Patent ID: 8533118

Claim:
A system for authenticating a consumer conducting a transaction with a merchant, the system comprising: a challenge-response server computer, the challenge-response server computer comprising modules capable of executing on the challenge-response server computer, the modules comprising: a risk analyzer module configured to obtain a risk score for the transaction; and a challenge optimizer module configured to: receive an enrollment request message sent by the merchant; identify whether authentication of the consumer is available; if authentication is available, identify a type of authentication available, wherein the type of authentication available includes at least one of a password-based authentication or a challenge-response authentication; send an enrollment response message to the merchant based on the type of authentication available; generate an authentication challenge using the risk score and compare a response received from the consumer to an expected response when challenge-response authentication of the consumer is available and the password-based authentication is not available; and not generate an authentication challenge when challenge-response authentication of the consumer is not available.