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Description  |
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FIELD OF THE INVENTION
The field of the invention relates to portable payment devices and more
particularly to electronic devices suited to arranging credit purchases or
value transfers.
BACKGROUND OF THE INVENTION
Devices for making purchases without the necessity of cash are known. Such
devices range from pre-loaded debit cards (e.g., farecards on public
transportation systems) to credit cards. While such devices are similar in
some regards, they differ in others. The devices are similar in that they
are typically constructed of plastic with a magnetic stripe on one side or
the other. They differ in that a farecard is altered during use while a
credit card is not.
The farecard is altered during use in that a numerical value (e.g., a
dollar value or a number of bus rides) stored on the card is changed
during use. Each time that the card is used a value indicative of the
value of the use is subtracted from the value stored on the farecard and a
new, lesser value is stored on the farecard in place of the original
value.
A credit card, instead of storing a numerical suggestion of value on the
magnetic stripe of the credit card, provides a promise of future payment
of an incurred debt from an authorized user of the credit card. Such
devices are also typically constructed of plastic with a visually readable
indicia of origin (i.e., VISA, MASTERCARD, etc.) and a magnetic strip. The
magnetic strip typically contains an account number of the authorized user
of the card. The magnetic strip may also contain a personal identification
number (PIN) of the authorized user.
To use a credit card a user simply presents the card to a vendor as an
indication of a request for credit. The vendor may simply run the card
through an imprinter and ask the user to sign the imprint or the vendor
may, in addition, call an issuing bank for an authorization number. In
many cases, no attempt is made to verify that the user is, in fact, an
authorized user.
Where the credit card is also used as a cash station card, an additional
requirement of use may be that the user enter his personal PIN number.
However, since the PIN number was already present within the magnetic
strip of the credit card and since a person with a card reader and the
facilities to decode the magnetic strip may also be able to decode the
authorized user's PIN number, the additional requirement of the entry of a
PIN number is not a very effective means of preventing fraud.
Smartcards are also known. Smartcards attempt to solve the problem of
storing PIN numbers on credit cards by encrypting the PIN number with
other numbers such as a public key and/or a time of day and month.
Further, an account number of an authorized user may also be encrypted
with the same or a different public key as a further deterrent to
decryption by an unauthorized user.
Upon receiving a smartcard, a cardreader of a vendor may first read an
unencrypted name of an issuing credit card company followed by an
encrypted account number of an account of the authorized user and PIN
number. A modem interconnected with the vendor's card reader uses the
unencrypted name of the issuing credit card company to establish a data
link with the issuing credit card company. The modem then transmits the
encrypted information to the issuing credit card company which then, using
its own version of the public key, decodes the received information.
Upon decoding the received information, the issuing credit card company may
authorized the transaction based upon the decoded information or may
request that the credit card user enter his PIN number through an
associated keyboard. If the issuing credit card company authorizes the
sale, the issuing credit card company may transmit an authorization number
back to the vendor's modem authorizing the sale.
If the issuing credit card company, as an additional security feature,
should also request that the user enter his PIN number, the user would
enter his PIN number which the issuing credit card company would then
compare with the decoded PIN number and either authorize or decline the
transaction. In entering his PIN number through the keyboard of the vendor
(or at a cash station) the user risks disclosure of the PIN number to the
vendor or nearby onlookers. If the user should forget his card upon
leaving the vendor's place of business, or should be later pick-pocketed
by an onlooker of the transaction, the security offered by the card may be
completely compromised.
Credit cards in general have become an indispensable part of the world
economy. Because of the importance of credit or other cashless
transactions a need exists for a method of accomplishing such transactions
without the risk of publicly disclosing confidential information such as
PIN number that are otherwise used to protect credit accounts.
SUMMARY OF THE INVENTION
It is a primary object of this invention to provide an apparatus for making
cashless purchases that cannot be used except by an authorized user.
It is a further object of the invention to provide an apparatus for making
cashless purchases that does not require the public entry of personal
identification numbers.
It is a further object of the invention to provide an apparatus for making
cashless purchases that can be used to make direct value transfers for
inexpensive purchases that does not require an interconnection to an
external credit verification network.
These and other objects are provided by an automatic portable account
controller for remotely arranging for payment of debt to a vendor. The
controller includes means for activating the portable account controller
upon detection of indicia of identity of an authorized user and means for
selecting a mode of payment to the vendor. The controller further includes
means for entering a payment amount, means for communicating with the
vendor, and means for executing the selected mode of payment to the vendor
through the means for communicating.
