System and method for authorizing electronic payment transactions

• US 7,574,402 B2
• Filed: 10/06/2006
• Issued: 08/11/2009
• Est. Priority Date: 10/12/2005
• Status: Active Grant

• Current Assignee: First Data Corporation (Fiserv Incorporated)
• Original Assignee: First Data Corporation (Fiserv Incorporated)
• Inventors: Albrecht, Norbert, Kubo, Takayuki
• Primary Examiner(s): Diaz; Susanna M
• Assistant Examiner(s): LOFTUS, ANN E
• Application Number:
  US11/539,529
• Publication Number:
  US 20070246528A1
• Time in Patent Office: 1,040 Days
• Field of Search: 705/44, 705/38, 705/39, 706/925
• US Class Current: 705/38
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking 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 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: Y10S 706/925 Business

Abstract

A transaction authorization system comprises an authorization engine (22) configured to perform an analysis in relation to a received request for authorization of an electronic payment transaction and determine an authorization output based on the analysis, wherein the analysis includes application of one or more checking rules of the if-then clause type comparing one or more transaction-related attributes to one or more predefined attribute threshold values. The system further includes a database system (24) storing transaction records for a plurality of past electronic payment transactions, an evaluation engine (28) configured to access the database system (24) and evaluate a first set of stored transaction records to determine one or more characteristic values related to the first set, and a setting engine (26) configured to access the database system (24) and select a second set of stored transaction records in accordance with at least one of the one or more characteristic values, wherein the setting engine (26) is further configured to evaluate the selected second set of transaction records and set at least one attribute threshold value in at least one checking rule based on the evaluation of the second set of transaction records.

Claims

1. A transaction authorization system, comprising:

a computer database system storing transaction records for a plurality of past electronic payment transactions, wherein each transaction record in the database system includes a payor account identifier;

A computer programmed to;

perform an analysis in relation to a received request for authorization of an electronic payment transaction and determine an authorization output based on the analysis, the computer configured to receive one or more transaction-related attributes associated with the electronic payment transaction, the analysis including application of one or more checking rules of the if-then clause type comparing one or more of the transaction-related attributes to one or more predefined attribute threshold values; and

programmed to access the database system and evaluate a first set of stored transaction records to determine one or more characteristic values related to the first set;

wherein the characteristic values include one or more correlation values indicative of a transaction outcome correlation function, the correlation value determined from the first set of transaction records as follows;

a. determining a length of time between a first transaction and a second transaction in the first set of transaction records, wherein the first transaction at a first time had a negative outcome and the second transaction at a second time had a positive outcome, wherein the first transaction and the second transaction are for the same payor account,

b. repeating the determination of a length of time for at least a third transaction and a fourth transaction to create a distribution of the lengths of time;

c. determining one or more transaction outcome correlation functions based on the distribution of the lengths of time, wherein the transaction outcome correlation function provides a conditional probability for predicting the outcome of a transaction according to one or more of the transaction-related attributes;

d. determining a characteristic magnitude associated with the value of the conditional probability for a successful outcome; and

e. setting the characteristic magnitude of the one or more transaction outcome correlation functions as a respective correlation value;

and

programmed to access the database system and select a second set of stored transaction records to span a time period satisfying a predetermined condition in relation to a temporal correlation length represented by at least one of the one or more correlation values, and

programmed to evaluate the selected second set of transaction records and set at least one of the attribute threshold values in at least one of the checking rules based on the evaluation of the second set of transaction records.

2. The transaction authorization system of claim 1, wherein the computer is configured to select the second set of transaction records to span a time period at least equal to the temporal correlation length represented by at least one of the one or more correlation values.

3. The transaction authorization system of claim 1, wherein the computer is configured to re-select a plurality of first sets of transaction records and determine one or more characteristic values in relation to each selected first set, and wherein the computer is configured to select the second set of transaction records in accordance with one or more characteristic values determined in relation to a selected one of the first sets of transaction records.

4. The transaction authorization system of claim 3, wherein the computer is configured to re-select the plurality of first sets of transaction records at predetermined time intervals or whenever a predetermined number of transaction records have been newly recorded in the database system and re-determine the one or more characteristic values in relation to each re-selected set.

5. The transaction authorization system of claim 3, wherein the computer is configured to select the first sets of transaction records based on payee-related information in the transaction records.

6. The transaction authorization system of claim 1, wherein the computer is configured to perform the analysis in relation to a received request for authorization of a first-type payment transaction, wherein the transaction records stored in the database system include transaction records for second-type payment transactions, and wherein the computer is configured to include transaction records for second-type payment transactions in the first set wherein the computer is configured to include transaction records for second-type payment transactions in the second set.

7. The transaction authorization system of claim 6, wherein the transaction records for second-type payment transactions each include a transaction request answer code generated by a remotely located further transaction authorization system, and wherein the computer is configured to evaluate the first set by referring to the transaction request answer code in the transaction records for second-type payment transactions included in the first set or wherein the computer is configured to evaluate the selected second set by referring to the transaction request answer code in the transaction records for second-type payment transactions included in the selected second set.

8. The transaction authorization system of claim 1,

wherein the computer is configured to determine at least one attribute threshold value, the attribute threshold value equal to a conditional probability of a positive outcome for a transaction based on the value of a transaction-related parameter, wherein the transaction-related parameter is related to the transaction-related attribute.

