Transaction Authorization Application for Card Present Fraud Detection
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Solution Overview
Problem
Card not present transactions are vulnerable to fraud, leading to false positive fraud detection decisions that result in unjustified payment declines and card blocking, causing inconvenience to users.
Innovation Solution
A computer-implemented method for authorizing card present transactions on a transaction terminal, which includes initiating a transaction authorization application, presenting selection parameters, prompting user authentication, and transmitting a transaction authorization confirmation to the card network, allowing users to override fraud detection decisions and ensure authorized transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If fraud detection algorithms are applied to card not present transactions, then security against fraud is improved, but false positive decisions occur causing unjustified payment declines and card blocking
Solution Approach 1:
The patent introduces an intermediary authentication system that mediates between the fraud detection algorithm and the transaction decision. When fraud detection flags a transaction, the system intervenes with additional authentication steps (such as requesting user confirmation via mobile device or alternative verification methods) rather than immediately declining the transaction. This intermediary layer resolves the contradiction by maintaining security through verification while preventing false positives from causing unjustified declines.
2Reliability
If fraud detection algorithms are applied to card not present transactions, then security against fraud is improved, but transaction processing time increases due to additional verification steps
Solution Approach 1:
The patent implements preliminary authentication actions before transactions are flagged by fraud detection algorithms. Users pre-register authentication methods (such as mobile device bindings, biometric data, or preferred verification channels) during account setup. When a transaction occurs, the system can quickly invoke these pre-configured authentication mechanisms rather than implementing complex verification procedures in real-time, thus maintaining high security while minimizing processing time delays.
3Reliability
If card blocking is implemented upon fraud detection, then security is improved, but legitimate transactions are delayed requiring user contact with card issuer
Solution Approach 1:
The patent enables self-service authentication mechanisms that allow users to verify and authorize transactions independently without contacting the card issuer. The system provides users with direct control through mobile applications or online portals where they can review flagged transactions, provide additional verification, and authorize legitimate transactions themselves. This self-service approach maintains security by keeping transactions under verification while eliminating the productivity loss associated with requiring user contact with the issuer for unblocking.
Data Source
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AI summary
A method for authorising card present transactions on a transaction terminal comprising initiating, on a user terminal, a transaction authorisation application, presenting, by the transaction authorisation application, at least one selection parameter for identifying at least one card present transaction to be authorised, prompting, responsive to identifying the at least one card present transaction to be authorised, authentication of a user for authorisation of the card present transaction, transmitting, responsive to authorisation of the at least one card present transaction by the user, a transaction authorisation confirmation according to the at least one selection parameter to a card network, and processing, responsive to receiving the transaction authorisation confirmation at the card network, the at least one card present transaction at the transaction terminal.