Method and system for determining point of sale authorization

• US 9,111,278 B1
• Filed: 10/07/2013
• Issued: 08/18/2015
• Est. Priority Date: 07/02/2010
• Status: Active Grant

• Current Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Original Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Inventors: Barton, Thomas C., Paulson, Harold, Varhus, Elizabeth Pierce
• Primary Examiner(s): Iwarere, Seye
• Application Number:
  US14/047,272
• Time in Patent Office: 680 Days
• Field of Search: 705/16
• US Class Current: 1/1
• CPC Class Codes: G06Q 20/20 Point-of-sale [POS] network systems
• CPC Class Codes: G06Q 20/4016 involving fraud or risk level assessment in transaction processing
• CPC Class Codes: G06Q 20/405 Establishing or using transaction specific rules

Abstract

According to an embodiment of the present invention, an automated computer implemented method and system for determining authorization for a point of sale transaction, wherein the method is executed by a programmed computer processor which communicates with a user via a communication network comprising receiving a point of sale authorization request for a transaction from a customer at a merchant, via a communication network; accessing profile data associated with one or more of the customer, an account associated with the customer and the merchant involved in the transaction; applying one or more rules to the authorization request wherein the one or more rules comprises one or more of credit rules and fraud rules; applying one or more scoring algorithm to the authorization request wherein the one or more scoring algorithm indicates an assessment of risk; determining an authorization response, via a programmed computer processor, based at least in part on a combination of profile data, the one or more applied rules and the one or more applied scoring algorithms; providing the authorization response for the transaction via the communication network.

Claims

1. An automated computer implemented method for determining authorization for a transaction based on a merchant profile, wherein the method is executed by a decision engine comprising one or more computer processors which communicates with a user via a communication network, the method comprising the steps of:

receiving an authorization request for a transaction from a customer at a merchant location, via a communication network;

accessing a customer profile associated with the customer, from a computer database containing customer profile data and merchant profile data wherein a customer profile is associated with a particular customer and wherein a merchant profile is associated with a particular merchant, wherein the merchant profile comprises a merchant behavior profile, a merchant type, and a geographic location of the merchant;

accessing, from the computer database, a merchant profile associated with a merchant involved in the transaction;

executing, with the decision engine, one or more rules to the authorization request wherein the one or more rules generate merchant segmentation data to identify potentially fraudulent activity;

executing, with the decision engine, one or more scoring algorithms to the authorization request wherein the one or more scoring algorithms indicate an assessment of risk;

performing, with the decision engine, a velocity check to the transaction wherein the velocity check refers to a frequency of spend over a period of time for similar transactions for the merchant;

performing, with the decision engine, a distance check to the transaction wherein the distance check refers to a distance between a current transaction and a previous transaction;

in response to the customer profile data, the merchant profile, the merchant segmentation data, the assessment of risk, the frequency of spend and the distance check, automatically determining, with the decision engine, an authorization response; and

transmitting the authorization response for the transaction via the communication network.

2. The method of claim 1, wherein the merchant location comprises an online website.

3. The method of claim 1, wherein the merchant profile comprises an intersection profile with a card profile to determine at which merchants the card has been used.

4. The method of claim 1, wherein the velocity check is applied to the same merchant.

5. The method of claim 1, further comprising the step of:

applying a feedback loop to update the merchant profile.

6. The method of claim 1, wherein the merchant profile data comprises one or more fraud indicators.

7. The method of claim 1, wherein the one or more scoring algorithm comprises credit risk and fraud risk;

wherein the fraud risk is based on one or more of fraud events and fraud trends.

8. The method of claim 1, wherein the one or more scoring algorithm comprises one or more of profitability, spend utilization and attrition.

9. The method of claim 1, wherein the authorization response comprises one or more of memo on account, queue for credit review, queue for fraud alert.

11. The system of claim 8, wherein the merchant location comprises an online website.

12. The system of claim 8, wherein the merchant profile comprises an intersection profile with a card profile to determine at which merchants the card has been used.

13. The system of claim 8, wherein the velocity check is applied to the same merchant.

14. The system of claim 8, wherein the instructions operable to cause the one or more processors to perform operations further comprise:

applying a feedback loop to update the merchant profile.

15. The system of claim 8, wherein the merchant profile data comprises one or more fraud indicators.

16. The system of claim 8, wherein the one or more scoring algorithm comprises credit risk and fraud risk;

wherein the fraud risk is based on one or more of fraud events and fraud trends.

10. An automated computer implemented system for determining authorization for a transaction based on a merchant profile, the system comprising:

a computer database containing customer profile data and merchant profile data wherein a customer profile is associated with a particular customer and wherein a merchant profile is associated with a particular merchant, wherein the merchant profile comprises a merchant behavior profile, a merchant type, and a geographic location of the merchant and

a decision engine, which decision engine comprises one or more computer processors and is coupled to the computer database and programmed to;

receive an authorization request for a transaction from a customer at a merchant location, via a communication network;

access, from the computer database, a customer profile associated with the customer;

access, from the computer database, a merchant profile associated with a merchant involved in the transaction;

execute one or more rules to the authorization request wherein the one or more rules generate merchant segmentation data to identify potentially fraudulent activity;

execute one or more scoring algorithms to the authorization request wherein the one or more scoring algorithms indicate an assessment of risk;

perform a velocity check to the transaction wherein the velocity check refers to a frequency of spend over a period of time for similar transactions for the merchant;

perform a distance check to the transaction wherein the distance check refers to a distance between a current transaction and a previous transaction;

in response to the customer profile data, the merchant profile, the merchant segmentation data, the assessment of risk, the frequency of spend and the distance check, automatically determine an authorization response for the transaction, with the decision engine; and

transmit, using the communication network, the authorization response to the authorization request for the transaction.