The solution to the problem of security in credit purchases lies,
conceptually, in the use of a portable account controller for remotely
arranging for payment of debt (portable purchasing device) carried by the
authorized user which has the capability of encrypting information (e.g.,
account number, PIN number) transmitted over public communication
facilities (e.g., telephone lines). The portable purchasing device, under
an embodiment of the invention, is equipped with its own security features
preventing use by other than an authorized user. Such security features
appropriate for the portable purchasing device may require identification
of a user through a retinal or fingerprint scan, or entry of a local PIN
number (i.e., different from the transmitted PIN number).
Upon activation of the portable purchasing device by retinal scanning,
fingerprint identification or entry of a local PIN number, the security
features of the portable purchasing device may cause the portable
purchasing device to remain active for a fixed time interval (e.g., one
hour) or deactivate after a single purchasing transaction. If the security
feature of the portable purchasing device were based upon fingerprint
identification or acoustic analysis of the bone structure of a hand
holding the portable purchasing device, the device may remain active for
so long as the portable purchasing device were held by the authorized
user. If the security feature were based upon a local PIN number or other
biotic parameters of the authorized user that cannot be continuously
measured (e.g., retinal scanning), then periodic reactivation would be
required.
Under the invention the portable purchasing device interacts with a vendor
through a communication port. The communication port may be infrared (IR),
radio frequency (RF), or simply a telephone jack. Upon deciding to make a
purchase from a vendor, an authorized user would place the portable
purchasing device in an appropriate location for exchanging information
through the communication port. If the communication port were IR or RF
the user may simply place the portable purchasing device in a cradle where
a transceiver of the communication port of the portable purchasing device
is in opposing relationship with a transceiver of a communication port of
the vendor. Likewise, if the communication port were a telephone jack, the
user would simply interconnect the portable purchasing device with a
telephone cord of the vendor.
Upon interfacing the portable purchasing device with the communication
facilities of the vendor, transfer of value for a purchase may occur under
any one of a number of possible modes selectable by the user and
acceptable to the vendor. At a first, and simplest level, the user of the
portable purchasing device transfers value directly to the vendor in a
manner similar to the transfer of electronic cash, but without the
assistance of a bank.
Under the embodiment, to make a direct payment from cash memory, (i.e., via
off-line mode) the user of the portable payment device selects "direct
value transfer" from a menu on a display of the portable payment device.
The user then enters an amount for direct transfer. Once the portable
purchasing device is placed in a position to facilitate the exchange of
information (e.g., the vendor provides a payment cradle where the port of
the portable communication device is positioned proximate a communication
port of a data processing system of the vendor), the portable payment
device signals the vendor communication port with a "ready" prompt. When
the vendor port responds, the portable purchasing device signals the mode
of payment as direct transfer. The vendor communication port transfers the
mode of payment to the vendor data processing system (herein referred to
as an electronic cashbox) which then queries the vendor through the
vendor's local display whether direct payment is acceptable. If the vendor
enters a favorable response (e.g., "Y" or simply presses ENTER) at a
keyboard of the vendor's electronic cashbox, the vendor's communication
port signals the portable purchasing device that the transaction has been
accepted and the transaction is completed.
Direct payment may also occur where the user places his portable purchasing
device upon a payment cradle and the vendor transmits a price to the
portable purchasing device. The user may press an "OK" key (e.g., enter)
transferring payment to the vendor or the user could add a percentage to
the total (e.g., a tip) before authorizing payment.
Alternatively, the user of the portable purchasing device may decide to pay
by credit or may pay by transferring cash from a bank account of the
authorized user to a bank account of the vendor (i.e., via on-line mode).
In either case the user places the portable purchasing device in a
purchasing cradle and the portable purchasing device arranges payment
through the communication facilities (e.g., telephone lines) of the
vendor. The portable purchasing device accomplishes such mode of payment
by first passing a telephone number of the user's bank or credit source to
the vendor's payment receipt system.
Upon receiving the telephone number the vendor's system may first check
that the telephone number is that of a financial institution recognized as
a good credit risk by the vendor before accepting payment from such
institution. Upon completing such checks, the vendor's system passes the
telephone number to the local public switch telephone network (PSTN) for
connection to the selected financial institution. Following completion of
the connection with the selected institution, the vendor's system and
portable purchasing device monitor the connection for transmissions and
respond as appropriate to the selected mode of payment.
Whatever the selected mode of payment, the portable purchasing device must
first uniquely identify itself to the selected financial institution
(i.e., a bank or the vendor's house account) before the transaction may be
completed. However, since the vendor is monitoring the connection, steps
must be taken to ensure the security of access to the authorized user's
bank accounts.
