POCKET TERMINAL, METHOD AND SYSTEM FOR SECURED BANKING TRANSACTIONS

Abstract: An improved portable banking terminal (9) operated off-line to randomize the encoding of instructions for secured transmission over unsecured communication channels (56) to an associated institution (31) which can decrypt the instruction without interacting with the terminal to acquire the randomizing data. Information stored in secured manner in the terminal (9) and at the institution (31) can be used to generate new encoding schemes for each transaction so that encoding patterns cannot be deciphered from unauthorized interception of successive sets of instructions.

Description: Funds are commonly transferred electronically between banking institutions using encrypted messages transmitted over secured communication channels. Numerous encoding schemes and interactive message procedures are known which can be used to substantially assure faithful transmission of unaltered funds-transfer messages between institutions. However, these funds-transfer schemes typically are inadequately secure to protect against unauthorized transfer instructions over voice-grade telephone lines, and are typically not suitable for use by a great many individuals having their own computer-based terminals. One known technique establishes a portable banking terminal, as described in the literature (see, for example, U. S. Patent Application Serial No. 514,011), and such technique then permits transfers and withdrawals between a banking institution and the portable terminal. The document EP-A-0 063 794 relates to a device for controling the identity of a user by utilizing a personal identification and a verification in combination with encrypting or decrpyting principles. A terminal and a station are connected by a communication system, which may use unsecured data channels. The terminal is provided with a central processing unit having a data memory, a scanner for reading data from a data card, an input device for the input of a personal identification information and an encrypting module. The encrypting module is adapted to encrypt or decrypt data from the data memory under control of the central processing unit. The station further comprises a central processing unit having a data memory and an encrypting module. The station is also provided with a comparator device for comparing the personal identification information and a personal verification information. Both kinds of information are transmitted from the terminal to the station. The encrypting procedure is carried out by encoding data of a verification feature and a key together with a network key and to form a temporary key and a message code. Personal data, the first encrypting message, the temporary key and the message code are further encrypted in the terminal, and this message is transmitted to a station via a communication system. The message received is decrypted in the station, features and verification information are compared, and a transaction is carried out upon favorable comparison. However, this known device and the known method are not reliably secured against altering information during transmitting it over the communication system or against unauthorized use of information during a later session. It is the object of the invention to improve the known method and device for securely communicating transaction information to an entity at one location from a user assigned to an identified terminal at a remote location using unsecured communication channels, so that altered information and unauthorized accessed during a later session can be recognized. This object is solved by the method according to claim 1 and the system according to claim 5. Preferred embodiments are mentioned in the respective subclaims. In accordance with the present invention, an improved security-encoded funds-transferring system, method and apparatus are provided which enable a user to transmit in secured manner selected funds-transfer instructions to a banking institution using unsecured communication channels such as telephone, mail, telegram and the like. Encrypted messages may be sent to the banking institution based upon internal key codes, personal identification numbers, and other unique inputs, and the banking institution may acknowledge the faithful reception of the unaltered, authorized instructions by returning an encrypted message that indicates favorable reception of, and action upon, the encrypted message originally transmitted. Figure 1 is a block diagram illustrating one embodiment of the portable terminal and bank terminal according to the present invention; and Figure 2 is a flow chart illustrating the operation of the present invention. Referring now to the pictorial block diagram of Figure 1, there is shown a portable terminal 9 which includes a microprocessor 24 centrally connected to operate with a keyboard 19, a display unit 18, a D ata E ncryption S tandard encoder/decoder 26, and memory means 27 and 29. The terminal 9 may include optional connector 20 for attachment to voice-grade telephone communication channels 56 via a conventional, modular four-wire telephone connector. Alternatively, an unsecured communication channel 56 may simply transmit transaction information to a banking institution as mail or telephone data for manual entry. Additionally, the terminal 9 includes a random-number generator 10 which, of course, may be performed in conventional manner by the microprocessor-controlled 24 selection of feedback paths around successive logic cells of a shift register 29, as described in the literature. It is convenient to consider three phases of operation of the terminal 9. First, at the time of manufacture, each terminal 9 is provided with a unique T erminal I