Systems and methods for detecting collusion between merchants and cardholders

A method for detecting collusion between a candidate merchant and a candidate cardholder involved in a purchase transaction, said method comprising:

• receiving, at a collusion analytics (CA) computing device, transaction data from a payment processor of a payment processing network associated with a candidate transaction of a candidate merchant and a candidate cardholder, wherein the candidate transaction is a purchase transaction initiated by the candidate cardholder using a payment card with the candidate merchant;
• retrieving, based on the transaction data associated with the candidate transaction, merchant data associated with the candidate merchant from a database;
• retrieving, based on the transaction data associated with the candidate transaction, cardholder data associated with the candidate cardholder from the database;
• generating, by the CA computing device, collusion analytics data based at least partially on the merchant data the cardholder data, and the transaction data, wherein the collusion analytics data includes a plurality of data elements, and wherein each data element is associated with a predefined value that indicates a respective likelihood of collusion between the candidate merchant and the candidate cardholder for the candidate transaction;
• calculating a collusion confidence score for the candidate transaction based on the generated collusion analytics data, wherein the collusion confidence score indicates a level of confidence that collusion between the candidate merchant and the candidate cardholder occurred with the candidate transaction;
• receiving, from one or more user computing devices associated with one or more users, (i) a first threshold indicating the collusion confidence score determined by the users to be associated with legitimate transactions and (ii) a second threshold indicating the collusion confidence score determined by the users to be associated with transactions involving collusion, wherein the one or more user computing devices include at least one of a payment processor and an issuer computing device of an issuer of the payment card used during the candidate transaction;
• and
• transmitting, by the CA computing device, a collusion alert, during processing of the candidate transaction based on the collusion confidence score, to the one or more user computing devices, wherein the collusion alert causes the one or more user computing devices to one of (i) decline the candidate transaction in response to the confidence collusion score being above the second threshold, (ii) issue a supplementary authentication challenge to a computing device of the candidate cardholder as a predicate to authorizing the candidate transaction in response to the collusion confidence score being above the first threshold and below the second threshold, and (iii) proceed with authorizing the candidate transaction in response to the collusion confidence score being below the first threshold.

At least one non-transitory computer-readable storage media having computer-executable instructions embodied thereon, wherein when executed by at least one processor, the computer-executable instructions cause the processor to:

• receive transaction data from a payment processor of a payment processing network associated with a candidate transaction of a candidate merchant and a candidate cardholder, wherein the candidate transaction is a purchase transaction initiated by the candidate cardholder using a payment card with the candidate merchant;
• retrieve, based on the transaction data associated with the candidate transaction, merchant data associated with the candidate merchant from a database;
• retrieve, based on the transaction data associated with the candidate transaction, cardholder data associated with the candidate cardholder from the database;
• generate collusion analytics data based on the merchant data the cardholder data, and the transaction data, wherein the collusion analytics data includes a plurality of data elements, and wherein each data element is associated with a predefined value that indicates a respective likelihood of collusion between the candidate merchant and the candidate cardholder for the candidate transaction;
• calculate a collusion confidence score for the candidate transaction based on the generated collusion analytics data, wherein the collusion confidence score indicates a level of confidence that collusion between the candidate merchant and the candidate cardholder occurred with the candidate transaction;
• receive, from one or more user computing devices associated with one or more users, (i) a first threshold indicating the collusion confidence score determined by the users to be associated with legitimate transactions and (ii) a second threshold indicating the collusion confidence score determined by the users to be associated with transactions involving collusion, wherein the one or more user computing devices include at least one of a payment processor and an issuer computing device of an issuer of a payment card used during the candidate transaction;
• and
• transmit a collusion alert, during processing of the candidate transaction based on the collusion confidence score, to the one or more user computing devices, wherein the collusion alert causes the one or more user computing devices to one of (i) decline the candidate transaction in response to the confidence collusion score being above the second threshold, (ii) issue a supplementary authentication challenge to a computing device of the candidate cardholder as a predicate to authorizing the candidate transaction in response to the confidence collusion score being above the first threshold and below the second threshold, and (iii) proceed with authorizing the candidate transaction in response to the collusion confidence score being below the first threshold.