The portable purchasing device may do this by first transmitting an
identifier (e.g., a social security number, account number, etc.) of the
authorized user. Once the authorized user has been identified to the bank,
the bank may use such identification to access a file of the authorized
user for a set of encryption keys to decode subsequent transmissions from
the portable purchasing device. The portable purchasing device using an
identical set of encryption keys encodes further indicia of identity
(e.g., a PIN number) for transmission to the bank which may only be
decoded by the bank. The portable purchasing device may also encode other
information (i.e., mode of payment to the vendor and payment amount)
transmitted to the bank. The bank, upon decoding the transmission,
responds in the clear (i.e., no encryption) with an acceptance or
rejection message (or with a request for re-transmission if an error
occurred).
The vendor's system, monitoring the connection, receives the acceptance
message, and transmits an appropriate response. If the transaction were a
credit purchase the vendor's system may transmit a merchant number, amount
of purchase, and a request for a credit authorization number. If the
purchase involved a cash transfer to a vendor bank account, the vendor may
respond with indicia of identity of the vendor's bank and bank account
number along with an expected amount of the transfer. The authorized
user's bank, upon receiving the response from the vendor, compares the
amount of purchase transmitted by the portable purchasing device to the
expected amount from the vendor and, if the amounts match, completes the
transaction.
Further objects, features and advantages of the present invention will
become apparent from the following detailed description of the invention
taken in conjunction with the accompanying drawings wherein like reference
numerals designate like elements throughout the several views.
BRIEF DESCRIPTION OF THE DRAWINGS
FIG. 1 is a block diagram of a portable purchasing device in accordance
with a preferred embodiment of the present invention;
FIG. 2 is a block diagram of a vendor cashbox for use with the portable
purchasing device of FIG. 1;
FIG. 3 is a block diagram of a system for programming a cash memory of the
portable purchasing device of FIG. 1; and
FIG. 4 is a flow chart of the steps of operation of the portable purchasing
device of FIG. 1.
DESCRIPTION OF A PREFERRED EMBODIMENT
FIG. 1 is a block diagram of a portable purchasing device 10, in general. A
controller 20 receives input information from a keyboard 14 (or optional
scanner 26) and displays information on display 12. Program instructions
for the portable purchasing device 10 are stored within a memory 16 and
loaded into the controller 20 upon activation. The portable purchasing
device 10 interacts with external devices through a transcoder 24 and
transceiver 22.
The transceiver 22 may exchange information in the IR range or in the
visible range through use of an appropriate light emitting diode (LED) and
photodetector. The transceiver may also operate in the RF range using
amplitude modulation (AM), frequency modulation (FM), quadrature amplitude
modulation (QAM), or any other appropriate modulation technique. The
transceiver 22 may also interact with external devices directly through
modem and telephone jack.
The portable purchasing device 10 under an embodiment of the invention is
typically programmed under the auspices of an issuing bank for the benefit
of its customers. FIG. 4 is a flow chart showing, in summary form, the
program steps of a portable purchasing device 10 under an embodiment of
the invention. Reference will be made to FIG. 4 as appropriate to an
understanding of the invention.
As part of the programming of the portable purchasing device 10 the issuing
bank may enter a numerical value in a cash memory 18 of the memory 16 of
the portable purchasing device 10. The numerical value represents a cash
value that the authorized user of the portable purchasing device has
received from the issuing bank, and which the bank has stored in the
portable purchasing device for purposes of making direct value transfers
to vendors. The cash memory area of the memory 16 is not accessible to a
user except for withdrawals. The cash memory 18 is protected by a set of
passwords known only to the bank. Additions to the value stored in cash
memory 18 must be performed under the control of a bank or other
authorized institution (which act as a guarantor of the value originally
stored within the portable purchasing device 10) and which possesses the
passwords that allow access to a store algorithm used by the portable
payment device.
Electronic cash is limited to some maximum value (e.g., $100.00) and is
used primarily to pay debts where verification of credit worthiness is not
practical (e.g., payment of bus fare, purchasing a newspaper, etc.).
Electronic cash is also used where the context of the transaction requires
that payment be made as quickly as possible.
Stored with the cash value in the portable purchasing device 10 is an
identifier of the bank storing the most recent cash deposit to the
portable purchasing device as well as any previously storing banks and
electronic cash remaining from the previous deposit. Also stored within
cash memory to provide an audit trail of proper operation of the portable
purchasing device 10 is a summary of the most recent deposit to cash
memory as well as identifiers of vendors to which dispersements were made
and the times and dates (temporal indicia) of such dispersements.
Also entered into a secure area 30 of memory 16 is a telephone number of
the issuing bank as well as numbers of various bank accounts of the
authorized user. A set of encryption keys are also stored within secure
memory 30. The encryption keys may be any non-repeating number sequence
(e.g., a public key).
The program under which the portable purchasing device 10 operates is
loaded into a read only memory (ROM) 28 of the portable purchasing device
10 during manufacture by methods well known in the art. The program (FIG.
