Remote Wallet Payment System for Secure Online Transactions
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Card not present transactions over the internet are prone to fraud and chargeback risks due to the lack of verification and security in online payment processes, making it difficult for consumers and merchants to ensure legitimate transactions.
Innovation Solution
A system that allows cardholders to use physical payment cards for secure online transactions by initiating a 'Remote Wallet Payment' option, which uses a security chip to authenticate and process payments through a payment provider, ensuring that the cardholder's payment card data is not transmitted directly to the merchant and is kept private, mimicking a card-present transaction by using a virtual PAN and dynamic transaction data.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If card not present transactions are used for online purchases, then ease of operation is improved, but security and fraud risk worsen
Solution Approach 1:
A payment service provider acts as an intermediary between the cardholder and the merchant. The provider reads card data locally on the cardholder's device, generates a virtual PAN, and transmits only this virtual PAN to the merchant. This intermediary approach maintains the convenience of online transactions while introducing security measures that mimic card-present verification.
Solution Approach 2:
The system creates a virtual copy of the payment card account represented by a virtual PAN. This virtual PAN can be transmitted over networks without exposing the actual card data. The virtual PAN functions as a substitute that maintains transaction functionality while protecting the real card information from exposure to merchants and networks.
2Ease of operation
If card not present transactions are used, then ease of operation is improved, but chargeback risk worsens
Solution Approach 1:
The payment service provider serves as a mediator that collects full card data locally and generates virtual PANs for transmission to merchants. This intermediary layer ensures that merchants never receive actual card data, reducing their incentive and ability to engage in chargeback fraud while maintaining the convenience of online shopping.
Solution Approach 2:
The system extracts and processes the actual card data locally on the cardholder's device rather than transmitting it over the network. By taking out the sensitive card data handling from the network transmission phase and performing it locally, the system eliminates the harmful exposure of real card data to merchants while preserving transaction functionality.
3Reliability
If physical payment cards are used for online transactions, then transaction authenticity is improved, but device complexity worsens
Solution Approach 1:
The payment service provider acts as an intermediary that handles the complex tasks of reading physical card data, generating virtual PANs, and managing the transmission process. This intermediary approach allows physical card usage for online transactions without requiring complex implementations at the merchant or cardholder ends, as the complexity is centralized in the provider's system.
Data Source
AI summary
Methods and systems for conducting a secure online transaction with a payment card are described. In an embodiment, a user selects a secure payment option during an online transaction which is transmitted to a merchant computer. A notification is received from the merchant computer of initiation of a secure transaction process, and then the user computer enters a secure transaction mode of operation and establishes a communication session with a payment provider device. The user computer prompts the user to present a payment card to a card reader device, reads payment card data, creates a request message, transmits the request message to a payment provider computer causing the payment provider computer to provide substitute payment card details to the merchant computer to complete the online payment transaction, and then exits the secure transaction mode.