Payment Routing System for Fault Tolerance and Fraud Prevention
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Solution Overview
Problem
Payment transactions fail when a payment rail is down due to unavailability of authentication and authorization systems, leading to increased declined transactions and potential fraud, as stand-in procedures often rely on limited customer information.
Innovation Solution
A method and system that route transactions through an alternative payment rail, using the account identifier and security data from the user to authenticate and authorize the transaction, maintaining security and reducing fraud by employing virtual accounts for internal processing.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If a stand-in system is used to authenticate and authorize transactions when the primary payment rail is down, then transaction processing can continue, but security is compromised and fraudulent transactions increase
Solution Approach 1:
The patent introduces an intermediary system that acts as a bridge between the merchant and the alternative payment rail. This intermediary performs account identifier mapping and coordinates the routing process, ensuring that transactions are securely redirected while maintaining authentication standards. The intermediary prevents direct exposure of sensitive customer information to the alternative rail while enabling secure transaction processing.
Solution Approach 2:
The system performs preliminary account identifier mapping and validation before routing transactions to alternative payment rails. By pre-establishing the mapping between customer account identifiers across different payment rails and pre-validating their compatibility, the system ensures that when a failover is needed, the authentication can proceed securely without exposing customer information or compromising security protocols.
2Ease of operation
If stand-in procedures are used with limited customer information, then transactions can be processed on alternative rails, but the number of fraudulent transactions increases
Solution Approach 1:
The patent extracts and protects sensitive customer information by removing it from the transaction routing process. Instead of exposing customer details to alternative payment rails, the system extracts only the necessary account identifier for routing purposes and uses tokenization to replace sensitive information with non-sensitive tokens. This allows transactions to be processed on alternative rails without exposing customer information that could be exploited for fraud.
Solution Approach 2:
The system creates and uses tokenized copies of customer account identifiers instead of exposing the real identifiers. These tokens serve as secure representations that enable transaction routing and authentication on alternative payment rails without revealing actual customer information. The tokens can be validated and used for authentication purposes while maintaining the security of the underlying customer data.
3Reliability
If account identifier mapping is implemented to route transactions through alternative rails, then security is maintained, but system complexity increases
Solution Approach 1:
The patent implements a universal account identifier mapping system that can handle multiple payment rails and different types of account identifiers (PAN, IBAN, sort code, etc.) through a single unified approach. The mapping service and tokenization framework are designed to be rail-agnostic and type-agnostic, allowing the same infrastructure to support card payments, open banking payments, and other payment types without requiring separate systems for each rail.
Solution Approach 2:
The system implements self-service mechanisms where the account identifier mapping and tokenization processes are automatically performed by the payment system infrastructure without requiring manual intervention. The mapping service automatically resolves account identifiers across different rails, and tokens are automatically generated and managed, reducing the operational complexity despite the increased system capabilities.
Data Source
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AI summary
There is provided a computer implemented method for enabling a transaction to proceed in the event of a fault on a payment rail. The method comprising: receiving a request, from a merchant, to initiate a transaction from a user account to a merchant account, the transaction being of a first payment type associated with a first payment rail; determining that there is a fault on the first payment rail; routing the transaction through a second payment rail and settling the transaction such that funds are transferred to the merchant account.