Payment Instrument Verification via Dispute Amount Comparison
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Solution Overview
Problem
Existing methods for verifying the authority to use payment instruments are either inconvenient, requiring multiple PINs or involve potential value transfers and system integration challenges, and can be vulnerable to unauthorized use.
Innovation Solution
A system and method that involves a communication device, processor, and memory to initiate a financial transaction with a payment instrument, generate a dispute amount, and verify ownership by comparing a dispute amount with a comparison amount received from a financial institution, allowing authorization without actual value transfer.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If a second verification method such as PIN is required with every transaction, then security is improved, but user convenience deteriorates due to needing to remember numerous PINs
Solution Approach 1:
The system performs verification in advance by initiating a test transaction and comparing the result with expected values before actual use. This preliminary verification establishes security credentials without requiring the user to remember multiple PINs during transactions.
Solution Approach 2:
The system introduces an intermediary verification mechanism that acts as a mediator between the user and the payment instrument. Instead of directly requiring PINs from users, the system uses automated test transactions and result comparisons to verify ownership, reducing the burden on users while maintaining security.
2Reliability
If a test transaction method is used to verify payment instrument ownership, then security is improved, but system complexity increases due to required systems integration and process changes
Solution Approach 1:
The verification system is designed to work with multiple payment instruments and financial institutions through standardized interfaces. The same verification process can be applied across different card types and issuers, reducing the need for custom integrations and simplifying the overall system architecture.
3Reliability
If a test transaction is initiated to verify ownership, then security is improved, but potential value transfer occurs or multiple transactions are required
Solution Approach 1:
The system uses a de minimus test transaction amount that is sufficient to verify ownership but too small to represent meaningful value transfer. This partial action approach provides security verification while minimizing any potential loss or value transfer.
Solution Approach 2:
The verification process uses feedback from the test transaction result to determine ownership. By comparing the actual test transaction outcome with the expected value, the system can verify ownership without requiring multiple transactions, as the single test transaction provides sufficient feedback for verification.
4Reliability
If test transaction amount is used as verification method, then security is improved, but vulnerability to guessing or prediction increases
Solution Approach 1:
The system generates the test transaction amount dynamically as part of the verification process rather than using a fixed predetermined amount. This preliminary generation of unique verification values for each verification attempt makes guessing or prediction significantly more difficult.
Data Source
AI summary
A system of verifying a purported registrant's ownership or control of a payment instrument includes a communication device, a memory and a processor coupled to the communication device and to the memory. A payment instrument verification module stored in the memory and executable by the processor is adapted to receive information relating to the payment instrument from a registrant, initiate a financial transaction involving the payment instrument via the communication device, generate a dispute amount for the financial transaction, receive via the communication device a notification from a financial institution of the registrant that the financial transaction has been disputed by a comparison amount and compare the comparison amount with the dispute amount for purposes of verifying the payment instrument.