Method and system for risk management in a transaction

• US 7,527,195 B2
• Filed: 04/11/2005
• Issued: 05/05/2009
• Est. Priority Date: 04/11/2005
• Status: Active Grant

• Current Assignee: PayPal, Inc. (PayPal Holdings, Inc.)
• Original Assignee: Bill Me Later Incorporated (PayPal Holdings, Inc.)
• Inventors: Talbert, Vincent W., Lavelle, Mark L., Keithley, Thomas H.
• Primary Examiner(s): LE, THIEN MINH
• Application Number:
  US11/102,941
• Publication Number:
  US 20060226216A1
• Time in Patent Office: 1,485 Days
• Field of Search: 235/380, 235/382, 235/382.5, 235/492, 235/493, 235/486, 235/383, 235/381, 235/375, 705/38, 705/39, 705/1, 705/26, 705/7, 705/4
• US Class Current: 235/380
• 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 40/03 Credit; Loans; Processing thereof

Abstract

Disclosed is a risk management system for providing risk data to an entity engaged in a transaction with a consumer. The system includes an authorization denial system having an authorization denial system interface for receiving a transaction data set having a plurality of data fields from the entity; and a denial rule set with multiple rules for outputting risk data directed to the transaction based upon the result of applying the rules to the data fields in the transaction data set. The authorization denial system interface transmits the resulting risk data to the entity. A method of authorizing a transaction between a consumer and an entity is also disclosed.

Claims

1. A risk management system for providing risk data to an entity engaged in a remote transaction with a consumer, the system comprising:

an authorization denial system including;

(i) an authorization denial system interface configured to receive a transaction data set having a plurality of data fields from the entity; and

(ii) a denial rule set having a plurality of rules and configured to output the risk data directed to the transaction based upon the result of applying at least one rule of the plurality of rules to at least one data field of the plurality of data fields in the transaction data set;

wherein the authorization denial system interface transmits the resulting risk data to the entity; and

a risk analysis system including;

(i) a risk analysis interface configured to receive the transaction data set from at least one of the authorization denial system and the entity; and

(ii) a risk analysis rule set having a plurality of rules and configured to output the risk data directed to the transaction based upon the result of applying at least one rule of the plurality of rules to at least one data field of the plurality of data fields in the transaction data set;

wherein the risk analysis system interface transmits the resulting risk data to at least one of the entity and the authorization denial system;

wherein the risk analysis system is further configured to;

(i) establish a new fraud rule; and

(ii) transmit the new fraud rule to the authorization denial system;

wherein the new fraud rule is added to the denial rule set for use in subsequent transaction analysis.

2. The system of claim 1, wherein the risk data transmitted to the entity is at least one of credit risk, fraud risk, profitability data, risk factors, authentication data, verification data, consumer rating data, transaction risk data, consumer risk data, denial data and processing data.

3. The system of claim 1, wherein the risk data transmitted to the entity is denial data advising the entity to at least one of deny the transaction, deny a purchase request, deny a credit request and take a specified action with respect to the consumer.

4. The system of claim 1, wherein the at least one of the data fields in the transaction data set is populated with data reflecting a consumer'"'"'s name, an account number, an address, a city, a state, a zip code, a country, a telephone number, an e-mail address, a social security number, a date of birth, the merchant'"'"'s name, an identification, an order number, an authorization number, an authorization time, an authorization amount, a ship-to address, a bill-to address, a transaction amount, a consumer purchase demographic, a transaction date, a transaction type, a product identification, a service identification, shipping costs, delivery type, customer type, a company identity, a merchant identity, a third-party risk score, risk data, authentication data, verification data, consumer rating data, profitability data, credit risk data, fraud risk data, transaction risk data, denial data, processing data, a general credit risk score, a credit bureau risk score, a prior approval, prior report data, previous transaction data, a geographical risk factor, credit account data, bankcard balance data, delinquency data, credit segment data, time between transactions data, previous transaction amount, previous transaction approval status, previous transaction time stamp data, a response code, active trades in database, public record data, trade line data, transaction medium, credit segment data, consumer payment type, consumer payment method, consumer payment history, consumer account history, consumer credit account balance, merchant history, private label entity data and affiliated private label entity.

5. The system of claim 1, wherein the at least one rule is applied to at least one of the data fields in the transaction data set, wherein the at least one data field is populated with demographic data.

