Virtual Card Number Deactivation by Billing Cycle
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Solution Overview
Problem
Consumers face risks of identity theft and cyber fraud when providing electronic payment information for online recurring services, as existing security measures are not foolproof against data breaches and hacking.
Innovation Solution
A financial institution offers consumers the ability to generate virtual card numbers (VCNs) for recurring payments, which are configured to deactivate based on a determined active duration time and billing cycle, thereby blocking future charges.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If consumers provide electronic payment information for online recurring services, then payments can be processed automatically, but consumers become vulnerable to identity theft and cyber fraud
Solution Approach 1:
The patent divides the payment method into multiple components: a primary payment method and multiple virtual card numbers (VCNs). Each VCN is segmented to be used for specific billing cycles or time periods, so that if one VCN is compromised, only that specific period's payments are at risk, not the entire payment history or future payments. This segmentation limits the scope of potential fraud.
Solution Approach 2:
The system creates virtual copies of payment card numbers (VCNs) that can be provided to merchants instead of the consumer's actual payment card information. These VCNs are generated dynamically and can be configured with specific expiration dates or billing cycle limitations. The VCNs function as valid payment methods but are isolated from the consumer's primary payment information, protecting it from exposure to merchants and potential hackers.
2Object-affected harmful factors
If consumers use virtual card numbers with expiration dates, then security is improved by limiting exposure time, but consumers must manually manage and reactivate cards for ongoing services
Solution Approach 1:
The system automatically manages the VCN lifecycle without requiring consumer intervention. When a VCN approaches its expiration date or the associated billing cycle ends, the system automatically deactivates it and can generate a new VCN if needed. The system monitors billing cycles and service status to determine when VCNs should be active or inactive, eliminating the need for consumers to manually track and reactivate cards.
Solution Approach 2:
The system provides feedback to consumers about VCN status through notifications. Consumers are alerted when a VCN is about to expire, has expired, or when charges are attempted on inactive VCNs. This feedback mechanism keeps consumers informed without requiring them to actively monitor, reducing the operational burden while maintaining security.
3Object-affected harmful factors
If financial institutions implement automatic VCN deactivation based on billing cycles, then fraud prevention is improved, but system complexity increases
Solution Approach 1:
The system performs preliminary actions by pre-configuring VCNs with expiration dates tied to specific billing cycles before they are issued. The financial institution analyzes the billing cycle information provided by merchants and automatically sets the appropriate VCN expiration dates in advance. This preliminary configuration eliminates the need for complex real-time analysis during fraud detection, as the temporal validity is already established.
Solution Approach 2:
The system changes the parameter of VCN validity from static (permanent or fixed-term) to dynamic (billing-cycle-based). By linking VCN expiration to billing cycle parameters, the system automatically adjusts the active duration of payment methods based on service subscription terms. This parameter change enables automatic deactivation without requiring complex manual intervention or real-time decision-making.
Data Source
AI summary
Aspects provided may allow for an entity to deactivate a virtual card number (VCN). In particular, aspects provide for deactivating VCNs based on a frequency or periodicity of an interaction. After deactivation, the entity may block future charges to the VCN. Further aspects provide for using incoming charge data sent to one or more previous users to train a machine learning model to determine the frequency or periodicity of the interaction. Additional aspects may also provide for including trial length when determining the deactivation date, providing VCN configuration options to a user, and notifying the user based on upcoming and current VCN status changes.