4) may be activated by pressing any key on the keyboard 14 of the portable
purchasing device 10. Following activation of any key the portable
purchasing device 10 enters a program step 100 where the portable
purchasing device waits a time period (e.g., 30 seconds) for entry of
indicia of an authorized user. If the portable purchasing device 10 does
not receive the proper indicia of the authorized user within the 30
seconds (or if the entered indicia is incorrect) the device 10 again
deactivates.
The indicia of the authorized user may be any alpha-numeric or biotic
parameter capable of input through the keyboard 14 or optional scanner 26
and a summary of which may be stored within memory 16. The indicia of the
authorized user may be a local PIN number of may be the same PIN number
that is later encoded and transmitted to an issuing bank.
Where the indicia of the authorized user is entered through the scanner 26,
the indicia may be a fingerprint of the authorized user or where the
scanner 26 is a retinal scanner the indicia may be the image of the
authorized user's retina. Where the scanner 26 is an acoustic scanner,
distinguishable differences in the bone structure of the authorized user's
hand may be scanned and stored as the indicia of the authorized user.
Following activation, the portable purchasing device 10 waits for the user
to select 102 a mode of payment. The possible modes of payment may be
displayed on the display 12 in the form of a menu. Mode selection 102 may
be accomplished by entering a numerical value displayed beside a menu
item, or where a touch-screen is used for the display 12, the selection
may be accomplished by the user touching an appropriate part of the menu
on display 12.
Following mode selection 102, the portable purchasing device 10 wait for
entry of a purchase amount. The purchase amount is typically entered as a
dollar value through the keyboard 14 or through a touch-screen display 14
by touching appropriate symbols on the display 14.
Following entry of a dollar value a controller 20 executes the selected
payment. As a first step, the controller checks whether a direct value
transfer has been selected 108. If so, the controller verifies 110 that a
sufficient balance remains within cash memory 18 for payment of the debt.
If a sufficient balance remains within cash memory 18, the controller 20
causes a connect tone to be transmitted by transceiver 22. The connect
tone transmitted by the transceiver 22 of the portable purchasing device
10 is detected by a transceiver 62 of the vendor's electronic cashbox 50
and transferred to a controller 60 of the cashbox 50. The controller 60,
upon detecting the connect tone, responds with an acknowledge.
The portable purchasing device 10 upon receiving the connect tone transmits
a serial number of the portable purchasing device 10 as well as an entered
payment value. The serial number of the portable purchasing device 10
contains, embedded within, a serial number of the issuing bank as well as
a sequence number uniquely identifying the portable purchasing device 10.
The vendor's cashbox 50 first checks by reference to memory 56 whether the
issuing bank is in good standing with the vendor as far as honoring direct
value transfers. The vendor then checks that the portable purchasing
device is an appropriate model compatible with the cashbox 50 and that the
payment amount is of a proper value.
If the vendor cashbox 50 finds the transaction acceptable, the cashbox 50
transmits, through the transceiver 62, a proceed command to the portable
purchasing device 10 that contains a unique identifier of the cashbox 50.
The portable purchasing device 10 responds by executing a value transfer
112 by transmitting a transaction number to the cashbox 50 which may be a
combination of the identifier of the portable purchasing device 10, the
identifier of the cashbox 50 and a numerical value of the transaction as
well as certain other encrypted digits that may be used for transaction
certification. The encrypted digits may be a combination of the
identifiers of both portable purchasing device 10, cashbox 50, the time
and date (encrypted temporal indicia) of the transaction, and the amount
of the transaction all encrypted through use of a public key known only to
the issuing bank and portable purchasing device 10.
The vendor's electronic cashbox 50 upon receipt of a transaction number of
a direct value transfer stores the transaction number in a cash transfer
file 57 of a memory of the electronic cashbox 50 for later redemption.
Redemption of direct value transfers are periodically done at the vendor's
convenience. The vendor may redeem direct transfers by transmitting a
summary of all transaction numbers to the vendor's bank through the
cashbox controller 60, modem 64 and PSTN, or the vendor may simply
download the transaction numbers to a floppy disk and take such floppy
disk to the vendor's bank with the vendor's other daily receipts or the
vendor may transfer such information from his memory device (e.g., a hard
disk) to the banks memory device (e.g., another hard disk) through an
appropriate data transfer (i.e., downloading between disk drives).
The vendor's bank upon receiving the summary of transaction numbers, first
retrieves an identifier of the bank issuing the portable purchasing device
10, and a purchase amount, from the transaction number. The vendor's bank
may then transmit a summary of charges to the issuing bank for credit to
the vendor's account. The issuing bank may immediately issue a credit or
wait until the portable purchasing device 10 downloads its summary of
purchases for comparison with transaction numbers received from vendor | | |