dentification C ode ("TIC", herein) established in known manner (for example, using E lectronically P rogrammable R ead- O nly M emory, "EPROM", herein) and stored in memory means 27. This terminal identification number or code can be accessed in the operating routine of the terminal 9 without direct control or intervention by a user. Second, the banking institution which furnishes the portable banking terminal 9 has a S ecurity- I nitialization U nit 31 ("SIU", herein) that couples to a terminal 9 via connectors 20, as shown in Figure 1, for permanently and irretrievably injecting an encrypted message (a K ey- E xchange K ey, "KEK", herein) into the memory means 27 of the terminal 9. This may be accomplished under control of the microprocessor 33 which operates in master/controller relationship to microprocessor 24 of terminal 9 to introduce the KEK into the EPROM-type memory means 27. At the same time, the banking institution compiles a listing in memory 41 of all terminals 9, their terminal identification codes, the P ersonal I dentification N umber ("PIN", herein) for the assigned user, and the associated KEK for on-line operation, as later described. The listing by the bank may, of course, be encrypted in known manner using a secured bank key for enhanced security against unauthorized operations of the system by bank personnel. Third, a terminal 9 thus initialized with a Terminal Identification Code and a Key-Exchange Key may now be operated off-line by the assigned user, as illustrated in the flow diagram of Figure 2. The user A of the terminal 9 which was assigned to him in the initialization process now enters his PIN and his account number (#1) via keyboard 19, and activates the terminal 9 to encrypt these numbers in the DES module 26 under control of microprocessor 24 using an irreversible algorithm 30 of the type described in the literature (see, for example, U. S. Patent 3,938,091) to produce a P ersonal V erification N umber 42. The PVN is now encrypted in the DES module 26 with the KEK (which was previously injected into the memory means of the terminal 9) and a random number 48 that is generated 10 by the terminal 9 in the manner previously described. The resulting encrypted code word 44 is the W orking K ey₁. In addition, the PVN and the KEK are again encrypted in the DES module 26 (without the random number 48) to produce an encrypted code word 46 as W orking K ey₂. Now the user A may identify the number of the account (#2) to which he desires to have funds transferred (in one embodiment, the terminal 9 may be regarded as having an account number separate from the account at the banking institution). In addition, User A enters the number of dollars to be transferred from account #1 to account #2 and other sequential data such as date and time of the transaction (as a basis for securing against the same transaction being duplicated at a later time). This data is encrypted in DES module (26, 36) with WK₁ to yield a M essage A uthentication C ode ("MAC", herein) 52 which may include, say, the most-significant 32 bits of a 64-bit output code. This MAC 52 is therefore unique for User A and his PIN, the TIC of terminal 9, the account number₁ of User A, the account number₂ (to which transfer is to be made), the dollars to be transferred, the random number generated by the terminal 9, and the date and time of the transaction. The terminal 9 now encrypts the MAC plus the random number 48 (as previously generated) with the WK₂ in the DES module 26 to produce an output code 54 which may comprise a 64-bit number. Note that the banking institution was not required to be in contact with terminal 9 to produce the output code 54 for this transaction. The transaction may now be communicated 56 to the banking institution by optional means such as telephone, mail, telegram, etc., without security constraints imposed upon the communication. User A thus transmits 56 to the banking institution his Terminal Identification Code, the account number₁, the account number₂, the dollars to be transferred between such accounts, the date and time, and the output code 54. This transmission 56 may be accomplished in clear text since unauthorized interception of the transmission will not yield useful information. Alternatively, this transmission to the banking institution may be suitably encoded for transmission with enhanced security. At the banking institution, the TIC is retrieved from the transmitted data and is compared in the bank list 8 for the corresponding KEK for that terminal 9. The account number₁ is compared with the bank list 8 for the corresponding PIN of User A (which, of course, with the corresponding account number₁ may be encrypted by the same irreversible algorithm 30 to yield PVN). The banking institution may now encrypt 40 the KEK and PVN accessed from the bank list 8 for User A in a DES module in accordance with the same encryption scheme 32 previously used in terminal 9 in order to produce the corresponding WK₂. Then, the 64-bit output code 54 retrieved from the information communicated to the banking institution is decrypted 60 using WK₂ and a decryption scheme which corresponds to the encryption scheme 51 to produce the corresponding MAC and random number previously generated in terminal 9. Next, the banking institution can encrypt 58 in a DES module the random number, the PVN and the KEK using the same encryption scheme 34 previously used in terminal 9 to produce a corresponding WK₁. The banking institution now has all the corresponding entries and can encrypt 61 in a DES module according to the encryption scheme 36 previously used in terminal 9 the resulting WK₁, the account number₁, the account number₂, the dollars to be transferred, and the date and time data was retrieved from the