Location Based Authentication System

• US 20080222038A1
• Filed: 07/05/2006
• Published: 09/11/2008
• Est. Priority Date: 07/05/2005
• Status: Active Grant

• Current Assignee: mConfirm Ltd.
• Original Assignee: mConfirm Ltd.
• Inventors: Eden, Tomer, Avigad, Boaz
• Granted Patent: US 8,285,639 B2
• Time in Patent Office: Days
• US Class Current: 705/44
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/20 Point-of-sale [POS] network systems
• 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 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes

Abstract

An improved location based authentication (LBA) system for detecting fraudulent transactions committed by means of misuse of payment cards is disclosed. The improved LBA system performs a series of transaction analysis and generates a fraud-score which provides an indication as whether to authorize an attempted transaction. The system is designed to increase profitability of credit card companies by reducing the accumulated losses due to fraud. In one embodiment, the system detects fraud by analyzing the behavior patterns of card holders and merchants.

Claims

1. A computer-implemented method for determining a fraud score associated with a monetary transaction facilitated using a payment card in a store, the method comprising:

receiving data representative of an incoming payment transaction;

analyzing a location of a cellular telephone of an owner of said payment card and a location of the store for determining a location rating;

analyzing a location behavior profile (LBP) related to said payment card for determining a behavior rating;

computing a transaction rating using the location rating and the behavior rating in combination with a first weight factor;

analyzing historical payment transactions related to said payment card for determining a card rating; and

computing said fraud-score using said transaction rating and said card rating in combination with a second weight factor.

2. The method of claim 1, further comprising:

authorizing said incoming payment transaction if said fraud-score is within a trust range.

3. The method of claim 1, wherein the data representative of an incoming payment transaction includes:

details of said payment card, and said location of said store.

4. The method of claim 3, including determining a cellular telephone number associated with said payment card and determining the location of the cellular telephone identified by said cellular telephone number so as to infer a geographic location of the purchaser.

5. The method of claim 1, wherein said first weight factor zeros said location rating if said location of the cellular telephone is not available.

6. The method of claim 2, wherein said location rating indicates whether said cellular telephone is located in close proximity to said store.

7. The method of claim 2, wherein said behavioral rating indicates whether a behavior pattern of said owner of said payment card deviates from said LBP.

8. The method of claim 2, wherein said behavioral rating indicates whether a behavior pattern of said store deviates from said LBP.

9. The method of claim 1, wherein said LBP includes at least behavior patterns of at least payment cards'"'"' owners and stores in respect to geographical regions and time periods.

10. The method of claim 2, wherein said card rating indicates the number of previous suspected payment transactions recorded for said payment card.

11. A method for accurately and adaptively learning the locations of merchants for the purpose of performing location-based analysis of payment transactions, the method comprising:

identifying pairs of payment transactions occurred within a predefined time interval and submitted by different merchants;

for each pair of payment transactions,

computing a transaction velocity;

computing a merchant location score (MLS) for each merchant if said transaction velocity is lower than a maximum allowable velocity; and

saving the computed MLS of a merchant if its computed MLS is below a maximum value of MLS.

12. The method of claim 11, further comprising:

updating a location of a merchant according to a location of an anchor location if at least one of the following conditions is satisfied;

at least one of said merchants is said anchor location;

said computed MLS is above said maximum value of MLS; and

said transaction velocity is higher than said maximum allowable velocity.

13. The method of claim 12, wherein said anchor location is a verified and accurate location.

14. The method of claim 11, wherein said location and MLS of each merchant are saved in a lookup table.

15. The method of claim 11, further including using the learnt locations of said merchants to determine whether payment transactions should be authorized.

16. A method for accurately and adaptively learning in real-time the locations of merchants for the purpose of performing precise location-based analysis of payment transactions, said method comprising:

receiving a payment transaction submitted by a merchant;

obtaining the location of said merchant;

retrieving a plurality of location based services (LBS) locations of one or more mobile phones associated with a user that initiates said payment transaction;

for each of said plurality of LBS locations, increasing a merchant location score (MLS) of said merchant if said merchant location matches said at least one of said LBS locations; and

saving said each of said plurality LBS locations as a new location of said merchant if said one of said LBS locations matches the obtained merchant location.

