Mutual Authentication for Peer-to-Peer Payments
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Solution Overview
Problem
Traditional peer-to-peer payment platforms face challenges in ensuring that funds are sent to the correct recipient, as errors can occur due to user mistakes or complexities in the platforms, making it difficult to reverse or correct payments once they are posted.
Innovation Solution
A system and method for mutual authentication of peer-to-peer payments, where an authentication server receives a transaction from an initiator user device, sends a challenge to a recipient user device via an out-of-band channel, and determines the validity of the response to ensure that the transaction is completed with the correct recipient, using an escrow account to hold funds until validation is confirmed.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If traditional peer-to-peer payment platforms are used, then payment speed and ease of operation are improved, but payment accuracy and reliability deteriorate due to user mistakes and platform complexities
Solution Approach 1:
The patent introduces an authentication server as an intermediary between the initiator and recipient. This server receives transaction requests, generates challenges, verifies responses through out-of-band channels, and only then releases funds. This intermediary layer adds verification steps that prevent user mistakes while maintaining ease of operation through automated authentication flows.
Solution Approach 2:
The system performs preliminary authentication actions before the actual payment is completed. Challenges are generated and sent to recipients before funds are released, and responses must be verified through separate communication channels. This preliminary verification ensures payment accuracy is established before the transaction is finalized, preventing erroneous payments.
2Reliability
If authentication verification steps are added to ensure payment accuracy, then payment reliability is improved, but transaction processing time and system complexity increase
Solution Approach 1:
The authentication system is designed to be self-service oriented. The recipient automatically receives challenges and can independently provide responses through their own devices and communication channels. The authentication server automatically verifies responses and processes transactions without requiring manual intervention from support staff, reducing time loss despite added verification steps.
Solution Approach 2:
The system uses periodic challenges and responses for authentication. Instead of continuous verification, discrete challenge-response pairs are exchanged at specific intervals during the transaction process. This periodic authentication approach maintains security and accuracy while minimizing the time burden compared to continuous verification.
3Reliability
If multiple authentication channels are used, then payment security is improved, but device complexity and operational complexity increase
Solution Approach 1:
The authentication server is designed with multi-functionality, handling challenge generation, response verification, out-of-band communication coordination, and fund release authorization all through a single system. This universal authentication platform supports multiple authentication channels (SMS, email, voice calls, etc.) without requiring separate complex systems for each channel, thereby improving security while managing complexity.
Data Source
AI summary
Disclosed herein are systems and methods for secure, mutual, peer-to-peer payments. In one aspect, an encrypted secure system for peer to peer payments, comprising an authentication server is disclosed to receive, a model hash key and an encrypted transaction, from an initiator account; store, the model hash key in an associated database; setting, by the authentication server, a validation time limit for storing the hash key; send, the encrypted transaction to a recipient account; receive by the authentication server a response from the recipient account, the response comprising a response hash key; and validate the response, by the authentication server, based on a match between the response hash key and the model hash key.