Push Payment System Using Intermediary to Reduce Fraud
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Solution Overview
Problem
Existing payment systems are vulnerable to fraud, particularly when consumers provide their account credentials to merchants, which can lead to unauthorized transactions and compromise their financial security.
Innovation Solution
Implementing a push payment system where the merchant provides transaction information to the consumer, who then initiates the payment without sharing their private account details, using encrypted communication and deposit-only accounts to secure transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If consumers provide their account credentials to merchants for payment processing, then the payment process is simplified and completed efficiently, but the risk of fraud and unauthorized transactions increases
Solution Approach 1:
The patent introduces a payment provider as an intermediary between the consumer and merchant. The consumer's account credentials are shared only with the payment provider, not the merchant. The payment provider acts as a trusted mediator that processes the transaction securely, eliminating the need for consumers to expose their sensitive information to merchants while maintaining efficient payment processing.
Solution Approach 2:
The patent segments the payment process into distinct roles: the consumer, the merchant, and the payment provider. By dividing the transaction system into these separate entities with specific responsibilities, the patent allows the consumer to share credentials only with the payment provider segment, while the merchant segment receives only the necessary transaction information, thereby reducing fraud risk without sacrificing efficiency.
2Ease of operation
If merchants collect and store consumers' account credentials for future transactions, then convenience is improved for repeat purchases, but security vulnerabilities and fraud risks increase
Solution Approach 1:
The payment provider serves as an intermediary that securely stores the consumer's account credentials. For repeat purchases, the consumer only needs to authenticate with the payment provider once, and the payment provider handles subsequent transactions using stored credentials. This eliminates the need for merchants to collect or store sensitive credential information, reducing security vulnerabilities while maintaining convenience.
Solution Approach 2:
The patent implements a model where the payment provider creates a secure copy of the consumer's account credentials and stores them in an encrypted manner. This copy is used for future transactions without requiring the consumer to repeatedly share their actual credentials with merchants, thereby improving ease of operation while preventing credential theft risks associated with merchant storage.
3Speed
If wireless payment technologies are adopted at POS terminals, then transaction speed and customer experience are improved, but the risk of credential skimming and unauthorized access increases
Solution Approach 1:
The payment provider acts as a secure intermediary that receives wireless payment data directly from the consumer's device at the POS terminal. The merchant's system only processes the transaction request and receives confirmation, never handling the actual credential data. This intermediary architecture maintains fast wireless transaction speeds while preventing skimming attacks, as the sensitive data never passes through the merchant's potentially vulnerable systems.
Solution Approach 2:
The patent replaces the traditional mechanical model where merchants directly handle credential data with an electronic intermediary system. Instead of merchants collecting and processing sensitive payment information through their systems, the payment provider's electronic platform handles all credential processing securely, substituting the vulnerable mechanical data collection process with a secure electronic intermediary layer that maintains transaction speed while eliminating skimming risks.
Data Source
AI summary
In electronic financial transactions a receiver, or targeted recipient of funds, provides account information to a transmitter, or sender of funds. The transmitter initiates a push of funds from a transmitter funding source to the receiver's funding source processor. In some embodiments the receiver provides a payment card, similar to a credit card, which is read by an electronic device of the transmitter, such as a smart phone. In some embodiments, the receiver provides the account information by way of a bar code, such as a QR code, which is scanned and read by the transmitter's electronic device.