Method and system for providing advanced authorization

• US 20050149455A1
• Filed: 06/07/2004
• Published: 07/07/2005
• Est. Priority Date: 07/01/2003
• Status: Active Grant

• Current Assignee: Visa USA, Inc. (Visa, Inc.)
• Original Assignee: Visa USA, Inc. (Visa, Inc.)
• Inventors: Bruesewitz, Belva J., Siegel, Kevin, Hilgers, Nancy, Faith, Patrick, Li, Xiaoli
• Granted Patent: US 7,809,650 B2
• Time in Patent Office: Days
• US Class Current: 705/64
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/382 insuring higher security of transaction
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• CPC Class Codes: G06Q 20/4016 involving fraud or risk level assessment in transaction processing
• CPC Class Codes: G06Q 20/403 Solvency checks
• CPC Class Codes: G06Q 20/409 Device specific authentication in transaction processing
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A system for providing real-time risk mitigation for an authorization system. The system receives authorization requests from multiple merchants (or their respective acquirers) and processes such requests. Each processed request is then forwarded to its corresponding issuer for further authorization. Each processed request includes an authorization message. The authorization message can include a risk score, a number of reason codes, and a number of condition codes. The use of the risk score, reason codes and condition codes allows issuers to make better informed decisions with respect to providing authorizations.

Claims

1. A system for processing authorization requests for transactions, comprising:

a client device configured to issue a plurality of authorization requests, each authorization request corresponding to a transaction; and

an in-flight model component configured to;

receive each authorization request and generate an authorization message,

forward the authorization message to a first party responsible for deciding the authorization request,

capture a decision made by the first party with respect to the authorization request, and

forward the decision to the client device for further action by a second party;

wherein the authorization message comprises a risk indicator;

wherein the authorization message is generated in real-time; and

wherein all or substantially all authorization requests issued by the client device are captured and processed by the in-flight model component in real-time.

2. The system of claim 1 wherein the authorization message further comprises one or more reason codes.

3. The system of claim 1 wherein the authorization message further comprises one or more condition codes.

4. The system of claim 1 further comprising:

an offline model component configured to;

receive the authorization request, transactional information relating to the transaction, and information relating to the decision made by the first party,

generate profiling information based on the authorization request, the transactional information, the information relating to the decision and additional information, and

forward at least a subset of the profiling information to the in-flight model component;

wherein the in-flight model component uses the profiling information forwarded by the offline model component to generate future authorization messages.

5. The system of claim 4 wherein the in-flight model component is further configured to use information relating to a plurality of most recent transactions to generate the future authorization messages;

wherein the information relating to the plurality of most recent transactions has not yet been processed by the offline model component.

6. The system of claim 4 wherein the profiling information includes account profiles and event profiles.

7. The system of claim 4 further comprising:

a linkage detection component configured to generate the additional information using transaction logs, financial risk information, and information relating to compromised data sets, the linkage detection component further configured to forward the additional information to the offline model component.

8. The system of claim 1 wherein the first party includes at least one of an issuer, a transaction processor, and an acquirer.

9. The system of claim 1 wherein the second party includes a merchant.

10. The system of claim 1 wherein the transaction includes at least one of a credit card transaction, a debit card transaction, loyalty program card transaction, and an ATM transaction.

11. The system of claim 1 wherein the client device includes at least one of a point-of-sale device, an ATM device, and a virtual terminal.

12. The system of claim 1 further comprising:

a financial transaction network switch, wherein the in-flight model component resides on the financial transaction network switch.

13. The system of claim 1 wherein the risk indicator represents an account level risk associated with the transaction;

wherein at least one of the one or more reasons represents a factor associated with the risk indicator; and

wherein at least one of the one or more condition codes represents a horizontal risk scheme, the horizontal risk scheme involving a plurality of accounts.

14. An authorization system comprising:

a plurality of client devices each configured to issue a plurality of authorization requests, each authorization request corresponding to a transaction; and

a financial transaction network switch having an in-flight model component, the in-flight model component configured to;

receive a plurality of authorization requests from the plurality of client devices and generate a plurality of authorization messages corresponding to the plurality of authorization requests,

forward the plurality of authorization messages respectively to a plurality of parties responsible for deciding the plurality of authorization requests,

capture a plurality of decisions made respectively by the plurality of parties with respect to the plurality of authorization requests, and

forward the plurality of decisions respectively to the plurality of client devices issuing the plurality of authorization requests;

wherein each authorization message includes a risk indicator;

wherein each authorization message is generated in real-time; and

wherein the in-flight model component is further configured to capture and process in real-time all or substantially all authorization requests issued by the plurality of client devices.

15. The system of claim 14 wherein each authorization message further includes one or more reason codes.

16. The system of claim 14 wherein each authorization message further includes one or more condition codes.

17. The system of claim 14 wherein the financial transaction network switch further includes:

an offline model component configured to;

receive the plurality of authorization requests, transactional information relating to the transactions, and information relating to the plurality of decisions made by the plurality of parties,

generate profiling information based on the plurality of authorization requests, the transactional information, the information relating to the plurality of decisions and additional information, and

forward at least a subset of the profiling information to the in-flight model component;

wherein the in-flight model component uses the profiling information forwarded by the offline model component to generate future authorization messages.

18. The system of claim 17 wherein the in-flight model component is further configured to use information relating to a plurality of most recent transactions to generate the future authorization messages;

wherein the information relating to the plurality of most recent transactions has not yet been processed by the offline model component.

19. The system of claim 17 wherein the profiling information includes account profiles and event profiles.

20. The system of claim 17 further comprising:

a linkage detection component configured to generate the additional information using transaction logs, financial risk information and information relating to compromised data sets, the linkage detection component further configured to forward the additional information to the offline model component.

