Multi-Merchant Tokenization via Segmented Group IDs
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Solution Overview
Problem
Current tokenization systems in transaction payments centralize sensitive account information, making them vulnerable to security breaches and limiting multi-merchant transactions, as a single breach can compromise numerous accounts and require repeated data entry across related merchants.
Innovation Solution
Implementing multi-merchant tokenization systems that generate and manage tokens with a primary account number, expiration date, and group ID, allowing decentralized storage and secure transactions across multiple merchants, with encryption and validation processes to ensure security and reduce risks for payment processors.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Device complexity
If sensitive account information is centralized at the payment processor, then transaction processing is simplified, but security risk increases significantly
Solution Approach 1:
The patent segments the centralized account information storage into distributed token storage across multiple merchants. Each merchant receives a unique token that represents the customer's account information, eliminating the need for all merchants to access the central database. This segmentation reduces the security risk concentration while maintaining processing efficiency.
Solution Approach 2:
The patent introduces tokens as intermediary representations of sensitive account information. Instead of merchants directly accessing or storing the actual account data, they use tokens that mediate the transaction process. The payment processor validates these tokens without exposing the underlying sensitive information, thus reducing security risks while simplifying transactions.
2Adaptability or versatility
If a single token is made redeemable by multiple merchants, then multi-merchant transactions are enabled, but token security and authorization control become more complex
Solution Approach 1:
The patent applies local quality by giving each merchant a unique token with specific authorization properties tailored to that merchant. Instead of using a generic multi-merchant token, each merchant receives a token with their own identifier and validation rules. This allows multi-merchant functionality while maintaining simple, localized authorization control at each merchant level.
Data Source
AI summary
Systems and methods for multi-merchant tokenization may include receiving a transaction from a point of sale terminal of a merchant, validating the merchant ID against merchant logs, and generating a token for the transaction. The token includes a primary account number, expiration, and a group ID. Additionally, the system provides the primary account number to a payment system and receives a response back. The response is then output back to the merchant along with the token. In subsequent transactions, the system may receive the token from a one point of sale terminal of the merchant. The system validates the merchant ID against merchant logs and ensures the merchant is configured for tokenization. The token is decrypted and the group ID is compared to the merchant ID in the merchant logs. When they match, the primary account number is provided to the payment system for approval.