Patent Publication Number: US-2007100752-A1

Title: Systems and methods for secure financial transaction authorization

Description:
CROSS-REFERENCE TO RELATED APPLICATION  
      This application claims the priority benefit of U.S. Provisional Application No. 60/724049, filed on Oct. 6, 2005, which is incorporated herein by reference. 
    
    
     BACKGROUND OF INVENTION  
      1. Field of the Invention  
      This invention relates to the business practice and processes related to secure point of sale transaction authorization, secure party-to-party financial transaction authorization and secure internet financial transactions.  
      2. Background and Description of the Related Art  
      For as long as people have conducted commerce, some number of individuals has engaged in some form of financial fraud, thus taking advantage of the existing financial systems. Financial fraud in this context includes currency counterfeit, credentials counterfeit, authorization fraud and identity theft.  
      While the methods of authentication and authorization have undergone various forms of progress over the centuries, the current popular practices are easily defeated. Currency counterfeit and credit card fraud cost the domestic financial industries billions of dollars a year and stifle credit availability in developing economies.  
      The credit card industry initially relied on a credential based system to provide authentication; that is, each account had an associated account number, expiration date, and account name. With that information, and that information alone, a transaction could be initiated. Fraud can easily arise from such a system because the full set of account credentials are always presented for every purchase. The more popular such a system becomes, the more available these full credential sets become and the more opportunity there is for fraud. The credit industry has kept up a vigorous battle against perpetrators; however, enforcement relied on aspects of civil and law enforcement infrastructure that are weak or absent outside of first world economies. Additionally, with the introduction of Internet-based commerce, enforcement is difficult to scale in proportion to the amount of fraud possible on line; there simply are not enough human agents to keep up with the scale of the problem.  
      Additional strategies have been employed such as imprinting an image of the cardholder on the physical credit card. This has limited utility since it requires a physical examination of the credit card by a store employee who might not be paying attention at the time of purchase; furthermore, this strategy has no value for on line purchases.  
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
      A better understanding of the present invention can be obtained from the following detailed description in conjunction with the following drawings, in which:  
       FIG. 1  illustrates current practice of conducting an in-person point of sale financial transaction using a credit or debit card.  
       FIG. 2  illustrates the concept of multi-layer security in a secure financial transaction.  
       FIGS. 3, 4 ,  5 , and  6  illustrates a description of how a secure transaction can be carried out using the multi-layer security.  FIGS. 3, 4 ,  5 , and  6  represents a continuous flow diagram which has been broken up in four pieces for the purpose of ease of display. 
    
