Payment Network Server Token Validation for Fraud Reduction
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Digital payment systems face security threats due to their reliance on internet and open networks, leaving merchants with limited control over payment security and making them dependent on issuer or acquirer banks for fraud prevention, which can result in losses and damages.
Innovation Solution
A computer system and method implementing a two-stage authorization process, including merchant authorization and issuer bank authorization, to enhance security in digital payment transactions, where merchants can configure security parameters for different transaction channels and manage their own security settings through a tokenization module.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Speed
If digital payment systems use internet and open networks for convenience, then payment speed and accessibility are improved, but security vulnerability increases
Solution Approach 1:
The patent introduces a payment network server as an intermediary between the merchant server and issuer server. This mediator performs additional authorization checks, token validation, and security verification, adding a protective layer that maintains fast processing while reducing security vulnerabilities inherent in direct internet-based transactions.
2Adaptability or versatility
If merchants accept multiple payment channels to remain competitive, then service versatility is improved, but security management complexity increases
Solution Approach 1:
The payment network server provides universal security management that works across multiple payment channels (card payments, digital wallets, contactless payments, etc.). Instead of requiring separate security systems for each channel, the single payment network server handles authorization, token validation, and fraud detection for all channels, reducing complexity while maintaining versatility.
Solution Approach 2:
The payment network server acts as a central intermediary that merchants interact with for all payment channels. This consolidates security management into a single point of contact, simplifying the merchant's security infrastructure while supporting diverse payment methods through the same standardized interface.
3Ease of operation
If merchants rely on issuer or acquirer banks for security, then security expertise requirement is reduced, but control over security checks is lost
Solution Approach 1:
The system enables merchants to self-configure security parameters through the payment network server. Merchants can set their own authorization rules, token validation criteria, and risk thresholds according to their specific needs. This self-service capability maintains ease of operation while restoring security control flexibility, as merchants manage their own security policies rather than relying solely on bank-defined settings.
4Reliability
If additional authorization checks are implemented at merchant level, then security is improved, but processing time increases
Solution Approach 1:
The system performs preliminary authorization checks and token validation at the payment network server before transactions are completed. By pre-validating tokens, pre-establishing authorization rules, and conducting initial security verification in advance, the system reduces the time required during actual transaction processing while maintaining enhanced security through multiple authorization layers.
Data Source
AI summary
A computer implemented system and method is disclosed for providing a secure payment transaction between a customer and a merchant. The system includes at least a computer processor and a data storage device, the data storage device comprising instructions operative by the processor to: receive, from an acquirer bank of the merchant, a payment request comprising a payment instrument associated with a customer and a merchant token associated with a merchant, map the merchant token to predefined parameters established by the merchant for performing a merchant authorisation of the payment request, validate the merchant token by checking whether the predefined parameters are met for the payment request, approve or refuse the payment request based on the validation and, if approved, transmit a payment authorisation request to an issuer bank associated with the payment instrument of the customer for issuer authorisation of the payment request and proceed with the secure payment transaction if the issuer authorisation is successful.