Risk Management Service Provider for Payment Platforms
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Solution Overview
Problem
Platforms facilitating payment transactions face challenges in managing payment risks due to chargebacks and fraud, and they are torn between controlling user interactions and outsourcing risk management, as they need unique customer data for informed decisions.
Innovation Solution
A system where a risk management service provider receives user interaction data from platforms, allowing the platforms to handle user interactions without direct interaction with users, and uses this data to identify and categorize risk variables, updating databases and determining viable risks for notification.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If the platform directly interacts with users to collect and verify risk data, then the platform maintains control over user interactions and has access to unique customer data, but the platform must invest in costly personnel and technology for risk management
Solution Approach 1:
The patent introduces a risk management service provider as an intermediary between the platform and users. This intermediary handles the costly tasks of data collection, verification, and risk analysis, allowing the platform to maintain control over user interactions while outsourcing the complex and expensive risk management infrastructure to a specialized third party
Solution Approach 2:
The patent extracts the risk management function from the platform's core operations by allowing the platform to outsource this specific function to a specialized service provider. This separation allows the platform to focus on its primary business while the service provider handles the complex risk management tasks using their own personnel and technology infrastructure
2Device complexity
If the platform outsources risk management to a payment provider, then the platform reduces investment in risk management personnel and technology, but the platform loses control over user interactions
Solution Approach 1:
The risk management service provider acts as an intermediary that the platform can control through API integrations and data sharing agreements, while the service provider handles user interactions independently. This allows the platform to maintain operational control without directly managing the risk management infrastructure
Solution Approach 2:
The patent segments the risk management process into distinct components: data collection by the platform, data verification and analysis by the service provider, and decision-making by the platform. This segmentation allows the platform to maintain control over critical decisions while outsourcing the complex verification processes
3Loss of information
If the platform collects and verifies a wide variety of data points directly from users, then the platform has comprehensive data for risk decisions, but the complexity surrounding risk management increases
Solution Approach 1:
The service provider acts as an intermediary that handles the complex task of collecting and verifying diverse data points from multiple sources. The platform provides access to its unique customer data, and the service provider integrates this with third-party data sources, automatically verifies information, and presents consolidated risk assessments, thereby managing data complexity without losing completeness
Data Source
AI summary
A system includes one or more client members connected to one or more primary users and/or one or more end users. The client member receives risk data from the primary user and the end user, and the risk data includes one or more risk variables. A service provider is connected to the client member, and receives at least one of the risk variables from the client member and identifies whether the risk variable corresponds to an undefined type value or a predefined type value. The service member updates an existing database by storing the risk variable under a non-standard type category when the risk variable is identified as the undefined type value. The service member determines whether the received risk variable is a viable risk and a notification is transmitted to the client member when the viable risk is determined.