Abstract:
A secure Internet transaction processing system in which individual ones of a plurality of customers order from a targeted one of a plurality of merchants through a processing center. The purchaser&#39;s purchase card data together with the purchaser&#39;s personal identification data (e.g. personal identification code or signature) is encrypted at the customer ordering terminal and sent to the processing center over the Internet where it is decrypted for the purpose of undertaking a standard procedure to verify payment capability. The order is then placed by the processing center, together with payment capability confirmation, over the Internet with the targeted merchant thereby avoiding access at the merchant&#39;s station to the customer&#39;s purchase card or check identification numbers and personal identification data.

Description:
REFERENCE TO RELATED APPLICATIONS  
       [0001]    This application is a continuation-in-part of patent application Ser. No. 09/534,681 filed Mar. 24, 2000 and entitled: Secured Purchase Card Transaction. 
     
    
     
       BACKGROUND OF THE INVENTION  
         [0002]    The potential hazard of a security breach in the use of a debit card or a credit card from home for ordering goods or services over the Internet is a problem that inhibits the use of purchase cards (that is, credit cards and debit cards). The security problem is particularly severe when it comes to the risks that customers have in the use of debit cards. There appears to be no existing home customer terminals through which a purchase card may be swiped to effect a purchase of goods or services from a merchant or to provide payment for ongoing services.  
           [0003]    When a purchase card is used from home for an Internet purchase, the customer enters the card number through the computer keyboard. The card number is then directly available to the merchant and available to one who can hack the merchant&#39;s list. Unfortunately, credit card fraud is common. The regulations and business practice tend to impose the loss on the merchant or the financial institution that processes the merchant&#39;s account. Current regulations put a debit cardholder at great risk. The entire balance in the bank of a debit card holder may be at risk.  
           [0004]    Many small and medium size merchants are reluctant to sell over the Internet because of the lack of assured payment. The credit card mode of payment does not result in a final sale. The customer has the opportunity to change his or her mind. The use of debit cards would overcome that problem. But, because of the lack of security on the Internet, pin based debit cards are not widely used. There appears to be no effort now being made to provide this debit card service to the smaller merchants.  
           [0005]    More recently, check accounting systems have been employed to permit the use of a check in a fashion analogous to the use of a debit card. The limitations and risks in a check accounting system for Internet purchase purposes are similar to the limitations and risks in the use of a debit card for Internet marketing.  
           [0006]    Accordingly, a major purpose of this invention is to provide a secure Internet marketing system for use of purchase cards such as credit cards or debit cards and for use of checks.  
           [0007]    It is a related purpose of this invention to facilitate merchant payment and to encourage merchant willingness to become part of Internet commerce.  
         BRIEF DESCRIPTION  
         [0008]    In brief, the embodiment illustrated is a secured purchase document transaction system in which a large number of customer ordering terminals are involved as well as a large number of merchant stations. For each customer ordering terminal, there is a facility for a purchase card swipe or for check scanning or both to obtain the card number or check account and routing numbers. There is also either a keypad or the like to permit entering a purchaser identification code (PIC) or an electronic signature encoder. At each customer ordering terminal, there is an encryption module which encrypts the swiped purchase card number or check number as well as the PIC or signature encoder. This encrypted information is entered into the customer&#39;s personal computer. Then the encrypted information, together with the customer ordering information identifying a merchant and a product, is sent over the Internet by the personal computer to a processing center.  
           [0009]    There may be a PIC entry through a keypad or a signature entry mechanism through a known type of electronic signature pad. Depending upon the circumstance and installation, there may be one or the other or both of these identification input devices.  
           [0010]    Associated with each customer ordering terminal, is an encryption module which encrypts the purchase card number or check number as well as the PIC number or signature.  
           [0011]    At the processing center, the debit or credit payment capability is confirmed in a standard fashion with appropriate bank and credit card companies. When confirmation is obtained, the processing center prepares appropriate information for a merchant including details of the purchase order and a report verifying customer payment capability. This information is then sent over the Internet to the merchant targeted by the customer order. The processing center does not send any sensitive customer information to the merchant. Thus credit card number, debit card number, account number, purchaser identification number and signature are retained secure at the processing center.  
