Proximity Payment Fraud Prevention via Account Segmentation
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Proximity payment devices are vulnerable to unauthorized reading, leading to potential fraudulent transactions, as they can be used for both proximity and traditional magnetic stripe transactions without adequate security measures.
Innovation Solution
Implementing a system where proximity-device-only account numbers are used exclusively for proximity transactions, requiring these numbers to be read from a proximity payment device at a point-of-sale terminal, and utilizing dynamic security codes to confirm the validity of the device, thereby preventing fraudulent use of stolen account numbers.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If proximity payment devices use the same account numbers for both proximity and magnetic stripe transactions, then versatility is improved, but security deteriorates due to vulnerability to unauthorized reading and fraud
Solution Approach 1:
The account number system is segmented into two distinct types: proximity-device-only account numbers for proximity transactions and traditional account numbers for magnetic stripe transactions. This segmentation isolates the security risk by ensuring that compromised magnetic stripe account numbers cannot be used for proximity transactions, and vice versa.
Solution Approach 2:
The security vulnerability is extracted by removing the ability to use magnetic stripe account numbers in proximity transactions. The system extracts only the necessary functionality for proximity transactions using dedicated account numbers, eliminating the cross-compatibility that enables fraud.
2Reliability
If proximity payment devices implement dedicated proximity-device-only account numbers, then security is improved, but device complexity increases due to separate account number systems
Solution Approach 1:
The system creates a copy of the account number functionality specifically for proximity devices, rather than modifying the existing magnetic stripe system. This copying approach maintains the original system's simplicity while adding proximity capabilities through a dedicated account number system.
Solution Approach 2:
The proximity transaction system acts as an intermediary layer between the payment device and the authorization system. It translates proximity-device-only account numbers into traditional account numbers for processing, thereby simplifying the core system while enabling enhanced security features.
3Reliability
If the system requires proximity-reading for proximity-device-only account numbers, then fraud prevention is improved, but ease of operation deteriorates due to transaction type restrictions
Solution Approach 1:
The system dynamically adapts the account number validation process based on the transaction type. For proximity transactions with proximity-device-only account numbers, the system requires proximity-reading. For other transactions, traditional validation methods apply. This dynamic approach maintains security while preserving operational flexibility.
Data Source
AI summary
A method includes receiving an authorization request for a purchase transaction, and determining whether the authorization request arose from proximity-reading a proximity payment device. The method further includes mapping a first account number included in the authorization request into a second account number associated with the first account number if it is determined that the authorization request arose from proximity-reading a proximity payment device and if the first account number is qualified for mapping. In addition, the method includes transmitting the authorization request to an issuer financial institution with the second account number substituted for the first account number in the authorization request.