6. The system of claim 5, wherein the demographic data is at least one of consumer'"'"'s name, an address, a ship-to address, a bill-to address, a social security number, an e-mail address, a telephone number, an Internet address and an account number.

7. The system of claim 1, wherein the risk data transmitted to the entity is a transaction denial instruction.

8. The system of claim 1, wherein the denial rule set is at least one of modifiable, dynamic and configurable.

9. The system of claim 1, wherein the denial rule set is in communication with an authorization denial system database populated with at least one of data and data fields, wherein the at least one of data and data fields is utilized in connection with the denial rule set and the application of the denial rule set.

10. The system of claim 1, wherein the risk data transmitted to the at least one of the entity and the authorization denial system is denial data advising the entity to at least one of deny the transaction, deny a purchase request, deny a credit request and take a specified action with respect to the consumer.

11. The system of claim 1, wherein the risk analysis rule set is in communication with a risk analysis system database populated with at least one of data and data fields, wherein the at least one of data and data fields is utilized in connection with the risk analysis rule set and the application of the risk analysis rule set.

12. The system of claim 1, wherein at least one of a rule from the risk analysis rule set, a new rule, an applied rule, transaction denial data, authentication denial data and authorization denial data is transmitted from the risk analysis system to the authorization denial system.

13. The system of claim 1, wherein the risk analysis rule set is at least one of modifiable, dynamic and configurable.

14. The system of claim 1, wherein the entity is at least one of a merchant, credit issuer, a company, a corporation, a seller and a service provider.

15. The system of claim 1, wherein the transaction is at least one of a credit account offer by a credit issuer, a credit account offer by a merchant, a credit account request by a consumer, a purchase request by a consumer, an item purchase transaction and a service purchase transaction.

16. A method of authorizing a remote transaction between a consumer and an entity, comprising:

receiving a transaction data set including a plurality of data fields;

applying a denial rule set having a plurality of rules to at least one of the data fields in the transaction data set, thereby providing risk data;

transmitting the risk data to the entity;

establishing a new rule based upon the transaction data set;

transmitting the new rule to the denial rule set; and

adding the new rule to the denial rule set for use in subsequent transaction analysis.

17. The method of claim 16, wherein the risk data transmitted to the entity is at least one of credit risk, fraud risk, profitability data, risk factors, authentication data, verification data, consumer rating data, transaction risk data, consumer risk data, denial data and processing data.

18. The method of claim 16, wherein the risk data transmitted to the entity is denial data advising the entity to at least one of deny the transaction, deny a purchase request, deny a credit request and take a specified action with respect to the consumer.

19. The method of claim 16, wherein the risk data transmitted to the entity is a transaction denial instruction.

20. The method of claim 16, further comprising modifying the denial rule set.

21. The method of claim 16, further comprising:

receiving the transaction data set;

applying a risk analysis rule set having a plurality of rules to at least one of the data fields in the transaction data set, thereby providing risk data; and

transmitting the risk data to at least one of the entity and an authorization denial system.

22. The method of claim 21, wherein the risk analysis rule set is in communication with a risk analysis system database populated with at least one of data and data fields, wherein the at least one of data and data fields is utilized in connection with the risk analysis rule set and the application of the risk analysis rule set.

23. The method of claim 21, wherein at least one of a rule from the risk analysis rule set, a new rule, an applied rule, transaction denial data and authorization denial data is transmitted to an authorization denial system including the denial rule set.

24. The method of claim 16, wherein the entity is at least one of a merchant, a credit issuer, a company, a corporation, a seller and a service provider.

25. The method of claim 16, wherein the transaction is at least one of a credit account offer by a credit issuer, a credit account offer by a merchant, a credit account request by a consumer, a purchase request by a consumer, an item purchase transaction and a service purchase transaction.

26. A system for authorizing a remote transaction between a consumer and an entity, comprising:

means for receiving a transaction data set including a plurality of data fields;

means for applying a denial rule set having a plurality of rules to at least one of the data fields in the transaction data set, thereby providing risk data;

means for transmitting the risk data to the entity;

means for establishing a new rule based upon the transaction data set;

means for transmitting the new rule to the denial rule set; and

means for adding the new rule to the denial rule set for use in subsequent transaction analysis.