           [0012]    The processing center also prepares a purchase verification notice to the customer which is sent over the Internet to the customer originating the order. Where debit cards or checks are used and the payment is received from a bank, the processing center provides a financial holding center to hold the payment for the targeted merchant.  
       
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
       [0013]    [0013]FIG. 1 is a high level block arrangement illustrating the system of this invention and particularly illustrates the relationship of the processing center to the customer and the merchant.  
         [0014]    [0014]FIG. 2 is a block flow diagram illustrating the system of this invention in relationship to one customer ordering encryption terminal purchasing from a particular merchant.  
         [0015]    [0015]FIG. 3 is a block diagram of a first embodiment of a customer ordering encryption terminal employing a purchase card swipe and a PIC entry keypad.  
         [0016]    [0016]FIG. 4 is a block diagram of a second embodiment of a customer ordering encryption terminal employing a purchase card swipe and a signature identification pad.  
         [0017]    [0017]FIG. 5 is a block diagram of a third embodiment of a customer ordering encryption terminal employing a check data reader and a PIC entry keypad.  
         [0018]    [0018]FIG. 6 is a block diagram of a fourth embodiment of a customer ordering encryption terminal employing a check data reader and a signature identification pad.  
         [0019]    [0019]FIG. 7 is a flow chart illustrating operation of the system of this invention.  
     
    
     DESCRIPTION OF THE PREFERRED EMBODIMENTS  
       [0020]    [0020]FIG. 1 illustrates the system of this invention in which a plurality of customers have encryption terminals  10  such as terminals  1 ,  2  . . . N.  
         [0021]    In addition, there are a plurality of merchant stations  12  represented by the merchant stations  1 ,  2  . . . N.  
         [0022]    A processing center  14  is at the heart of the communication between the customer terminals  10  and the merchant stations  12 . This processing center  14  is central to the security provided to each customer  10  and the assurance of payment provided to each merchant  12 . As indicated in FIG. 1, Internet transmission is employed to provide communication between a plurality of customers and a plurality of merchants.  
         [0023]    As shown in any of FIGS. 2 through 6, security is provided by an arrangement within each customer ordering encryption terminal  10  such that the personal identification information is encrypted by an encryption module  22  prior to being entered into the memory of the personal computer  24 . This assures that any hacking through to the personal computer  24  will not compromise the integrity of the terminal  10  and will not be able to reach the unencrypted personal information. This personal information is discussed below.  
         [0024]    The encrypted information can be decrypted only at the processing center  14 . The processing center  14 , with the decrypted information, obtains credit or debit information on the particular customer. Where the customer is using a debit card or check, the information can include bank confirmation that the amounts involved are in the customer&#39;s bank account. The system provides the capability to transfer the amount involved to a financial holding center  16  for the merchant; which holding center is under the control of the processing center  14 .  
         [0025]    Once the credit information or debit information has been confirmed, the processing center  14  then sends an appropriate statement to the designated merchant station  12  over the Internet and provides the merchant with information as to what has been ordered, identifying the customer and confirming that payment or credit has been made or is available.  
         [0026]    None of the merchant stations  12  receive the credit card number or debit card number or PIC number or check identification numbers or signature. The merchant stations  12  do not even receive an encryption of this data.  
         [0027]    As shown in FIG. 2, each customer terminal  10  includes a personal customer information input station  20 . This station  20  includes a card swipe and/or check data reader to accept purchaser account identification data (PAID) which can either be a credit card or a debit card or a check. This customer input station  20  also includes a purchaser personal identification data (PPID) reader which can be either or both of: (i) a keypad or the like for the entering of a personal identification code (PIC), and (ii) an electronic signature pad. The personal data entered at each personal customer information input station  20  is fed to an encryption module  22  that is used to encrypt the card or check identification data of the PIC number and/or signature; that is, encrypt the PAID and PPID. It is the encrypted purchaser identification information which is loaded into the PC  24 .  
         [0028]    As used herein, the term “purchase document” includes a credit card, or a debit card or a check.  
         [0029]    When the purchase document is a credit card, the card number will be swiped through a reader at the station  20  and that information will be encrypted by the module  24 .  
         [0030]    Where the purchase document is a debt card, the customer ordering station  20  swipe will detect the card number and the customer ordering station will have a keypad or other similar means for the debit card owner to insert their personal identification code (PIC). The encryption module  22  will encrypt both the debit card identification number and the PIN.  
