Virtual Card Transaction System for Fraud Prevention

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Solution Overview

Problem

Current electronic payment systems lack efficient mechanisms for consumer-controlled fraud prevention and transaction management, particularly in online and mobile transactions, where users face challenges in setting restrictions on payment instruments to prevent unauthorized or excessive usage.

Innovation Solution

The MULTI-PURPOSE VIRTUAL CARD TRANSACTION system allows consumers to configure and manage transaction restrictions through a virtual wallet platform, enabling features like transaction time limits, maximum amounts, and merchant-specific controls, which can automatically detect and block suspicious transactions and require user approval for processing.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If consumers use traditional payment systems (cash, check, credit card, debit card), then payment transactions can be completed, but users lack effective control mechanisms to prevent fraudulent or excessive usage

Engineering Contradiction:

Improvetransaction securityVSAvoiduser control capability

Core Design Contradiction:

ReliabilityVSEase of operation

Solution Approach 1:

The patent segments the payment control functionality into multiple independent components: virtual card generation, transaction restriction settings (time-based, amount-based, merchant-specific), and real-time monitoring. Each component operates independently but integrates seamlessly, allowing users to configure granular controls without complicating the overall payment process

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The virtual card acts as an intermediary between the user's primary payment account and merchants. It introduces a controllable layer that enforces user-defined restrictions while maintaining the convenience of card-based payments, effectively mediating between security requirements and operational ease

Inventive Principle:

Principle #24Intermediary (Mediator)

2Reliability

If the system implements comprehensive fraud detection and transaction controls, then transaction security improves, but system complexity increases

Engineering Contradiction:

Improvefraud prevention capabilityVSAvoidsystem structure

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The system performs preliminary actions by pre-configuring transaction restrictions and generating virtual cards with embedded controls before actual transactions occur. Users set time limits, amount thresholds, and merchant restrictions in advance, eliminating the need for complex real-time decision-making during transactions

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The virtual card system is self-service oriented, automatically enforcing user-defined restrictions without requiring manual intervention during transactions. The system autonomously monitors and blocks transactions that violate predefined rules, reducing the need for complex external monitoring infrastructure

Inventive Principle:

Principle #25Self-service

3Reliability

If the system requires user approval for each transaction, then fraud prevention improves, but transaction processing time increases

Engineering Contradiction:

Improveauthorized transaction controlVSAvoidtransaction processing time

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The system applies partial approval requirements by only requiring user confirmation for transactions that violate predefined restrictions. Transactions within authorized parameters proceed automatically without additional approval steps, implementing approval only where necessary to prevent fraud

Inventive Principle:

Principle #16Partial or excessive action

Solution Approach 2:

The approval mechanism is dynamic rather than static. The system adapts its approval requirements based on transaction characteristics: routine transactions within limits proceed automatically, while anomalous transactions trigger approval requests. This dynamic behavior optimizes both security and processing speed

Inventive Principle:

Principle #15Dynamics

Data Source

PatentUS11727392B2Multi-purpose virtual card transaction apparatuses, methods and systems

Publication Date: 2023.08.15 VISA INTERNATIONAL SERVICE ASSOCIATION

AI summary

The MULTI-PURPOSE VIRTUAL CARD TRANSACTION APPARATUSES, METHODS AND SYSTEMS (“WIP”) transform wallet in proxy card generation requests and purchase inputs via WIP components into wallet in proxy card generation notifications and wallet in proxy card-based transaction purchase notifications. In one implementation, the WIP server may receive a transaction authentication request associated with a proxy payment identifier, and then determine that the proxy payment identifier is associated with an electronic wallet. The WIP sever may further obtain a payment identifier associated with the electronic wallet, and authenticate the transaction using the obtained payment identifier associated with the electronic wallet.