9. A transaction authorization method, comprising the following steps, each executed by a computer:

receiving a request for authorization of an electronic payment transaction, wherein the request includes one or more transaction-related attributes associated with the electronic payment transaction;

performing an analysis in relation to the received authorization request and determining an authorization output based on the analysis, the analysis including application of one or more checking rules of the if-then clause type comparing one or more of the transaction-related attributes to one or more predefined attribute threshold values;

accessing a database system storing transaction records for a plurality of past electronic payment transactions wherein each transaction record in the database system includes a payor account identifier;

evaluating a first set of stored transaction records to determine one or more characteristic values related to the first set wherein the characteristic values include one or more correlation values indicative of a transaction outcome correlation function, the correlation value determined from the first set of transaction records as follows;

a. determining a length of time between a first transaction and a second transaction in the first set of transaction records, wherein the first transaction at a first time had a negative outcome and the second transaction at a second time had a positive outcome, wherein the first transaction and the second transaction are for the same payor account;

b. repeating the determination of a length of time for at least a third transaction and a fourth transaction to create a distribution of the lengths of time;

c. determining one or more transaction outcome correlation functions based on the distribution of the lengths of time, wherein the transaction outcome correlation function provides a conditional probability for predicting the outcome of a transaction according to one or more of the transaction-related attributes;

d. determining a characteristic magnitude associated with the value of the conditional probability for a successful outcome; and

e. setting the characteristic magnitude of the one or more transaction outcome correlation functions as a respective correlation value;

selecting the second set of transaction records to span a time period satisfying a predetermined condition in relation to a temporal correlation length represented by at least one of the one or more correlation values;

evaluating the selected second set of transaction records; and

setting at least one of the attribute threshold values in at least one of the checking rules based on the evaluation of the second set of transaction records.

10. The transaction authorization method of claim 9, further comprising:

selecting the second set of transaction records to span a time period at least equal to the temporal correlation length represented by at least one of the one or more correlation values.

11. The transaction authorization method of claim 9, further comprising:

selecting a plurality of first sets of transaction records; and

determining one or more characteristic values in relation to each selected first set, selecting the second set of transaction records in accordance with one or more characteristic values determined in relation to a selected one of the first sets of transaction records.

12. The transaction authorization method of claim 11, further comprising:

re-selecting the plurality of first sets of transaction records at predetermined time intervals or whenever a predetermined number of transaction records have been newly recorded in the database system; and

re-determining the one or more correlation values in relation to each re-selected set.

13. The transaction authorization method of claim 11, further comprising:

selecting the first sets of transaction records based on payee-related information in the transaction records.

14. The transaction authorization method of claim 9, wherein the transaction records stored in the database system include transaction records for second-type payment transactions, further comprising:

performing the analysis in relation to a received request for authorization of a first-type payment transaction; and

including transaction records for second-type payment transactions in the first set or including transaction records for second-type payment transactions in the second set.

15. The transaction authorization method of claim 14, wherein the transaction records for second-type payment transactions each include a transaction request answer code generated by a remotely located further transaction authorization system further comprising:

evaluating the first set by referring to the transaction request answer code in the transaction records for second-type payment transactions included in the first set;

or

evaluating the selected second set by referring to the transaction request answer code in the transaction records for second-type payment transactions included in the selected second set.

16. The transaction authorization method of claim 9, further comprising:

determining one or more conditional probabilities in relation to the selected second set and setting the at least one attribute threshold value based on the one or more conditional probabilities, the conditional probabilities indicative of a probability of one or more realizations of one or more first transaction-related parameters under the condition of one or more realizations of one or more second transaction-related parameters.

17. A computer readable medium having stored thereon computer program instructions that when executed, cause a computer processor to perform a method for authorizing a transaction, the method comprising:

receiving a request for authorization of an electronic payment transaction, wherein the request includes one or more transaction-related attributes associated with the electronic payment transaction;

performing an analysis in relation to the received authorization request and determining an authorization output based on the analysis, the analysis including application of one or more checking rules of the if-then clause type comparing one or more of the transaction-related attributes to one or more predefined attribute threshold values;

accessing a database system storing transaction records for a plurality of past electronic payment transactions wherein each transaction record in the database system includes a payor account identifier;

evaluating a first set of stored transaction records to determine one or more characteristic values related to the first set, wherein the characteristic values include one or more correlation values indicative of a transaction outcome correlation function, the correlation value determined from the first set of transaction records as follows;

a. determining a length of time between a first transaction and a second transaction in the first set of transaction records, wherein the first transaction at a first time had a negative outcome and the second transaction at a second time had a positive outcome, wherein the first transaction and the second transaction are for the same payor account;

b. repeating the determination of a length of time for at least a third transaction and a fourth transaction to create a distribution of the lengths of time;

c. determining one or more transaction outcome correlation functions based on the distribution of the lengths of time, wherein the transaction outcome correlation function provides a conditional probability for predicting the outcome of a transaction according to one or more of the transaction-related attributes;

d. determining a characteristic magnitude associated with the value of the conditional probability for a successful outcome; and

e. setting the characteristic magnitude of the one or more transaction outcome correlation functions as a respective correlation value;

selecting the second set of transaction records to span a time period satisfying a predetermined condition in relation to a temporal correlation length represented by at least one of the one or more correlation values;

evaluating the selected second set of transaction records; and

setting at least one attribute threshold value in at least one checking rule based on the evaluation of the second set of transaction records.