Proxy Server Authentication for E-Commerce Fraud Reduction
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Solution Overview
Problem
E-commerce transactions over the Internet face challenges in authenticating the rightful account holder without requiring merchants to subscribe to authentication services, which can lead to fraud and misuse.
Innovation Solution
A method and system that utilize a proxy server to determine if the account holder is subscribed to an authentication service, generating an authentication request message if not subscribed, and sending it to an external server for verification, ensuring the account holder is the transaction initiator without relying on merchant subscriptions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If merchants subscribe to authentication services (e.g., 3-D Secure), then transaction security is improved, but device complexity and operational burden increase
Solution Approach 1:
The patent introduces an intermediary authentication mechanism that operates between the merchant and the account holder without requiring the merchant to subscribe to complex authentication services. The system uses an intermediate server to facilitate the authentication process, thereby reducing the operational burden on merchants while maintaining security.
Solution Approach 2:
The authentication process is designed to be self-service oriented, where the account holder automatically receives and responds to authentication requests without requiring merchant intervention. The system leverages existing communication channels (SMS, email, push notifications) to enable the account holder to authenticate themselves, reducing the complexity for merchants.
2Reliability
If standardized authentication services are used, then fraud reduction is improved, but ease of operation deteriorates due to subscription requirements
Solution Approach 1:
The patent creates a universal authentication framework that can be adopted by any merchant without requiring specific subscriptions or partnerships. The system is designed to work with multiple communication channels and authentication methods, making it broadly applicable and easy to implement across different merchant platforms.
Solution Approach 2:
The system performs preliminary authentication actions by sending verification requests to the account holder before the transaction is finalized. This preliminary check ensures fraud reduction while keeping the merchant's operational process simple, as the heavy lifting of authentication is done in advance by the system.
3Measurement precision
If authentication requests are sent to external servers, then measurement precision of account holder identity is improved, but loss of time in transaction processing increases
Solution Approach 1:
The authentication process is implemented as a periodic action with predefined time intervals and response windows. The system sends authentication requests at specific moments in the transaction flow and sets reasonable time limits for responses, balancing identity verification precision with acceptable processing time.
Solution Approach 2:
The system dynamically adjusts authentication parameters such as response time limits, verification methods, and request frequencies based on transaction risk levels and historical data. This allows the system to maintain high identity verification precision while minimizing time loss in low-risk transactions.
Data Source
AI summary
A method is provided. The method includes receiving a request message, the request message relating to a transaction between a first client and a second client, the request message including first client data and second client data, the first client data identifying an account to be used by the first client in the transaction, the second client data indicating if the second client is subscribed to a service. The method further includes determining if the second client is subscribed to the service, and generating an authentication request message if the second client is not subscribed to the service, the authentication request message requesting confirmation that a holder of the account is the first client. The method further includes sending the authentication request message, and receiving an authentication response message from the external server in response, the authentication response message including an indication whether the holder is the first client.