17. The method of claim 16, further including using the learnt locations of said merchants to determine whether payment transactions should be authorized.

18. An authentication system for determining a fraud score associated with a monetary transaction facilitated using a payment card in a store, said authentication system comprising:

a transaction processor for processing data representative of an incoming payment transaction for determining said fraud-score based on at least the location of a cellular telephone of an owner of said payment card and a location of a store;

a database for storing incoming payment transactions and fraud scores computed for incoming payment transactions; and

a display unit for displaying data representative of processed incoming payment transactions.

19. The authentication system of claim 18, wherein said transaction processor authorizes said incoming payment transaction if said fraud-score is in a trust range.

20. The authentication system of claim 18, wherein said authentication system is connected to a transaction server through a communication network to receive said data representative of said incoming payment transaction.

21. The authentication system of claim 18, wherein said authentication system is further connected to a location based service (LBS) server to determine a geographic location of the cellular telephone associated the payment card.

22. The authentication system of claim 21, wherein said geographic location of the cellular telephone comprises at least one of:

a cell identification (ID) number of a cellular network and GPS coordinates.

23. The authentication system of claim 18, wherein the transaction processor is adapted to determine said fraud score by:

analyzing the geographic location of a cellular telephone of an owner of said payment card and a location of the store for determining a location rating;

analyzing a location behavior profile (LBP) related to said payment card for determining a behavior rating;

computing a transaction rating using the location rating and the behavior rating in combination with a first weight factor;

analyzing historical payment transactions related to said payment card for determining a card rating; and

computing the fraud-score using the transaction rating and the card rating in combination with a second weight factor.

24. The authentication system of claim 23, wherein the data representative of an incoming payment transaction includes:

details of said payment card, and said location of said store.

25. The authentication system of claim 23, wherein said location rating indicates whether said cellular telephone is located in close proximity to said store.

26. The authentication system of claim 23, wherein said first weight factor zeros said location rating if said location of the cellular telephone is not available.

27. The authentication system of claim 23, wherein said behavioral rating indicates whether a behavior pattern of said owner of said payment card deviates from said LBP.

28. The authentication system of claim 23, wherein said behavioral rating indicates whether a behavior pattern of said store deviates from said LBP.

29. The authentication system of claim 23, wherein said LBP includes at least behavior patterns of at least payment cards'"'"' owners and stores in respect to geographical regions and time periods.

30. The authentication system of claim 23, wherein said card rating indicates the number of previous suspected payment transactions recorded for said payment card.

31. The authentication system of claim 23, wherein said location of said store is retrieved from said database.

32. The authentication system of claim 23, wherein said transaction processor is adapted to learn the store'"'"'s location.

33-34. -34. (canceled)

35. A program storage device readable by machine, tangibly embodying a program of instructions executable by the machine to perform a method for determining a fraud score associated with a monetary transaction facilitated using a payment card in a store, the method comprising:

receiving data representative of an incoming payment transaction;

analyzing a location of a cellular telephone of an owner of said payment card and a location of the store for determining a location rating;

analyzing a location behavior profile (LBP) related to said payment card for determining a behavior rating;

computing a transaction rating using the location rating and the behavior rating in combination with a first weight factor;

analyzing historical payment transactions related to said payment card for determining a card rating; and

computing said fraud-score using said transaction rating and said card rating in combination with a second weight factor.

36. A program storage device readable by machine, tangibly embodying a program of instructions executable by the machine to perform a method for accurately and adaptively learning the locations of merchants for the purpose of performing location-based analysis of payment transactions, the method comprising:

identifying pairs of payment transactions occurred within a predefined time interval and submitted by different merchants;

for each pair of payment transactions, computing a transaction velocity;

computing a merchant location score (MLS) for each merchant if said transaction velocity is lower than a maximum allowable velocity; and

saving the computed MLS of a merchant if its computed MLS is below a maximum value of MLS.