         [0031]    Where the purchase document is a check, the customer ordering station  20  will have a check scan device to detect the account number and routing number. The customer ordering station has a keypad for the check owner to insert their PIC. The encryption module  22  will encrypt both the PIC and the check numbers.  
         [0032]    An electronic signature reading pad can be used instead of (or in addition) to the keypad for insertion of a PIC.  
         [0033]    The customer terminal  10 , after encryption of the personal information by the module  22  enters the encrypted information into the customer&#39;s personal computer  24 . The computer  24  then sends out the ordering information on the Internet as indicated at  26 ; which ordering information includes the encrypted purchaser account information data (PAID) and encrypted purchaser personal identification data (PPID). This ordering information is received at the processing center&#39;s processor  28 . The processing center  14  includes a decryption module  30  for decrypting the PAID and PPID.  
         [0034]    The processor  28  at the center  14 , as indicated at  31 , makes an appropriate inquiry of a bank or credit processing station concerning the availability of the funds in the bank for a debit card or check or the credit available for a credit card. The processor  28  then receives confirmation from the bank or the credit station.  
         [0035]    After the processor  28  receives the bank or credit confirmation, the processor  28  generates a purchase verification to the customer, as indicated at  32 , which is sent over the Internet to the customer. The processor  28  also generates a purchase order and report to the merchant, as indicated at  34 , which is sent to the designated merchant station  12 . The report to the merchant provides the merchant with two essential types of information. The first is an identification of the customer and of the item or service being ordered. The second is verification of a bank payment to cover a debit card or check or verification of credit availability to cover a credit card.  
         [0036]    The system may also provide a financial holding center  16  in which the amounts being transferred by a debit card or check from a bank for a merchant may be held for the merchant.  
         [0037]    The stage where the processor  28  makes inquiry, to determine if debit card funds or check funds are available or if credit is available and to receive information concerning such, is a known processing stage that is currently undertaken by merchants and/or banks that accept credit cards and/or debit cards. Accordingly, there is no need to go into a discussion of the verification processing. It might be noted that there is a forty-eight hour hold put on the transfer of debit card funds.  
         [0038]    In the FIG. 3 embodiment, the customer encryption terminal is essentially a keypad  40  and a card reader  42 , both of which provide inputs to the encryption module  22 . The output of the encryption module  22  is applied to the personal computer (PC)  24  for transmission over the Internet. In the FIG. 3 embodiment, the encryption module  22  will have to provide pass through capability for the keyboard input to the PC. In that embodiment, the encryption module  22  would therefore be plugged into the keyboard port of the personal computer. It is presently contemplated that it would be more user friendly to incorporate the encryption module  22  and card swipe reader  42  in a single unit so that the user will simply have to unhook the keyboard from the PC and insert the combined module between keyboard and PC. The encryption module can also be incorporated into the keyboard.  
         [0039]    A standard card reader is preferred for reasons of economy and performance. The encryption module  22  itself can employ any one of a number of known encryption algorithms appropriate to the level of security desired for the system.  
         [0040]    [0040]FIG. 4 illustrates an embodiment in which an electronic signature pad  44  is employed in lieu of the PIC keypad  40 . Electronic pads that encode a signature for transmission and confirmation are a known type of product. A signature pad  44  can be used in lieu of the PIC keypad  40  or, if security requirements are severe enough, in addition to the PIC keypad  40 .  
         [0041]    [0041]FIG. 5 illustrates a further embodiment of the customer ordering encryption terminal  10  in which a check data reader  46  is used in lieu of the purchase card reader  42 . Check data readers are known types of equipment which basically read the account number and the bank routing identification, normally found at the lower left-hand margin of the check.  
         [0042]    [0042]FIG. 6 is a fourth embodiment in which the check data reader  46  of the FIG. 5 embodiment is employed in connection with the electronic signature pad  44  feature of the FIG. 4 embodiment.  
         [0043]    Although not shown, it should be noted that in order to use a standard PC, there will be the need to employ a CD ROM input to the PC in order to provide appropriate directories and, most importantly, to provide a predetermined screen display interface with the customer.  
         [0044]    The transmission and reception of information over the Internet requires only known types of modem and other equipment as a component of the terminals  10 , processing center  14  and merchant stations  12  and thus are not described in any detail herein.  
