US 20070198411 A1
A transaction processing system for the real time authorisation of payment transactions, The system comprises a verification system (4) connected to an issuer card management system (3). A cardholder can access the system via an interface (2) which can be for example the Internet, a wireless device, telephone, or a branch visit. The interface allows the cardholder to input rules governing how their credit card transactions are to be authorised. When the cardholder initiates a purchase transaction with their credit card, an authorisation request is passed from the card network to the verification system which executes the rules created by the cardholder in order to approve or deny the transaction.
1. A transaction processing system comprising an interface for receiving authorisation requests, an interface for transmitting authorisation outputs, and a processing means comprising means for determining from authorisation request data if the system output should be positive or negative, characterised in that the processing means comprises:
a setup means comprising means for storing transaction conditions associated with particular customers, and
authorisation means for dynamically retrieving a transaction condition associated with the customer of each authorisation request on a per-transaction basis and for applying said conditions to the authorisation request
wherein the setup means comprises an interface comprising means for allowing each customer to define said conditions;
wherein at least some of the conditions are in the form of program code rules;
wherein the setup means comprises means for maintaining a rule database;
wherein the authorisation means comprises means for automatically transmitting a notification to a customer under control of the conditions;
wherein the authorisation request interface comprises a network interface for interfacing with a card payment network;
wherein the authorisation request interface comprises a network interface for interfacing with an issuer front end system;
wherein the output interface further comprises a card management system interface for interfacing with an issuer card management system; and
wherein the setup means comprises means for controlling customer activation of a card.
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30. A transaction processing method carried by a verification system, and comprising the steps of (i) receiving a transaction condition associated with a customer; (ii) writing said condition to a condition database also storing conditions associated with other customers; (iii) receiving a transaction authorisation request from a transaction network; (iv) processing said received authorisation request by dynamically retrieving a condition associated with the customer of the authorisation request on a per transaction basis; (v) applying said condition and determining from the authorisation request data if the requested transaction should be approved or denied.
This is a Continuation of application Ser. No. 10/735,642, filed Dec. 16, 2003, which in turn is a PCT continuation of PCT/IE02/00093, filed Jun. 27, 2002 and published in English.
1. Field of the Invention
The invention relates to real time authorisation of transactions using non-cash payment instruments such as credit cards and debit cards.
2. Prior Art Discussion
While there has been much discussion in recent years concerning card-not-present (and particularly Internet shopping) fraud, in fact the bulk of credit card fraud arises from card-present transactions. For example, card “skimming” often results in a fraudulent card being produced and used, possibly in a different country from where the skimming occurred. Another example is mail interception, in which cards are stolen from the postal system as they are en route to the customer.
While the losses arising from fraud are very considerable, efforts to date at providing new systems to reduce fraud have met with only limited success. In one approach marketed by the company Orbiscom.™ a “disposable” card number is issued to which limited use conditions are applied. This approach appears to be of benefit for Internet transactions, however it is generally believed to be of little benefit for card present transactions.
In another approach, “neural intelligence” is used by the issuer to monitor proposed transactions and to block those which do not appear to fit a usage pattern for the cardholders. These systems monitor patterns of usage and on the basis of this monitoring, determine when usage is out of the ordinary. While this appears to be a very helpful approach, it suffers from practical problems. For example, a cardholder may find to his or her embarrassment and inconvenience that he or she can not use a card when on holiday in a foreign country. The overall impression the cardholder has is that he or she is not in control and does not understand how his or her transactions are controlled.
The invention is therefore directed towards providing a system and method for real time processing of transactions to reduce overall fraud. Another object is to help ensure that cardholders are more in control of how their cards are used and that they are informed of what is happening.
According to the invention, there is provided a transaction processing system comprising an interface for receiving authorisation requests, an interface for transmitting authorisation outputs, and a processing means comprising means for determining from authorisation request data if the system output should be positive for negative, characterised in that the processing means comprises:
In one embodiment the setup means comprises an interface comprising means for allowing each customer to define said conditions.
