-authorization based on the selected payment method, and processing transaction requests associated with the pre-authorization, using a system that includes fraud detection and card authorization systems to determine whether a transaction is associated with a pre-authorization, thereby reducing false denials.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If fraud detection systems deny transaction requests that appear out of the ordinary, then fraud prevention is improved, but false positive rate increases causing legitimate transactions to be improperly denied
Solution Approach 1:
The system performs preliminary authentication actions by sending push notifications to the consumer's mobile device before the transaction is finalized. This advance notification allows the consumer to confirm or deny the transaction in real-time, preventing false denials of legitimate transactions while maintaining fraud detection effectiveness.
Solution Approach 2:
The system implements a feedback loop where the consumer receives real-time notifications about transaction attempts and can provide immediate confirmation or denial. This feedback mechanism allows the system to adjust its fraud detection behavior based on actual consumer intent, reducing false positives while maintaining security.
2Reliability
If fraud detection systems apply strict authentication rules, then fraud prevention is improved, but transaction processing time increases
Solution Approach 1:
The system sends push notifications in advance of final transaction authorization, allowing authentication to begin before the transaction deadline. This preliminary action enables the system to perform thorough fraud checks without delaying the actual transaction completion, as the consumer has already been notified and can respond in real-time.
Solution Approach 2:
The system uses periodic push notifications at strategic moments during the transaction process rather than continuous authentication. This periodic approach maintains security by checking at key decision points while minimizing overall processing time by avoiding constant authentication demands.
Data Source
AI summary
Systems, methods, and computer-readable media are provided for mobile-based transaction pre-authorization. One example method comprises receiving, from a device (such as a mobile device), a pre-authorization request including at least selection of a payment method, and generating a pre-authorization for a purchase based on the selected payment method. The method further comprises receiving a transaction request, determining whether the received transaction request is associated with the pre-authorization, and processing the transaction request based on the determination. Systems and computer-readable media implementing the above method are also provided. User interfaces are also provided for enabling the use of such methods, systems, and computer-readable media on, for example, mobile devices.