Token-Based Payment Card Fraud Detection System

Resolve Bottlenecks,
Find Innovative SolutionsGenerate Solutions

Solution Overview

Problem

Existing fraud systems face difficulties in timely detection of compromised payment card information, as multiple breached merchants can complicate analysis, leading to delayed identification and increased fraudulent transactions.

Innovation Solution

A system that generates and manages tokens associated with specific merchants, allowing for quick identification of fraudulent activity by flagging potentially compromised merchants and initiating investigations when unauthorized transactions occur.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Measurement precision

If statistical analysis is performed on fraudulent transactions to determine potentially breached merchants, then the identification of compromised merchants can be achieved, but the analysis time is extended and more fraudulent transactions may occur during this period

Engineering Contradiction:

Improveidentification accuracy of compromised merchantsVSAvoiddetection time

Core Design Contradiction:

Measurement precisionVSLoss of time

Solution Approach 1:

The system performs preliminary actions by proactively monitoring and analyzing transaction patterns continuously, maintaining readiness to detect breaches immediately when they occur, rather than waiting for statistical analysis to be triggered after fraudulent transactions have already happened

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system implements real-time feedback mechanisms where transaction data is continuously analyzed and fed back into the detection system, allowing for immediate identification of compromised merchants as breaches occur, rather than delayed statistical analysis

Inventive Principle:

Principle #23Feedback

2Adaptability or versatility

If multiple merchants are potentially breached, then the scope of compromise is comprehensively identified, but the complexity of analysis increases and detection efficiency decreases

Engineering Contradiction:

Improvecomprehensive detection coverageVSAvoidanalysis complexity

Core Design Contradiction:

Adaptability or versatilityVSDevice complexity

Solution Approach 1:

The system segments the analysis by merchant entity, creating separate detection streams and evaluation processes for each merchant. This allows comprehensive monitoring of multiple merchants while maintaining manageable complexity through modular, independent analysis units that can be processed parallelly

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The system adds a new dimension of analysis by introducing token-level monitoring and merchant-specific transaction pattern recognition. This multi-dimensional approach enables comprehensive coverage of multiple merchants simultaneously while organizing complexity into structured, manageable dimensions rather than a single overwhelming analysis space

Inventive Principle:

Principle #17Another dimension (Dimensionality change)

3Ease of operation

If payment card information is stored for recurring transactions and future purchases, then customer convenience is improved, but the risk of security breaches and fraudulent transactions increases

Engineering Contradiction:

Improvecheckout speedVSAvoidsecurity risk

Core Design Contradiction:

Ease of operationVSObject-affected harmful factors

Solution Approach 1:

The system introduces tokenization as an intermediary mechanism that replaces sensitive payment card information with secure tokens. These tokens enable recurring transactions and future purchases without storing actual card data, thus maintaining customer convenience while eliminating the security risk associated with storing payment card information

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The system uses disposable, single-use tokens that are generated for specific transaction purposes and then invalidated. These short-lived tokens replace persistent storage of payment card information, allowing convenient recurring transactions while minimizing security risks since the tokens become useless after their intended purpose is fulfilled

Inventive Principle:

Principle #27Cheap short-living objects (Disposable)

Data Source

PatentUS11893549B2Systems and methods for detecting potentially compromised payment cards

Publication Date: 2024.02.06 MASTERCARD INT INC

AI summary

A computer-implemented method for detecting potentially compromised payment cards is provided. The method uses a processor in communication with a memory. The method includes storing a plurality of tokens. Each token includes merchant identification data corresponding to a first merchant. The method also includes transmitting the plurality of tokens to the first merchant and receiving an authorization request message from a merchant. The authorization request message includes a token and a merchant identifier corresponding to the merchant. The method further includes determining that the received token is one of the plurality of tokens associated with the first merchant, determining that the merchant identifier does not correspond to the first merchant, transmitting a message including instructions to decline the transaction, and attaching a potentially compromised flag to the first merchant. The potentially compromised flag indicates a heightened probability of fraudulent activity.