Pending Operation Approval and Identity Verification for Fraud Prevention
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Solution Overview
Problem
Existing payment card fraud systems are inefficient and costly, often failing to prevent fraudulent transactions, especially for vulnerable individuals, leading to financial losses for both users and providers, and causing stress and uncertainty for cardholders.
Innovation Solution
A system that requires user authorization and real-time identity verification for pending operations using biometric and secondary verification methods, allowing users to approve or disapprove transactions before completion, thereby reducing fraudulent operations and associated costs.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If artificial intelligence models are used to predict future user behavior based on past user behavior, then fraud detection capability is improved, but accuracy deteriorates in cases of atypical behavior (such as vacation purchases) and the system becomes less reliable for vulnerable individuals
Solution Approach 1:
The system performs preliminary user identity verification before allowing the transaction to complete. This advance verification action ensures that the user is who they claim to be before the transaction is finalized, preventing fraud without relying on predictive models that may misclassify atypical legitimate transactions as fraudulent.
Solution Approach 2:
The system provides real-time feedback to users through approval requests displayed on their devices. This feedback mechanism allows users to immediately confirm or deny transactions, correcting any misclassifications by AI models and ensuring accurate fraud detection for vulnerable individuals through direct user input.
2Reliability
If card providers cover the cost of fraudulent operations and dispute processes, then user protection is improved, but financial loss increases for the card provider
Solution Approach 1:
The system performs preliminary user identity verification and obtains user approval before the transaction completes. This advance action prevents fraudulent transactions from occurring in the first place, eliminating the need for card providers to cover fraud costs or invest in dispute resolution processes.
Solution Approach 2:
The system converts the potential harm of fraud into a benefit by using real-time verification to protect users before transactions occur. This prevents fraudulent operations from succeeding, transforming what would be a financial loss scenario into a secure transaction environment where card providers do not need to reimburse users.
3Reliability
If real-time user identity verification and approval requests are implemented, then fraud prevention is improved, but device complexity increases
Solution Approach 1:
The system uses a universal verification approach that works across multiple transaction types and devices. The same real-time verification mechanism handles various scenarios (online purchases, in-person transactions, mobile payments), reducing overall system complexity by using a single multi-functional verification framework rather than separate fraud detection systems for each transaction type.
Data Source
AI summary
Systems and methods are disclosed for preventing fraudulent operations. In some embodiments, the system or method includes a memory and a processer. Some embodiments include a processor configured to receive pending operation information, the pending operation information corresponding to a secure operation device and including at least one pending operation. In some embodiments, the processor may present an approval request and prompt the user to approve the pending operation and may be further configured to receive a user input including one of an approval or a disapproval of the approval request and upon receiving an approval of the approval request, perform a primary user identity verification to authenticate a user. In some embodiments, the processor may be configured to authorize the pending operation based on the primary user identity verification. In some embodiments, after the operation has been approved and user identity is verified, the system may complete the operation.