Real-time Payment System with Layered Fraud Detection
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Solution Overview
Problem
Current payment systems lack real-time settlement capabilities, leading to delays in fund availability and increased risks of fraudulent or unauthorized transactions, while existing processes for returning funds are manual, costly, and inefficient.
Innovation Solution
A real-time payment system that receives and processes electronic payment requests, includes real-time settlement, and employs tokenization for secure transactions, with automated fraud detection and exception handling to ensure immediate crediting and minimize errors.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Speed
If real-time payment processing is implemented, then transaction speed and fund availability are improved, but system complexity and fraud detection requirements increase
Solution Approach 1:
The system segments fraud detection into multiple layers: real-time rules-based filtering at the payment processing level, and more complex machine learning-based analysis for flagged transactions. This allows fast processing for normal transactions while applying sophisticated fraud detection only when needed.
Solution Approach 2:
The patent introduces an intermediary fraud detection service that sits between the payment processing system and the banking network. This intermediary handles the complexity of fraud detection independently, allowing the core payment system to maintain high speed while still implementing comprehensive security checks.
2Reliability
If real-time fraud screening is implemented for all transactions, then security is improved, but processing time and operational costs increase
Solution Approach 1:
The system applies partial fraud screening to all transactions using lightweight rules-based filters, and excessive (comprehensive) screening only to transactions that trigger risk indicators. This selective approach maintains security while avoiding time delays for low-risk transactions.
Solution Approach 2:
The patent dynamically adjusts fraud detection parameters based on transaction characteristics, risk profiles, and historical data. Low-risk transactions use relaxed parameters for fast processing, while high-risk transactions trigger stricter screening protocols, optimizing the balance between security and speed.
3Productivity
If manual fund return processes are used, then system simplicity is maintained, but efficiency and customer satisfaction deteriorate
Solution Approach 1:
The system implements automated fund return processing that initiates, tracks, and completes reversals without manual intervention. The automated system automatically detects eligible transactions, calculates return amounts, and executes fund returns, freeing customers from manual follow-up while improving efficiency.
Solution Approach 2:
The patent incorporates feedback loops where the system continuously monitors fund return status, updates transaction records, and notifies customers of completion. This automated feedback mechanism replaces manual communication processes while providing real-time visibility into the return status.
Data Source
AI summary
A method, system, apparatus, and computer program for conducting a real-time payment transaction. The method includes receiving a request for payment from a creditor financial institution (FI), and forwarding it to a debtor (FI). A payment transaction message is received from the debtor financial institution, specifying an amount of payment requested in the request, and is forwarded to the creditor FI such that the amount of payment is credited to an account in real-time. The debtor FI can request a return of the payment, in which case the creditor FI can comply therewith or refuse to return the payment. Also, an unsettled financial position of the debtor FI can be settled where that position does not exceed a combination of a pre-funded balance in a settlement account and a net debit cap value, and multiple settlements can be performed depending on a relationship between the position and combination.