Abstract: A method for determining a fraud score associated with a monetary transaction facilitated using a payment card in a store is disclosed. The method comprises receiving data representative of an incoming payment transaction; analyzing a location of an owner of the payment card and a location of the store for determining a location rating; analyzing a location behavior profile (LBP) related to the payment card for determining a behavior rating, wherein the analysis is based in part on the incoming payment transaction; 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 the 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.

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.