21. The system of claim 14 wherein the plurality of parties include a plurality of issuers.

22. The system of claim 14 wherein the transactions include at least one of a credit card transaction, a debit card transaction, a loyalty program card transaction, and an ATM transaction.

23. The system of claim 14 wherein the plurality of client devices include at least one of a point-of-sale device, an ATM device and a virtual terminal.

24. The system of claim 14 wherein the risk indicator represents an account level risk associated with the corresponding transaction;

wherein at least one of the one or more reasons represents a factor associated with the risk indicator; and

wherein at least one of the one or more condition codes represents a horizontal risk scheme, the horizontal risk scheme involving a plurality of accounts.

25. A payment authorization system comprising:

control logic configured to receive an authorization request for a corresponding transaction from a client device;

control logic configured to generate an authorization message for the authorization request in real-time using a first set of profiling information, the authorization message comprising a risk score;

control logic configured to forward the authorization message to a party responsible for deciding the corresponding transaction; and

control logic configured to capture a decision made by the party with respect to the corresponding transaction and forward the decision to the client device.

26. The system of claim 25 further comprising:

control logic configured to capture and process the authorization request, the authorization message, information relating to the corresponding transaction and information relating to the decision to generate a second set of profiling information; and

control logic configured to update the first set of profiling information with at least a subset of the second set of profiling information.

27. The system of claim 25 wherein the second set of profiling information is generated offline.

28. The system of claim 25 wherein the authorization message further comprises one or more reason codes and one or more condition codes.

29. The system of claim 28 wherein the risk score represents an account level risk associated with the corresponding transaction;

wherein at least one of the one or more reasons represents a factor associated with the risk score; and

wherein at least one of the one or more condition codes represents a horizontal risk scheme, the horizontal risk scheme involving a plurality of accounts.

30. The system of claim 25 wherein the transaction includes at least one of a credit card transaction, a debit card transaction, a loyalty program card transaction, and an ATM transaction.

31. The system of claim 25 wherein the client device includes at least one of a point of sale device, an ATM device, and a virtual terminal.

32. The system of claim 25 wherein the party includes an issuer.

33. A computer implemented method for processing an authorization request for a transaction, the method comprising:

receiving the authorization request from a first party over a communication network;

generating an authorization message for the authorization request in real-time using a first set of profiling information, the authorization message having a risk score;

providing over the communication network the authorization message to a second party responsible for deciding the authorization request;

receiving an authorization response from the second party; and

providing the authorization response to the first party.

34. The method of claim 33 further comprising:

capturing and storing the authorization request, the authorization message, the authorization response and transactional information relating to the transaction;

generating a second set of profiling information using the stored authorization request, authorization message, authorization response and transactional information relating to the transaction, wherein the second set of profiling information is generated offline; and

updating the first set of profiling information with at least a subset of the second set of profiling information in a periodic manner.

35. The method of claim 34 wherein the first set of profiling information includes information relating to a plurality of most recent transactions;

and wherein the information relating to the plurality of most recent transactions is not included in the second set of profiling information.

36. The method of claim 33 wherein the risk score identifies an account level risk for the transaction.

37. The method of claim 33 wherein the authorization message further includes one or more reason codes and one or more condition codes;

wherein at least one of the one or more reason codes represents a factor associated with the risk score; and

wherein at least one of the one or more condition codes represents a horizontal risk scheme, the horizontal risk scheme involving a plurality of accounts.

38. The method of claim 33 wherein the transaction includes at least one of a credit card transaction, a debit card transaction and an ATM transaction.

39. The method of claim 33 wherein the first party includes at least one of a merchant and an acquirer;

and

wherein the second party includes an issuer.

40. A computer implemented method for processing authorization requests, the method comprising:

receiving a plurality of authorization requests corresponding to a plurality of transactions respectively from a first plurality of parties;

generating an authorization message for each of the plurality of authorization requests in real-time using a first set of profiling information, the authorization message having a risk score;

forwarding the plurality of authorization messages respectively to a second plurality of parties responsible for deciding the plurality of authorization requests;

receiving a plurality of authorization responses corresponding to the plurality of authorization requests respectively from the second plurality of parties; and

providing the plurality of authorization responses to the first plurality of parties.

41. The method of claim 40 further comprising:

capturing and storing information relating to the plurality of authorization requests, the plurality of authorization messages, the plurality of authorization responses and the plurality of transactions;

generating a second set of profiling information using the stored information, wherein the second set of profiling information is generated offline; and

updating the first set of profiling information with at least a subset of the second set of profiling information in a periodic manner.

42. The method of claim 41 wherein the second set of profiling information includes a testing data set.

43. The method of claim 41 wherein the first set of profiling information includes information relating to a plurality of most recent transactions;

and wherein the information relating to the plurality of most recent transactions is not included in the second set of profiling information.

44. The method of claim 40 wherein the risk score identifies an account level risk for the corresponding transaction.

45. The method of claim 40 wherein the authorization message further includes one or more reason codes and one or more condition codes;

wherein at least one of the one or more reason codes represents a factor associated with the risk score; and

wherein at least one of the one or more condition codes represents a horizontal risk scheme, the horizontal risk scheme involving a plurality of accounts.

46. The method of claim 40 wherein the plurality of transactions include at least one of a credit card transaction, a debit card transaction, a loyalty program card transaction, and an ATM transaction.

47. The method of claim 40 wherein the first plurality of parties include at least one of a merchant and an acquirer;

and

wherein the second plurality of parties include a plurality of issuers.