communication 56. This encryption 61 produces the corresponding MAC that is unique with respect to (a) the KEK, the PIN (or PVN) and the account number₁ listed for User A, and with respect to (b) the output code, the TIC, the account number₁, the account number₂, the dollars to be transferred, and the date and time information retrieved from the communication 56 was received at the banking institution. If all of these elements of the transaction are received unaltered, then the MAC from encryption scheme 61 and the MAC from decryption scheme 60 should compare favorably 65. If any element of the transaction is altered, either because of erroneous transmission and reception or because of unauthorized alterations, or the like, then the two MAC signals will differ and the transaction will be aborted by the banking institution. Upon favorable comparison 65, the banking institution may then perform diverse data checks 67 for such details as balance in account number₁, date and time of transaction used before, frequency of transactions, transaction limits, and the like before completing the requested transaction. If a confirmation of the completed transaction is desired, a return message or indication may be provided in a number of different ways. For example, a portion of the MAC, say, the 20 least-significant bits thereof may be segregated and transmitted 70 back to User A by any suitable, unsecured communication means. Transactions which are to be aborted for unfavorable comparison of MAC's, or for unacceptable data checks, or the like, may simply serve to shift the segregated bits of the MAC that are returned to User A. The User A may enter the received message into his terminal 9 where it will be compared 72 with the fixed corresponding portion of the MAC 52 originally generated. Favorable comparison at terminal 9 would therefore constitute indication that all message elements were acceptable, were properly transmitted, received and were acted upon by the banking institution. Unfavorable comparison 72 due, for example, to comparison of one portion of the MAC of terminal 9 with a shifted (other) portion of the MAC from the banking institution would provide indication that some element of the proposed transaction was unacceptable, or improperly transmitted or received and therefore not acted upon by the banking institution. It should be understood that, as used herein, "banking institution" includes any depositary of units or elements such as parts in inventory, dollars on deposit, and the like. Also, it should be understood that other transaction codes such as limit the account, stop payment order, or the like, may be used in place of specifying transfer to another account number (or name). Also, it should be understood that temporary registers in memory means may be used in conventional manner to store the resulting codes developed by successive encryption procedures in order to facilitate serial operation of one DES module 26 on successive sets of input codes and keys. Therefore, the present invention facilitates the off-line operation of a portable terminal to provide randomly-coded, secured instructions over unsecured communication channels to an associated institution. The institution can perform security checks on the basis of stored information without the need for interaction with the terminal, and can respond to the instructions without directly requesting the randomizing data. Additional features of the present invention provide secured return messages which can be transmitted over unsecured communication channels to the terminal for entry and detection therein as confirmation of transmission, reception and implementation of the secured instructions.

Claims: Method of securely communicating transaction information to an entity at one location from a user assigned to an identified terminal at a remote location using unsecured communication channels, with the steps of a) storing a key code (KEK) in the terminal; b) storing in the entity the key code (KEK)and data regarding the user and the terminal (PIN, PVN, TIC, ACCOUNT NO.); c) generating a random number (RN) in the terminal; characterized by the steps of d) forming a first encoding key (WK₁) and a second encoding key in the terminal, said first encoding (WK₁) key being the first logical encoding combination of the random number (RN), and the stored key code (KEK) and data regarding the user (PVN), and the second encoding key (WK₂) being the second logical encoding combination of the stored key code (KEK) and data regarding the user (PVN); e) encoding in the terminal the transaction information (ACCT #1, ACCT #2, DOLLARS, DATE/TIME) and the first encoding key (WK₁) containing the data regarding the user (PVN) in accordance with a third logical encoding combination thereof to form a message authentication code (MAC); f) encrypting in the terminal a message authentication code (MAC) and the random number (RN) and the second encoding key(WK₂) in accordance with a fourth logical encoding combination thereof to form an output code; g) communicating the output code and transaction information (ACCT #1, ACCT #2, DOLLARS, DATE/TIME) and terminal identity (TIC) to the entity; h) accessing the storage in the entity in response to received terminal identity to provide the key code associated there with (KEK) and the data regarding the user (PVN) assigned thereto; i) forming a second encoding key (WK₂) in the entity as said logical encoding combination of the accessed key code (KEK) stored in the entity and the accessed data regarding the user (PVN); j) decrypting in the entity the received output code and said second encoding key (WK₂) in accordance with said fourth logical encoding combination to provide the message authentication code (MAC) and the random number (RN); k) encoding in the entity said random number and said key code (KEK) and said data regarding the user (PVN) stored therein in accordance with said first logical encoding combination to form a first encoding key (WK₁); l) encoding in the entity the transaction information (ACCT #1, ACCT #2, DOLLARS, DATE/TIME) and the first encoding key (WK₁) containing the data regarding the user (PVN) in accordance with a third logical encoding combination thereof to form a message authentication code (MAC). m) comparing in the entity said decrypted message authentication code (MAC) and said encoded message authentication code (MAC) for producing in response to favorable comparison thereof an output indication of unaltered receipt of transaction information from an authorized user of the identified terminal. The method according to claim 1, characterized by the additional steps of: transmitting a selected portion of the message authentication code in the entity to the terminal at the remote location in response to said output indication; and comparing in the terminal the corresponding selected portion of the message authentication code produced therein with the selected portion of message authentication code received at the remote location to provide an indication thereat of unaltered receipt of transaction information at the entity. The method of claim 1 or 2, characterized by the step of storing in the terminal and in the entity a terminal identification code for identifying the terminal assigned to the user at the remote location. The method according to one of claim 1 to 3, characterized in that the steps of encoding and encrypting according to the first, second, third and fourth logical encoding combinations of the respective data,codes, numbers and keys are performed in selected sequence in the terminal, and the respective keys and codes formed thereby are stored in the terminal. System for securely communicating transaction information to an entity at one location from a user assigned to an identified terminal at a remote location, comprising: first storage means (27) in the terminal (9) for storing a key code at an accessible location therein; second storage means (41) in the entity for storing at accessible locations therein the key code and data regarding the user and the terminal; means (10) in the terminal (9) for generating a random number (48); encryption means (32,34,36,51) in the terminal operable to encode signals applied thereto according to selected logical encoding combinations thereof characterized in that said encryption means (32,34,36,51) are adapted for selectively: a) encoding (at 34) said key code,said random number and data indicative of the assigned user in accordance with a first logical encoding combination thereof to produce a first working key signal (WK₁(44)); b) encoding (at 32) said key code and said data indicative of the assigned user in accordance with a second logical encoding combination thereof to produce a second working key signal (WK₂(46)); c) encoding (at 36) said first working key signal, data indicative of the assigned user, and transaction information in accordance with a third logical encoding combination thereof to produce a message authentication code (MAC 52); and d) encoding (at 51) said random number (RN), said second working key signal and said message authentication code in accordance with a fourth logical encoding combination thereof to produce an output code (54) for communicating to said entity with the transaction information and terminal identity; means coupled to the second storage means in said entity for accessing the stored key and the data indicative of the assigned user in response to identity of the terminal; encoding/decoding means (40,58,60,61) in the entity operable to encode/decode signals applied thereto according to selected logical encoding/decoding combinations thereof for selectively: e) encoding (at 40) the accessed key code and data indicative of the assigned user in accordance with said second logical encoding combination thereof to produce a second working key signal (WK₂); f) decoding (at 60) the received output code and said second working key signal in accordance with said fourth logical encoding combination to produce said random number and said message authentication code; g) encoding (at 58) said accessed key code and data indicative of the assigned user and said decoded random number in accordance with said first logical encoding combination thereof to produce said first working key signal (WK₁); and h) encoding (at 61) the received transaction information and said first working key signal and the data indicative of the assigned user in accordance with said third logical encoding combination thereof to produce a message authentication code; and comparator means (65) in said entity for comparing said decoded message authentication code and said encoded message authentication code for producing in response to favorable comparison thereof an output indication of unaltered receipt of transaction information from an authorized user of the identified terminal. The system according to claim 5, characterized by means in the entity for providing to the terminal at the remote location a portion of a message authentication code produced at the entity; and means in the terminal for comparing a selected portion of the message authentication code produced in the terminal with the portion of message authentication code received from the entity for producing an output indication of unaltered transmission and receipt of transaction information at the entity.

Inventors: ATALLA, MARTIN M.
Applicants: ATALLA CORPORATION
Application year: 1984
Main classification: G07F7
IPC codes: G06Q40, H04L9, G07D9, G07F7