Multi-Channel Wallet Authentication via Preliminary Action
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Solution Overview
Problem
Current payment card transactions across multiple channels of commerce face high fraud risks due to inadequate identity verification, especially in remote transactions, leading to increased costs for merchants and potential liability shifts.
Innovation Solution
A mobile-phone centric electronic wallet system that uses a wallet server and synchronized mobile and computer interfaces to authenticate transactions through various methods, including offline PIN, MasterCard SecureCode, and online PIN, leveraging a central directory for authentication and processing, and enabling secure communication with merchants and acquirers to reduce fraud and liability.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If remote transactions are conducted without enhanced authentication, then transaction convenience is improved, but fraud risk increases
Solution Approach 1:
The system performs preliminary authentication actions before the transaction is finalized. The wallet application pre-establishes secure communication channels, pre-authenticates the user's identity through multiple factors (biometric, PIN, device verification), and pre-validates the transaction details. This preliminary authentication ensures that when the transaction occurs, the user's identity has already been verified, reducing fraud risk without impacting transaction convenience.
Solution Approach 2:
The patent introduces a wallet server and wallet application as intermediaries between the user and the payment network. The wallet application acts as a mediator that handles authentication, encrypts transaction data, and communicates securely with both the user's device and the payment network. This intermediary layer provides enhanced security through secure element integration and encrypted communication protocols while maintaining user convenience through automated authentication processes.
2Reliability
If multiple authentication methods are implemented, then transaction security is improved, but system complexity increases
Solution Approach 1:
The wallet application is designed as a universal platform that integrates multiple authentication methods (biometric authentication, PIN entry, device verification, secure element validation) within a single application. The system can adaptively select and combine different authentication factors based on the transaction type and risk level. This multi-functional approach provides comprehensive security while presenting a unified, simple interface to users, effectively managing system complexity through consolidation.
Solution Approach 2:
The authentication system dynamically adjusts the required authentication factors based on the transaction context. For low-risk transactions, simpler authentication may suffice, while high-risk transactions trigger enhanced multi-factor authentication. The system dynamically evaluates transaction characteristics (amount, merchant type, location, device status) and adapts the authentication requirements accordingly. This dynamic approach maintains high security standards while avoiding unnecessary complexity for routine transactions.
3Reliability
If enhanced authentication techniques are used, then fraud liability reduction is achieved, but transaction processing time increases
Solution Approach 1:
The system performs authentication actions in advance before the actual transaction occurs. User identity verification, device validation, and security credential verification are completed preliminarily through the wallet application before payment is initiated. This preliminary authentication ensures that when a transaction occurs, the verification process is already complete or can be quickly finalized, reducing fraud liability without significantly increasing transaction processing time for approved users.
Solution Approach 2:
The wallet application maintains continuous secure authentication sessions and cached verification data between transactions. Once a user is authenticated, the security context is maintained continuously for a period, allowing subsequent transactions to proceed with reduced re-verification. This continuity of authentication state enables the system to maintain high security standards while minimizing repeated authentication overhead, thereby reducing processing time for multiple transactions.
Data Source
AI summary
A phone-based electronic wallet providing authenticated transactions across multiple channels of commerce. The electronic wallet may be used for point-of-sale payments, remote mobile payments and/or web-based payments, and may use authentication tools such as offline PINs, SecureCode PINs and/or online PINs.