         [0045]    [0045]FIG. 7 illustrates the transactional method that is performed by the system shown in FIGS. 1 through 6. The first two steps are for the purchaser to enter the purchaser&#39;s personal identification information. This includes entering the purchaser account identification data (PAID) at step  50  and also entering the purchaser personal identification data (PPID) at step  52 . These entry steps are made at the customer ordering terminal  10  and can employ any of the data entry units  40 ,  42 ,  44  and  46  illustrated in FIGS. 3 through 6.  
         [0046]    At step  54 , the purchaser personal identification information is encrypted and, notably, it is encrypted prior to entry into the personal computer  24  at the customer ordering terminal  10 .  
         [0047]    At step  56 , the purchaser&#39;s encrypted personal identification information is entered into a microprocessor such as a personal computer  26 .  
         [0048]    At step  58 , this encrypted purchaser personal identification information is transmitted over the Internet to the processing center  28 . This transmission step  58  will normally incorporate the designated merchant&#39;s identification and customer ordering information. These two items are provided by the purchaser by entering such into the purchaser&#39;s personal computer  26 .  
         [0049]    At step  60 , in the processing center  28 , the encrypted information is decrypted to provide unencrypted PAID and PPID at the processing center  28 .  
         [0050]    At step  62 , payment capability of the purchaser is confirmed by using the decrypted information. Thus providing either affirmative or negative payment capability information.  
         [0051]    At step  64 , in response to affirmative payment capability information, a statement is transmitted from the processing center  28  to a terminal  36  of a designated merchant. This step  64  provides the merchant with the customer ordering information. Step  64  also affirms ability for payment but does not include the purchaser personal identification information. The latter is maintained confidential at the processing center  28 .  
         [0052]    Step  66  designates that the preceding step  64  is taken without divulging the customer&#39;s personal identification information.  
         [0053]    Traditionally, individual customers have gone through a merchant in order to place their order and then the merchant would undertake the validation of the purchase card. As described above, this system decouples the set of customers from the set of merchants as well as decoupling each individual customer from the targeted merchant. The customer&#39;s security is greatly enhanced because no amount of hacking at or through a merchant&#39;s station would provide the customer&#39;s purchaser identification (PII). As a consequence of enhanced customer security, transactions are facilitated or encouraged and customers may find enhanced value in Internet transactions. As a consequence of more assured customer ability to pay, merchants should find enhanced value in Internet transactions.  
         [0054]    Definitions  
         [0055]    Purchaser Personal Identification Data (PPID)  
         [0056]    This application has described the use of a PIC or a signature, through a signature verification pad, as techniques of providing the needed personal identification. It should be understood that any individual biometric record or any other input under the control of the purchaser in lieu of the PIC or signature is an alternate to the specific implementations taught. The term PAID or purchaser personal identification data covers all the varieties of techniques that achieves this function.  
         [0057]    Purchase Card  
         [0058]    It should be understood that the purchase card can be a credit card, private label card, debit card, gift card or any other card or device which provides the purchaser account identification.  
         [0059]    Personal Account Identification Data (PAID)  
         [0060]    This personal account identification data or PAID disclosed in this application includes the use of a purchase card swipe or check data reader to obtain the purchaser&#39;s account identification data-to determine that the purchaser&#39;s account has the required balance or credit for the particular purchase.  
         [0061]    Purchaser Identification Information (PII)  
         [0062]    The term is used herein to refer to the combined PPID and PAID; both of which are encrypted by the module  44  before being sent over the Internet.  
         [0063]    While the foregoing description and drawings represent the presently preferred embodiments of the invention, it should be understood that those skilled in the art will be able to make changes and modifications to those embodiments without departing from the teachings of the invention and the scope of the claims.  
         [0064]    For example, it is the processing center  14  and the manner in which it operates as an information traffic control that provides the advantages of this invention; and in particular, the advantage of enhanced security to the purchaser coupled with enhanced assurance of payment to the merchant.  
         [0065]    Accordingly, it would be possible in a system incorporating the key features of this invention to dispense with the reader for purchaser personal identification data (PPID) in the customer ordering terminal  20 . Although this would not be a preferred embodiment, it must be understood that the inventive concept subsumes such an embodiment.