In one embodiment said interface comprises a Web server.
In another embodiment the setup means comprises means for storing predefined template conditions, and for allowing a customer to select predefined template conditions for his or her card.
In a further embodiment the setup means comprises a fraud manager interface comprising means for allowing a fraud manager with access control to define said template conditions.
In one embodiment the predefined template condition comprises specific placeholders for conditions, values and logical operators.
In one embodiment the setup means comprises input means for allowing a customer to input customer specified parameters to the predefined template conditions.
In another embodiment each template comprises an associated action which is the action to be taken if, upon evaluation, the template condition evaluates to “true”.
In a further embodiment at least some of the conditions are in the form of program code rules.
In one embodiment the setup means comprises means for maintaining a rule database.
In one embodiment the rule database comprises means for storing rules in a format which is indexed on a particular customer or customer card number.
In another embodiment said rules comprise system, product and customer rules.
In one embodiment said rules are stored in a format which does not require parsing of logical string-based expressions for processing.
In one embodiment the authorisation means comprises means for automatically transmitting a notification to a customer under control of the conditions.
In another embodiment the authorisation means comprises means for receiving confirmation of authorisation from a customer in response to a notification.
In a further embodiment the authorisation means comprises means for successively applying system-level, card product-level, and the customer conditions upon receipt of an authorisation request.
In another embodiment the authorisation request interface comprises a network interface for interfacing with a card payment network.
In one embodiment the authorisation request interface comprises a network interface for interfacing with an issuer front end system.
In one embodiment the output interface further comprises a card management system interface means for interfacing with an issuer card management system.
In one embodiment the network interface comprises means for communicating over TCP/IP, X.25, Serial, Modem, SNA or any other communication format.
In a further embodiment the network interface comprises for converting received messages into a general standard data format.
In another embodiment the network interface comprises a communication header module for converting received messages into a standardised data sequence of bytes.
In one embodiment the card management system interface comprises a protocol header module comprising means for converting a standardised sequence of bytes received from the network interface into an internal format for processing.
In another embodiment the card management system interface comprises a protocol header module comprising means for converting a standardised sequence of bytes received from a communications header module into an internal format for processing.
In a further embodiment the communication header and the protocol header modules comprise means for sequentially checking for, receiving, converting and routing messages and data.
In one embodiment the communication header and protocol header modules comprise means for routing transaction requests and responses between the card payment network and card management system.
In one embodiment the authorisation means comprises means for updating the rules database in real time.
In another embodiment the authorisation means comprises means for automatically transmitting a notification to a fraud manager if a possible fraud is detected.
In a further embodiment the setup means comprises means for automatically transmitting a notification to a customer if a possible fraud is detected.
In one embodiment the authorisation means comprises means for automatically transmitting a notification to a customer if an authorisation request is rejected.
In another embodiment the authorisation means comprises means for automatically transmitting a notification to a customer if a request is authorised, allowing a customer to maintain a local log of authorised requests.
In a further embodiment the setup means comprises means for controlling customer activation of a card.
In one embodiment said controlling means comprises an on-line banking interface.
In another embodiment said controlling means comprises an ATM interface.
In a further embodiment the authorisation means comprises means for receiving a cardholder request that a card be deactivated.
In one embodiment said means comprises means for receiving an SMS from a cardholder.
According to another aspect of the invention, there is provided A transaction processing method carried by a verification system, and comprising the steps of:
The invention will be more clearly understood from the following description of some embodiments thereof, given by way of example only with reference to the accompanying drawings in which:
FIGS. 2(a), 2(b) and 2(c) are block diagrams illustrating alternative arrangements for connecting the components of a verification system of the invention;
FIGS. 9 to 13 are diagrams illustrating interactions between a fraud manager and a rule database;
FIGS. 16 to 27 are diagrams showing interaction between people of various roles and systems of the invention; and
The rules are updated to the verification system in a step B, and are maintained in a rule database. They can be dynamically varied by the cardholder or by issuer personnel such as a fraud manager.