    
      The figures are provided in order to provide a thorough understanding of the present invention. The figures should not be construed as limiting the breath of the invention in any manner.  
     DETAILED DESCRIPTION  
      Current System Of Authorization  
       FIG. 1  illustrates a conventional retail transaction using a credit card or debit card. An account holder  1001 , being physically present in the retail shop  1005 , initiates a transaction presenting their account card  1003 . A check out system  1006  may be employed to determine the total amount of the pending transaction, communicating the amount to the point of sales terminal  1009  via some communications means  1008 . The point of sale terminal  1009  is used to read the account information  1002 , typically via a card swipe  1004 , from the account card  1003  and to conduct a secure transaction request  1010  with the transaction clearing system  1012 . The account information  1002 , a static set of data such as account number, expiration date, etc. is used as the only credential necessary to conduct the transaction. The store clerk  1007  may be called upon to verify a signature or photo, but relying on human diligence as a link in the authentication process has historically proven very weak for a number of reasons that are difficult or impossible to rectify. Before a transaction can complete, the transaction clearing system sends a transaction approval (or rejection)  1011  to the point of sale terminal  1009 , notifying the store clerk  1007  to accept the payment (or reject it).  
      A number of variations are possible from this transaction authorization model; for example, a purchase transaction may be conducted through an internet web site. An internet purchase closely resembles the retail purchase outlined above in that the user account information, a static credential, is the only information unique to the account holder required to initiate a transaction.  
      Fraud may easily arise in this model because the store clerk has limited means or motivation to accurately validate that the account card actually belongs to the account holder. Furthermore, the actual account holder may engage in fraud by attempting to repudiate a purchase they actually did make.  
      The underlying property of existing consumer and small company credit and debit instruments is that they all rely on a system of easily obtained static credentials; your credit card number, your name, the account&#39;s expiration date, suffix digits printed only on the back of the card, etc. This static credential property is also the fundamental security flaw in the system; authentication is weak and transaction authorization is therefore equally weak. The static credential means a transaction may be conducted at any time, and without the conscious involvement of the account holder. Furthermore, a perpetrator may obtain access to a huge number of accounts or deploy an automated means to conduct the transactions at arm&#39;s length or even offshore, making a successfully forensic investigation nearly impossible.  
      While numerous security means have been proposed, most of these proposed systems involve additional point of sale devices (limiting deployment rate and international acceptance) or methods viewed as intrusive to the user. To become a mainstream method of transaction authorization, the solution needs to be easy, convenient, non-intrusive, and it must not burden the consumer with additional devices. Finally, the solution must solve the very real technical security issues needed to substantially limit the possibility of fraud.  
      Multi-Layer Secure Transaction System  
      A procedure of involving computer system to be utilized with a mobile network to create a secure self-provisioned registration process that will enable creating a secure profile of users that can be subsequently used for logging into a network for transactions in a uncompromised manner. The computer system is to have computing power and capacity to handle six to seven thousand concurrent connections per second. A high-availability environment with automatic failover and failback methods.  
      A programming language such as C++, Java (or similar industry standard programming languages) is to be used to program the computing system to generate various codes such as SCK, UPK, and TAK (described later in this document). The computer system will be coupled to each other using internet or a private network. A standard security protocol (such as VPN etc.) may be employed to secure the network.  
      The computers will also be programmed to exchange data among themselves as well as communicating with third party service provider computing systems such as bank&#39;s computers, merchant&#39;s computers.  
       FIG. 2  (continued in  FIGS. 3, 4 , and  5 ) illustrates a multi-layer secure financial transition system. Under the system, level I security is provided by providing the user  2001 , a user PIN key (UPK) or a password. The user of the financial transaction keeps this key in her/his memory or keeps it at a secure place.  
      Level II security  2005  comprises confirming that the user  2001  has a cell phone  2000  with him/her during the check out time at the register  2002 , or during check out after internet purchase. The cell phone  2000  is registered with the transaction processing entity and calls to complete the transaction are accepted only from this registered number. This security level may not be necessary for internet transactions.  
      Level III security  2003  comprises confirming transaction location by checking if the registered phone  2000  is in the store at the time of the checkout process. The geographical location may be calculated using the geographical id/co-ordinates provided by the cell phone service provider. This security level may not be necessary for internet transactions.  
      Level IV security  2004  comprises ensuring the user is at the checkout register  2002 . A security code is generated or displayed by the checkout register  2002 ; this number is then entered into the phone. Alternatively, a code may be displayed by the phone and is then entered into the point of sale checkout register  2002 .  
      As illustrated in  FIG. 3 , a point of sale financial transaction starts when a buyer finishes shopping  3001  either in store or over internet  3002 . In store, the buyer approaches the checkout register  3003 ; where the buyer is asked  3005  for the method of payment. The buyer decides to conduct the transaction though credit card  3007  or by cash  3009 . In either of those two selected methods the transaction ends with  3008  for credit card payment or  3010  for cash transaction.  
      If he/she chooses to pay by phone  3011  securely, he/she is asked  3018  if he/she has a card containing their mobile id. If a mobile id card is present  3019  then the customer is asked to provide the card to the cashier for swiping else the customer can enter the mobile id number  3017  directly onto the point of sale terminal. In either case the mobile server is contacted by the point of sale device  3020 .  
      The mobile server determines the transaction type  3021 . First level of security is performed and verification is send to the MART (Mobill Authorization Transaction Request)  3022 . Mart calls the user  3023 / 4000 . User picks up the mobile phone and enters the User Pin Key (UPK)  4001 . If a geographical check only is required  4002  then a E911 match  4003  is performed to locate call location to card location. If callee and the card in the same location  4004 , then the fraud call ends  4005 .  
      If no geographical check is required  4006 , then check for validity of the UPK. If UPK is incorrect then fraud call ends with a failure  4005 . If the UPK is correct then a test for a second level of security check requirement is done  4009 . If the check is not required then mobile server approves UPK if correct  4011 . The transaction detail is approved  4012  and the call ends  4013 .  
      If second level check for Internet is required then create a one time code  4007 , which can be passed over the phone or via the Internet  5001 . If over the phone then play the Transaction Authorization Key (TAK) on the phone  5002 , a second level location and security match is done  5003 . User enters the TAK onto the website within the provided timeframe  5004  and the mobile server verifies the TAK  5005 , say the transaction details  5006  and end the call  5007 . If the code is passed over the Internet  5001 , then display Secure Cash Key (SCK) as image on website  5008 . Secure Cash Key (SCK) is a authorization key with a limited expiration duration to complete a transaction. If the transaction is not completed within the expiration duration of the SCK, SCK automatically become invalid. A second level security and location match is performed  5009 . User sees SCK and enters it on phone  5010 . Mobile server verifies SCK  5011 , says the transaction details and says call approved  5012 . Call ends  5007 / 5013 . Mobile server contacts bank  5014 . Mobile server gets financial approval  6001  and contacts bank server with transaction details  6002 . If approved by bank server  6003  then send approval message  6005  or send denial  6004 .  
      If second level check for store  4009  then create a one time code for store  4010 , which can be passed over the phone or via the Internet  4014 . If over the phone then play the Transaction Authorization Key (TAK) on the phone  4015 , a second level location and security match is done  4016 . Similar to SCK, TAK is also has short life span. If the transaction is not completed within this life span, TAK expires. User enters the TAK onto the website within the provided timeframe  4017  and the mobile server verifies the TAK  4018 , say the transaction details  4019  and end the call  4020 . If the code is passed over the Internet  4023 . A second level security and location match is performed  4024 . User sees SCK and enters it on phone  4025 . Mobile server verifies SCK  4026 , says the transaction details and says call approved  4027 . Call ends  4020 / 4027 .  
      Mobile server contacts bank  4021 . Mobile server gets financial approval  6001  and contacts bank server with transaction details  6002 . If approved by bank server  6003  then send approval message  6005  or send denial  6004 .  
      A computing system is programmed to generate a unique PUK, SAK and TAK on demand based on the identity profile of a user. This system is also programmed to match the various numbers entered by the users and Point of Sale operators with the system generated numbers for identity and authorization checking purpose. Furthermore, the computing system is programmed to send and receive various messages from/to users, Point of Sale operators, and other computers participating in the authorization of the transaction and processing of the payment, including but not limited to, crediting merchants&#39; account and debiting users&#39; account when the transaction is successful.  
      A procedure of involving computer system to be utilized with a mobile network to create a secure self-provisioned registration process that will enable creating a secure profile of users that can be subsequently used for logging into a network for transactions in a uncompromised manner. The computer system will be an x86 architecture based PC with computing power and capacity to handle six to seven thousand concurrent connections per second. A high-availability environment with automatic failover and failback methods would be devised into the system.