Block, Inc.
Fraud detection in portable payment readers

Abstract:

A payment reader and a POS terminal may communicate over a wireless connection. An original state of the payment reader can be used to determine a behavioral model, wherein the behavioral model defines an expected behavior of the payment entity. The system and method include detecting a change in the original state of the payment entity, wherein the change in the original state is triggered by another payment entity not authorized by the merchant; comparing the change of the original state with a threshold deviation defined by the behavioral model; and if the change of state is not within the threshold deviation, performing one or more actions to revert the payment entity to the original state.