In a step C the cardholder initiates a purchase transaction with her card, the transaction being handled by a merchant system 5. In a step D the merchant system 5 forwards the transaction details to an acquiring system 6, which in step E forwards an authorisation request to a card network device 7. In a step F the verification system 4 executes the rules created by the cardholder in order to pass on or deny the transaction. If passed on, the issuing system 3 is updated in a step G, otherwise a deny signal is transmitted in a step H.
It will be appreciated that the systems and method allow the cardholder to be involved in the overall authorisation cycle so that usage control is tailored to his or her requirements.
This opens up other services in addition to effective fraud control. For example, a rule may require for an SMS notification to be forwarded to a parent every time a card is used. This allows parents to continually monitor and track usage for parental control and information purposes. In effect, suitable rules can cause a full audit trail to be generated in real time, when the information is required and is of most benefit.
We shall refer to the sequence of
This invention inserts into this chain a device whose function is to implement Cardholder authorisation rules. This device is located at an Issuer's premises or at a remote location and is connected to the Issuer's systems using secure communication means.
FIGS. 2(a), 2(b) and 2(c) show three alternative arrangements for integrating the verification system into an authorisation system. The main components are the verification system (also referred to as the rule processor) 4, the card management (Issuer) system (CMS) 3, and optionally a front end system (FES) 10.
The function of the rule processor 4 is to decide whether a particular request should be passed on to the issuer or declined based on the processing of system, product and cardholder rules. The rule processor makes this decision by evaluating rules on the authorisation request. These rules are read in from a rule database. Three types of rules can be entered into the rule database:
The CMS 3 is the terminal device in the authorisation chain. Authorisation request responses are generated by this device. The FES 10 interfaces with the card payment network and receives authorisation requests. The rule processor 4 further comprises an SMS/Email gateway 19 which allows email SMS, EMS, MMS or any other communication format messages to be sent to the cardholders or received from the cardholders.
Referring to FIGS. 2(a) the rule processor 4 is connected between the FES 10 and the CMS 3. The corresponding
The verification system (or rule processor) of the present invention is designed to integrate flexibly into existing card management (Issuer) systems. While it is possible to include additional functionality by adding more features to a particular ‘card management system’ because each card management system is different such an approach is problematic. The verification system is designed to be placed in the authorisation chain as a separate entity within that chain. However, in order to integrate the verification system into existing card management systems significant communications issues must be addressed.
FIGS. 4 to 6 illustrate the communication modules and routing processes of the invention. ISO8583 is used over many different types of communications media, depending on the equipment that is being used and the preferences of the institutions involved. These media include:
Messages that are sent between entities involved in the authorisation process are standardised according to the ISO8583 standard—“Bank card originated messages—Interchange message specifications—Content for financial transactions'. To facilitate connection and integration of the verification system of the invention into an existing authorisation chain a module which converts messages from any particular medium into a “stream of bytes” is used. This module is a CH (Communications Header).
After being processed by a ‘Test Rules’ process of the rule processor (described later) the message is converted from the ‘Normalised’ form back into a specific 8583 implementation via the PH layer, and then is sent to its destination via the CH layer.
If there are bytes available from the PH, they are read, and sent to the 8583 source, and then checks are made for bytes being available from 8583 source and PH as before.
If there are bytes available from the 8583 source, they are read, and sent to the PH, and then checks are made for bytes being available from the PH and the 8583 source as before. ISO8583 is a standard that describes the messaging that is used to allow organisations to exchange messages that relate to ‘Bank Cards’. This specification although complete in many ways is interpreted differently by different organisations. The differences relate for example to the specific meaning of a field, or the choice of field to hold a particular piece of data or how a particular response is to be interpreted. For the invention, the implication of this problem is that a message from one source may differ significantly from a message from another source, not because of any difference in the core transaction details, but because of differences between the organisations that are feeding the transactions into the verification system.
