Transaction Processing System Risk Control via Prefunded Account
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Solution Overview
Problem
Existing transaction processing systems are unable to effectively monitor and control issuer transactions, leading to risks for transaction service providers due to the inability to track authorized transaction amounts, resulting in the need for significant collateral from issuer systems to process transactions over payment networks.
Innovation Solution
A computer-implemented method and system that controls a prefunded account by a transaction processing system, which processes electronic payment transactions by determining if the accumulated authorization amount satisfies a threshold based on the prefunded amount, allowing for automatic transaction authorization or decline, and enabling the transfer of funds from the prefunded account to merchant systems.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If existing transaction processing systems are used to process electronic payment transactions, then transaction processing capability is provided, but the transaction service provider is exposed to risk due to inability to monitor and control issuer transactions
Solution Approach 1:
The patent introduces a transaction processing system as an intermediary between the issuer system and the payment network. This intermediary monitors and controls issuer transactions by maintaining a prefunded account, tracking accumulated authorization amounts, and comparing them against thresholds. The system generates authorization request messages to the issuer system when thresholds are not met, thereby providing risk control without requiring the issuer system itself to be complex.
2Reliability
If the transaction processing system requires the issuer system to post significant collateral, then risk is reduced, but the complexity and burden on the issuer system increases
Solution Approach 1:
The patent implements a self-service mechanism where the transaction processing system automatically monitors its own prefunded account balance, tracks accumulated authorization amounts, and compares them against predetermined thresholds. When the threshold is not satisfied, the system automatically generates authorization request messages to the issuer system. This automated self-monitoring and self-control mechanism reduces risk while minimizing operational burden on the issuer system.
3Reliability
If the transaction processing system monitors and controls issuer transactions, then risk is reduced, but the system complexity increases
Solution Approach 1:
The patent employs preliminary action by requiring the issuer system to post a prefunded amount to the transaction processing system's prefunded account before transactions are processed. The transaction processing system预先 establishes predetermined thresholds based on this prefunded amount and automatically monitors accumulated authorization amounts against these thresholds. This preliminary funding and pre-established threshold mechanism simplifies the monitoring and control processes.
Data Source
AI summary
A method includes: controlling a prefunded account of an issuer system by a transaction processing system; receiving first transaction requests associated with first transactions initiated by first payment devices issued by the issuer system; for each first transaction: determining that the issuer system issued a corresponding first payment device; determining an accumulated authorization amount; determining that the accumulated authorization amount does not satisfy a threshold based on the prefunded amount; and generating and communicating an authorization request associated with the corresponding first transaction to the issuer system; receiving a second transaction request associated with a second transaction initiated by a second payment device issued by the issuer system; in response to receiving the second transaction request, determining that the issuer system issued the second payment device; determining an updated accumulated authorization amount; determining that the updated accumulated authorization amount satisfies the threshold; and automatically declining the second transaction.