Token-Based Payment Intermediary for Fraud Reduction
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Solution Overview
Problem
Current online payment processing systems require customers to share private account information with multiple merchants, increasing the risk of fraud and making it costly for merchants to maintain direct payment capabilities, while also disrupting the customer's shopping experience with redirects to external payment systems.
Innovation Solution
A method where customers provide entity identification and authentication data to a network-based commerce system, which then communicates this information to a network-based payment system to authorize transfers between accounts, allowing payments to be processed without redirecting the customer, thus enhancing security and user experience.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If customers enter private account information directly on merchant web sites, then payment processing is simple and direct, but the risk of fraud increases and security deteriorates
Solution Approach 1:
The patent introduces a network-based payment system as an intermediary between the customer and the merchant. Instead of customers entering their account information directly on merchant sites, the payment system acts as a mediator that receives the information securely and facilitates the transfer. This resolves the contradiction by maintaining operational simplicity while reducing fraud risk through the intermediary's security measures.
Solution Approach 2:
The patent uses data tokens as copies or representations of actual account information. These tokens contain sufficient information to authorize payments without exposing the customer's real account details to merchants. This allows the system to maintain direct payment processing simplicity while improving security by working with encrypted copies rather than actual sensitive data.
2Productivity
If merchants maintain direct payment capabilities through merchant accounts, then payment processing is efficient and direct, but the cost and complexity for merchants increases
Solution Approach 1:
The network-based payment system serves multiple functions: it processes payments, provides fraud protection, manages customer authentication, and handles fund transfers. By consolidating these functions into a single universal system, merchants don't need to maintain separate merchant accounts and direct integration capabilities, reducing their complexity while preserving processing efficiency.
Solution Approach 2:
The payment system acts as an intermediary that handles all the complex tasks of payment processing, eliminating the need for merchants to maintain their own direct payment infrastructure. This resolves the contradiction by transferring the complexity from merchants to the payment system while maintaining efficient processing through the intermediary's specialized infrastructure.
3Reliability
If customers are redirected to external payment systems, then authentication security is improved, but the customer experience is disrupted and unity of experience is broken
Solution Approach 1:
The patent uses data tokens as copies that contain all necessary authentication and transaction information. These tokens allow the payment system to verify customer identity and process transactions without requiring redirects. The customer remains on the merchant site throughout, experiencing continuous interaction while security is maintained through the encrypted token-based authentication.
Solution Approach 2:
The patent replaces the mechanical redirect mechanism with a token-based authentication system. Instead of physically redirecting the customer's browser to an external payment site and back, the system uses data tokens to transmit authentication information seamlessly, maintaining the appearance of continuous interaction while achieving secure verification.
4Reliability
If frequent redirects to payment systems are used, then authentication is verified, but bandwidth efficiency decreases and processor usage increases
Solution Approach 1:
The patent transmits data tokens instead of full authentication sequences during redirects. These tokens are compressed representations containing only the essential verification information, significantly reducing the amount of data transmitted over the network. This resolves the contradiction by maintaining authentication verification while minimizing bandwidth consumption through efficient token-based communication.
Data Source
AI summary
Some embodiments may provide a method comprising receiving an identification of an entity from a network-based commerce system and receiving authentication data associated with the entity from the network-based commerce system, a combination including the authentication data and the identification being operable to facilitate a transfer of value affecting a first account associated with the entity, the transfer of value further affecting a second account associated with the network-based commerce system, the authentication data and the identification of the entity being insufficient for the network-based commerce system to identify the first account.