Because of this, a technique is presented for converting many known implementations of ISO8583 into a single generalised format. Examples of 8583 protocol implementations include:
If there are bytes available from the CH, they are read and converted into a message. At this stage, the message is in the format of a vendor specific implementation of ISO8583. This message is then converted into a normalised form using transformations that are specific to this specific PH. These transformations are very much related to each vendor's implementation and thus can be arbitrarily complicated. For example, a particular field may be broken down in a particular manner by a vendor implementation.
After the normalised message is generated, it is sent to the application process. The PH then goes back to checking for bytes from the CH.
If a message is available from an application, it is read and converted to de-normalised form using PH transformations. It is then converted into a sequence of bytes and passed to the CH. The PH then goes back to checking for bytes from the CH.
The three possible outcomes of application of the sequence of three sets of rules are:
The third outcome causes an item to be added to a fraud queue. In this embodiment, a decline outcome may cause a message to be sent to the Cardholder (steps 116, 117, 118).
Process Messages According to Defined Rules
The Cardholder can communicate through the Issuer's computer system. The Cardholder communicates with the Issuer's computer system through whatever means the Issuer's computer system supports—e.g. Internet, phone, WAP. By doing this, the Cardholder can enter a set of rules. A rule may be in the form of
Each action is one of three choices—either ‘decline’ or ‘accept’ or ‘advise Fraud Manager or advise Cardholder in the event of an automatic confirmation system being implemented’. The term ‘decline’ means to not send the request onwards to the CMS, but to send an authorisation rejection back towards the Acquirer. The term ‘accept’ means to send the authorisation request on towards the Issuer. The term ‘advise Fraud Manager’ means to send a message to a Fraud Manager about the authorisation.
In addition to cardholder rules, the Fraud Manager in the issuing institution can also enter rules. These rules can be entered at three levels. The first of these is the set of rules that are run for every transaction that passes through the system—these are termed ‘system’ rules. The second of these is the set of rules that are run for each ‘product’ that the issuing institution markets. A product in this sense is a set of credit card number ranges that are grouped together. The third of these is the set of ‘template rules’ for a particular product. These are pre-written rules that a Cardholder who has a card from particular product can ‘opt into’ without having to write the rule themselves.
The invention allows complex rules to be built and enables them to be executed in a very time-efficient manner by using template rules.
Each template is built in response to Fraud Manager inputs by the Fraud Manager and is given an index number (#1, #2, . . . ). Each template comprises a set of empty placeholders for up to ten conditions. Each condition comprises the following:
Also associated with each template is an ‘Action’. This is the action to take if the condition evaluates to ‘True’. Each action is composed of the following elements:
Each template also includes ‘Notification’ fields. These fields indicate whether an Email or SMS notification should be sent if the condition above evaluates to ‘True’.
Each cardholder rule comprises a reference to a template and any information required by that template. Accordingly, the fields involved are:
All of the cardholder rules in the system are stored in the system database and are indexed and clustered on card number.
Real Time—not Batch
The invention allows Cardholders and Fraud Managers to view and modify rules while, at the same time, processing authorisation transactions using these rules. Updates to the rules can be made in real time with the effect of such a change being immediate.
In order to allow this to occur, ‘database transactions’ are defined for the purposes of reading and updating the table in which rules are stored. The purpose of these transactions is to allow updates to rules to occur in the moments between one authorisation transaction and the next.
The processing efficiency of the system is based upon the time taken to read all rules related to a particular card out of the database and the time taken to computationally apply the rules to the transaction in hand.
By having cardholder rules refer to templates rather than exist in a stand-alone manner makes each cardholder rule very small (<100 bytes). This means that a minimal amount of disk space will be used per rule, and so more rules can be read per database read.
By clustering the cardholder rules within the database on Card Number, all rules related to a particular Cardholder can be read in one disk read by the database.
