Payee Verification via Test Deposits for Fraud Prevention

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Solution Overview

Problem

Existing technologies lack sufficient means to thwart fraud in online payment transactions involving fraudulent account numbers and identifiers, particularly during account registration, cash-out, and disbursement events.

Innovation Solution

A payee verification method that includes receiving a personal account identifier, initiating a deposit routed according to the identifier, and enabling verifier access to deposit account data for comparison with authentic payee data to authenticate the payee.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If traditional payment verification methods are used, then transaction processing is simple and fast, but fraud prevention capability is insufficient

Engineering Contradiction:

Improvefraud prevention capabilityVSAvoidverification system complexity

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The system performs preliminary verification actions by initiating test deposits and retrieving account data before actual payment transactions. This advance verification establishes account ownership and validates payee information, preventing fraud before real funds are transferred.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The verification system acts as an intermediary between the payment processor and the banking system. It mediates the verification process by receiving account information, initiating test transactions, retrieving account data, and comparing results to validate payee authenticity without disrupting the main payment flow.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Reliability

If rigorous verification processes are implemented, then fraud prevention is enhanced, but transaction processing time increases

Engineering Contradiction:

Improvepayee verification accuracyVSAvoidtransaction processing time

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The system performs a partial verification action using small-dollar test deposits rather than full transaction amounts. This partial action is sufficient to validate account ownership and routing information without the time cost and risk associated with processing full verification transactions.

Inventive Principle:

Principle #16Partial or excessive action

Solution Approach 2:

The system replaces manual verification processes with automated electronic verification. Instead of manual account validation, the system automatically initiates test deposits, retrieves account data through electronic interfaces, and performs automated comparisons, significantly reducing processing time while maintaining accuracy.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

3Reliability

If account data verification is performed, then fraudulent account numbers are detected, but system implementation complexity increases

Engineering Contradiction:

Improveaccount number validityVSAvoidsystem implementation ease

Core Design Contradiction:

ReliabilityVSEase of manufacture

Solution Approach 1:

The verification system utilizes existing banking infrastructure and automated interfaces to perform verification tasks. The system serves itself by automatically initiating test transactions, retrieving account data, and performing validations without requiring manual intervention or complex custom infrastructure, simplifying implementation.

Inventive Principle:

Principle #25Self-service

Solution Approach 2:

The verification system is designed to work with multiple banking institutions and payment processors using standard interfaces and protocols. By implementing a universal verification approach that can handle different account types and banking systems, the solution reduces implementation complexity while maintaining broad applicability and validation capability.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Data Source

PatentUS20250111369A1Systems and methods for account mapping and personal account number linking

Publication Date: 2025.04.03 MASTERCARD INT INC

AI summary

A computer-implemented method for authentic payee verification for online payment transactions includes: receiving a personal account identifier; initiating a deposit routed according to the personal account identifier; and enabling verifier access to deposit account data of a putative payee, with the deposit account data including one or more data types that are comparable to authentic payee data held by a payor for performing the verification.