Real-Time Purchase Transaction Auditing System
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Solution Overview
Problem
Current auditing systems for product sales are inefficient as they operate in batch format after transaction completion, leading to delayed detection of fraudulent activities and inconsistent decision-making due to reliance on third-party websites, which can be unavailable and result in inconsistent evaluations.
Innovation Solution
A real-time auditing system that includes a merchant computer, an evaluation computer, and a purchase processor computer, which evaluates purchase transactions based on business rules, providing alerts and notifications before the transaction is completed, and allows for immediate intervention by merchants.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of time
If batch format reporting is used after transaction completion, then merchants can submit sales information to reporting entities, but transaction evaluation is delayed and fraudulent activities are detected too late
Solution Approach 1:
The system performs preliminary evaluation of transactions in real-time at the point of sale, before the transaction is completed and the customer leaves. This allows the system to identify potential fraud or policy violations immediately and alert the merchant, preventing problematic transactions from being finalized. The evaluation computer receives transaction data as it occurs and conducts the audit process before the transaction closes.
2Loss of information
If third-party websites are used for purchase history evaluation, then merchants can access acquiring party information, but the website may be unavailable and decision-making becomes inconsistent
Solution Approach 1:
The system extracts the necessary purchase history evaluation functionality from the external third-party website and implements it within the merchant's own evaluation computer. The evaluation computer contains local logic and data structures for evaluating purchase histories, eliminating dependence on external websites. This ensures the evaluation process remains consistent and available regardless of external system status.
Solution Approach 2:
The evaluation computer acts as an intermediary between the transaction data and the decision-making process. It receives transaction information, evaluates it against predefined criteria and purchase history data, and provides consistent evaluation results without requiring direct access to external third-party websites. This intermediary role ensures standardized decision-making across all transactions.
3Productivity
If real-time evaluation is implemented, then transaction monitoring is immediate and fraud can be prevented, but system complexity increases with multiple computer components
Solution Approach 1:
The system is divided into distinct functional components: the merchant computer for data entry and alert reception, the evaluation computer for processing and analysis, and the purchase processor computer for transaction finalization. Each component has a specific role, allowing the system to achieve real-time evaluation capabilities while maintaining manageable complexity through clear functional separation.
Data Source
AI summary
The evaluation system provides a real-time mechanism for auditing purchase request transactions prior to the purchase being completed in order to determine if one or more audit parameters are violated and the transaction should not be completed. An electronic product request can be received from a merchant of the product. The request can identify at least the merchant, the party, and the product requested for purchase. One or more business rules and auditing parameters for auditing the request can be identified based on the identity of the merchant. The contents of the request can then be audited to determine if the request satisfies the audit parameters. The contents of the request can also be used to identify historical transactions for the party, which can be used to determine if the current request violates one or more of the audit parameters.