By allowing templates to have specific placeholders for conditions, values and logical operators there is no requirement for the normal parsing of logical string-based expressions. Processing can proceed without the need for intensive string parsing.
FIGS. 9 to 25 illustrate how Issuer Personnel and Cardholders interact with the rule processor.
Users of the system are as follows:
The Fraud Manager is that person in the Issuing Institution whose function is to track and minimise the incidence of fraud in the institution. This person and the Cardholder are the prime users of the system 4. The Fraud Manager configures the system 4 according to the needs of the Issuer. FIGS. 9 to 15 illustrate some interactions of the Fraud Manager with the system.
Fraud Manager Adds or Modifies Products (
The Fraud Manager must define those products that the Issuer uses. A product is a set of credit cards that a Fraud Manager wishes to view as a single entity for the purpose of applying rules to them. These may in fact be individual products that the Issuer offers its customers (e.g. Standard Card, Gold Card, Platinum Card,) or they may be collections or subsets of same.
Fraud Manager Adds or Modifies BIN (
Each Issuer has a set of allocated credit card number prefixes (Bank Identifier Numbers or ‘BIN's). In the natural course of events, it divides these up between the products that it creates. For instance, it might create a student credit card product, a normal credit card product and a gold credit card product. These products, and their associated BIN's are entered into the system as part of the product definitions.
Fraud Manager Modifies System or Product or Template Rules (
The Fraud Manager can add rules to the system 4 of types ‘System’, ‘Product’ or ‘Template’. Rules lie at the core of the system 4 and are in three types. Each rule type is applied in the following order to each authorisation request message:
The order of execution within each set of rules (system, product and cardholder) can be modified by the Fraud Manager as required.
Fraud Manager Views Cardholder Rules (
The Fraud Manager can view but not modify Cardholder rules. A “PAN”, is the industry term for a credit card number (“Primary Account Number”).
Fraud Manager Reviews Fraud Queue and Acknowledges an Item (
A fraud queue is a queue of issues that Fraud Managers go through on a regular basis. These issues are those items that have matched rules whose action was ‘Advise Fraud Manager’ or ‘Decline’. Each item on the fraud queue has to be acknowledged by a Fraud Manager. Several different Fraud Managers can be looking at the fraud queue and acknowledging items at the same time.
Fraud Manager Requests Report (
The Fraud Manager can get various reports from the system 4. These can relate to fraud queue, activated rules, tracked rules, active rules, and suspended rules.
Fraud Manager Sets up System Options (
There are various system settings that the Fraud Manager needs to set up. These settings are global, i.e. in that they apply to all products.
Alternatively, the Cardholder can define a Rule from scratch in the same way that the Fraud Manager defines one.
Cardholder Requests List of Templates Available for Credit Card number, and Adds One (
The invention provides the interface to the Issuer's online banking system. This interface is web-based, although it is not expected that the web interface is delivered directly to the Cardholder. Rather, it is expected that the web-based interface is driven by the Issuer's computer systems. Here a list of template rules is provided, from which the Cardholder can add one or more for their particular credit card.
Cardholder Requests List of Current Rules for Cardholder and can Delete One (
The Cardholder generates a new rule rather than choosing from a list of pre-defined template rules and applies this rule to the credit card.
As shown in
Functional Requirement—Allow Auditor to Verify Integrity of System
The Issuer's auditors—internal and external—must be able to see how and why the software functions in the way that it does. The overall functionality of the system is to allow Issuers and Cardholders to selectively decline transactions, so the reason for a transaction either being declined or not has to be clear to an Auditor.
Auditor Views Transaction Log (
The Auditor can look into the transaction log to see the detail of the processing of the system.
Auditor Examines One Particular Set of Rules in Detail (
The Auditor can enable rule tracking, which enables the Auditor to track all of the decisions relating to a particular rule. When rule tracking is switched on the Auditor will see each condition being tested and the result of the test.
