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 customer credit card and debit card information 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 identification numbers.

Description:
BACKGROUND OF THE INVENTION  
         [0001]    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.  
           [0002]    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 partially on the cardholder and the balance on the credit card company. Current regulations put a debit cardholder at great risk. The entire balance in the bank of a debit card holder may be at risk.  
           [0003]    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, 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.  
           [0004]    Accordingly, a major purpose of this invention is to provide a secure marketing system for purchase cards such as credit cards or debit cards.  
           [0005]    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  
         [0006]    In brief, the embodiment illustrated is a secured purchase card 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 to obtain the card number and also a keyboard or the like to permit entering a purchase or identification number (PIN). At each customer ordering terminal, there is an encryption module which encrypts the swiped purchase card number as well as the PIN number. This encrypted information together with the customer ordering information identifying a merchant and a product is sent over the Internet to a processing center.  
           [0007]    At the processing center, the debit or credit payment capability is confirmed in a standard fashion with appropriate banks 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 also prepares a purchase verification notice to the customer which is sent over the Internet to the customer originating the order. Where debit cards 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  
       [0008]    [0008]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.  
         [0009]    [0009]FIG. 2 is a block flow diagram illustrating the system of this invention in relationship to a particular customer ordering from a particular merchant.  
         [0010]    [0010]FIG. 3 is a block diagram of a typical customer ordering station.  
     
    
     DESCRIPTION OF THE PREFERRED EMBODIMENTS  
       [0011]    [0011]FIG. 1 illustrates the system of this invention in which a plurality of customers have encryption terminals  10  such as terminals  1 ,  2  . . . N.  
         [0012]    In addition, there are a plurality of merchant stations  12  represented by the merchant stations  1 ,  2  . . . N.  
         [0013]    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 the security and assurance of payment functions between a plurality of customers and a plurality of merchants.  
         [0014]    Essentially, any one of the customers  10  sends an order over the Internet together with an appropriately encrypted debit card or credit card number with, where required, an appropriately encrypted personal identification number (PIN). 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, 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 .  
         [0015]    Once the credit information or debit information has been confirmed, the processing center  14  then sends an appropriate statement to the designated merchant  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.  
         [0016]    It is worth noting that none of the merchant stations receive the credit card number or debit card number or PIN number nor even the encryption of those numbers.  
         [0017]    With more specific reference to FIG. 2, each customer ordering terminal  20  has a card swipe to accept either a credit card or a debit card identification and also has a keyboard or the like for the entering of a personal identification number (PIN). At each customer ordering terminal  20  there is an encryption module  24  that is used to encrypt the card identification and the PIN number where such is required.  
         [0018]    As used herein, the term “purchase card” will refer to either a credit card or to a debit card.  
         [0019]    When the purchase card is a credit card, the credit card number will be swiped through the customer ordering terminal  20  and that number will be encrypted by the module  24 .  
         [0020]    Where the purchase card is a debit card, the customer ordering terminal swipe will detect the debit card number and the customer ordering terminal will have a keyboard or other similar means for the debit card owner to insert their personal identification number (PIN). In that case, the encryption module  24  will encrypt both the debit card identification number and the PIN.  
         [0021]    The customer ordering terminal after encryption of the credit identification numbers sends out the ordering information on the Internet as indicated at  26 ; which ordering information includes the encrypted purchase card identification and PIN number, where required. This ordering information is received at a processing center  28 . The processing center  28  includes a decryption module  30  for decrypting the encrypted card number and PIN number.  
         [0022]    The processing center  28  then 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 the credit available for a credit card. The processing center  28  then receives confirmation from the bank or the credit station.  
         [0023]    After the processing center  28  receives the bank or credit confirmation, the processing center generates a purchase verification to the customer indicated at  32  which is sent over the Internet to the customer. The processing center also generates a purchase order and report to the merchant as indicated at stage  34  which is sent to the designated merchant station  36 . The report to the merchant provides the merchant with two essential types of information.  
         [0024]    The first is an identification of the customer and of the item or service being ordered.  
         [0025]    The second is verification of a bank payment to cover a debit card or credit availability to cover a credit card.  
         [0026]    The processing center  28  may also provide a financial holding center  38  in which the amounts being transferred by a debit card from a bank for a merchant may be held for the merchant.  
         [0027]    The stage where the processing center  28  makes inquiry, to determine if debit card 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 processing. It might be noted that there is a 48 hour hold put on the transfer of debit card funds.  
         [0028]    As shown in FIG. 3, the customer encryption terminal  10 , in one embodiment, essentially involves a PC keyboard  40  and a card reader  42 , both of which provide inputs to an encryption module  44 . The output of the encryption module  44  is applied to a personal computer (PC)  46 . In the embodiment illustrated, the encryption module  44  will have to provide pass through capability for the keyboard input to the PC. In that embodiment, the encryption module 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  44  and card 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.  
         [0029]    A standard card reader is preferred for reasons of economy and performance. The encryption module itself can employ any one of a number of known encryption algorithms appropriate to the level of security desired for the system.  
         [0030]    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.  
         [0031]    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 , center  14  and stations  12  and thus are not described in any detail herein.  
         [0032]    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 purchase card identification. As a consequence of enhanced customer purchase card security, debit card transactions are facilitated or encouraged and merchants may find enhanced value in Internet transactions.