Digital Wallet Device Fraud Detection via Centralized Tracking
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Solution Overview
Problem
The increasing sophistication of fraudulent activities in digital wallet systems poses a significant challenge for payment entities and consumers, as existing technologies lack effective mechanisms to identify and manage malicious devices across the digital wallet ecosystem, allowing fraudsters to evade detection by simply switching accounts or providers.
Innovation Solution
A method and system that communicate with user devices associated with digital wallet applications, determine unique device identifiers, receive risk data from fraudulent activity databases, and generate device scores to identify and flag malicious devices, which are then added to a centralized database to prevent further fraudulent activities.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If account-based fraud prevention is used, then individual fraudulent accounts can be banned, but fraudulent devices can still be used to create new accounts and perpetuate fraud across different providers
Solution Approach 1:
The patent segments the fraud detection approach from account-level to device-level by introducing unique device identifiers (UDID) as the primary tracking mechanism. This allows the system to identify and ban fraudulent devices independently of account changes, resolving the contradiction by maintaining reliability through device tracking while preventing adaptability for fraudsters who create new accounts on banned devices
Solution Approach 2:
The patent creates a universal device identification system that works across multiple payment providers and digital wallet ecosystems. By establishing a centralized database of malicious device identifiers that can be queried by any provider, the system achieves cross-provider fraud prevention, eliminating the ability of fraudsters to evade detection by switching providers
2Ease of operation
If digital wallet systems allow flexible account creation, then consumer convenience is improved, but malicious actors can easily create fraudulent accounts using stolen information
Solution Approach 1:
The patent implements preliminary fraud detection by checking device identifiers against the centralized malicious device database before allowing account creation or transaction processing. This preliminary action prevents fraudulent accounts from being created in the first place, maintaining ease of operation for legitimate users while blocking fraudsters before they can exploit the system
Solution Approach 2:
The patent introduces an intermediary fraud detection layer between the user device and the digital wallet system. The malicious device identification engine acts as a mediator that verifies device legitimacy through the centralized database, allowing convenient account creation for legitimate users while intercepting and blocking fraudulent attempts without affecting user experience
3Reliability
If payment entities independently manage fraud, then individual provider security is maintained, but coordinated fraud prevention across the ecosystem is lacking
Solution Approach 1:
The patent merges independent fraud management systems into a unified ecosystem-wide approach by creating a centralized database of malicious device identifiers that all payment providers can access. This combines individual provider security measures into a coordinated system, maintaining each provider's security standards while adding ecosystem-wide adaptability through shared intelligence
Data Source
AI summary
Systems and methods for identifying malicious digital wallet devices are provided. Exemplary embodiments may establish communication with a user device associated with a digital wallet application and determine a unique device identifier for the device. Risk data may then be obtained from one or more fraudulent activity databases and associated with the device identifier. The user device may then be identified as a malicious or non-malicious device based on a device score generated based on the risk data. Devices identified as malicious may then have their unique device identifier stored on a malicious device database.