Functional Requirement—Allow Technical Team to Control and Configure System
The Technical Operator has the job of configuring the system for use, and maintaining it thereafter. Most of this configuration resides in the database. However, it would be inefficient for the processing nodes to have to read their own configuration from the database. Instead their configuration is loaded into a local database on each processing node. This means that there is a requirement for parts of the database to be loaded into the local database on each processing node by the Technical Operator.
Technical Operator Modifies Database through Web Browser (
The Technical Operator can modify all tables in the database through a web browser.
Technical Operator Starts/Stops Processing Nodes (
The Technical Operator uses an application to allow the starting and stopping of each processing node 15.
Technical Operator Sends New Configuration to the Processing Nodes (
The technical operator must instruct the processing nodes to begin using the new registry that they have been sent, This is achieved with this use case.
Technical Operator Triggers the Processing Nodes to Begin Using a New Configuration (
The technical operator must instruct the processing nodes to begin using the new registry that they have been sent, This is achieved with this use case.
O&M Node Checks Status of Processing Nodes (
The O&M Node sends a status request message once every 10 seconds to each O&M node. The O&M node replies with a response, and on the basis of this, the O&M Node database entry is updated.
Functional Requirement—Perform All System Maintenance Functions Automatically
At the end of each period (such as a day), the system 4 must run several procedures automatically.
Database is Backed up (
The database is backed up to tape on a nightly basis.
Database is Restored (
The data on tape can be restored into the database.
The system 4 generates a large number of messages and logged items. These objects are taken out of the database after they have been there for a period of time in order to prevent the database from growing too large. Over time, the expired rules (rules that are past the end of their stop date) must be archived. Management information (MIS) reports are run from a different database server. Entities relevant to MIS reports are copied into a separate database.
Fraud Alarm/Rejection Alarm/Authorisation Confirmation
This invention allows notifications (SMS/email) that are sent to cardholders to serve different functions:
The invention can be configured to see all approvals and to send a message to the cardholder informing them of the approval.
Much credit card fraud exists in the form of “Mail Fraud”. This fraud occurs when a fraudster intercepts a latter containing a credit card, which is on the way to a cardholder.
In order to eliminate this form of fraud, the system 4 can establish rules denying the use of each recently issued credit card until an activation event occurs. This activation event can have a number of forms:
The invention allows rules to be accessed by Cardholders through an online banking platform. The online banking platform is responsible for construction of credit card management web page. The online banking platform calls the verification system in order construct the required web page.
The verification system of the invention provides four services to the online banking platform to aid it in constructing the card management web page:
In another application, as shown in
These products are designed for Cardholders who may wish to have more active participation in how a card is used, for example, an ancillary card issued by a parent to a child where the parent wishes to control how, where and when the card is used by the child.
The card product design of this particular customer segment would be driven by specific customer needs for credit control and security. An example of this would be a corporate Card Manager as detailed in
Transaction rules form an important part of the operation of card management systems by card issuers. These are rules that are usually applied at either a system level i.e. a rule that will apply to all cards issued by that institution or at a product level i.e. a rule that will apply to a particular card product such as a Gold Card. An example of a rule might be to deny or refer all transactions from a country that is deemed to be a particular hotspot for card fraud.
It will be appreciated that the invention allows the cardholder to control what happens in the authorisation process via the establishment of a rule set that will apply to all cardholder's transaction. The cardholder can remotely create, delete or amend rules e.g. through online banking channels. In addition the invention at the Issuers discretion allows for the cardholder to be alerted in real-time of a rule infringement thus alerting him to potential misuse of their payment card and allows them to respond automatically to this alert in real-time to confirm their authenticity thus allowing the transaction to proceed.
It is expected that the invention will reduce and displace the incidence of fraud in payment card networks. It effectively helps manage the risk of card fraud. The system can be used as a complementary technology and as such the card Issuers can implement it as another line of defence in the fight against fraud.
The invention is not limited to the embodiments described but may be varied in construction and detail.