Patent Publication Number: US-6341724-B2

Title: Cardless payment system

Description:
This application is a continuation of application Ser. No. 09/307,597, filed May 10, 1999 now U.S. Pat. No. 6,227,447. 
    
    
     FIELD OF THE INVENTION 
     This invention relates generally to a system and method for assigning an alias, such as a phone number and a Personal Identification Number (“PIN”), to a credit card so as to eliminate the need for the physical presence of the card during a transaction. 
     BACKGROUND OF THE INVENTION 
     There are literally thousands of different credit cards available. Some provide frequent flier miles, others give you free gas. Still other credit cards offer low interest rates and even insurance for your purchases. Out of all the credit cards that exist, none of them offer the ability to go to a store and make purchases without the actual card. While it is possible to place an order over the phone to a catalog company, it is still generally required to have the card in your hand to read the card number to the sales person and provide some additional information such as the expiration date. Perhaps a trivial number of people have memorized their credit card number and expiration date, but most people have yet to commit these seldom used 20-digits to memory. 
     Additionally, those with an active lifestyle will find it burdensome to carry many credit cards with them during their everyday lives. The risk of losing one&#39;s wallet or purse, or having it stolen is an ongoing problem. The replacement process for most credit cards is long and burdensome. If a credit card is stolen and unauthorized charges are discovered on the account, the process to rectify the situation is both time consuming and exhausting, often involving sworn affidavits by the cardmember. 
     These and other drawbacks of current credit cards exist. 
     SUMMARY OF THE INVENTION 
     An object of the present invention is to overcome the drawbacks of existing credit cards. 
     Another object of the present invention is to provide a system for assigning an alias for a cardholder&#39;s credit card number using an easy to remember number. 
     A further object of the present invention is a system and method for enabling a cardholder to use his or her credit card without actually having the card present at the time of purchase. This is accomplished by cross-linking the cardholder&#39;s phone number to the credit card number and providing the customer with a corresponding PIN that can be changed immediately upon receipt so that it is a number that the cardmember can easily remember. The PIN can also be selected by the cardmember from his or her home phone. As one method of authentication, the bank can verify the identity of the caller by their phone number using an Automatic Number Identification (“ANI”) system which ensures a secure registration of the PIN. The customer can then self-select the PIN he or she wishes to use. 
     These and other objects and advantages of the invention will be apparent from the detailed description of the preferred embodiments which follows. 
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS 
     FIG. 1 shows a flow charts for a method of use according to one embodiment of the present invention according to one embodiment of the invention. 
     FIG. 2A and 2B show a flow chart of one embodiment of the present invention. 
     FIGS. 3A and 3B show a flow charts for the selection of a PIN according to one embodiment of the present invention. 
     FIGS. 4A and 4B show a flow chart for the selection of a PIN according to one embodiment of the present invention. Embodiments of the invention may include some or all of the various components as described below. 
    
    
     DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS 
     FIG. 1 shows one example of a cardholder transaction according to the present invention. In FIG. 1, a credit card purchase is commenced at any given point of purchase location, step  10 . A point of purchase location is any location where it is possible to make a purchase using a credit card. For example, any store that accepts credit cards would be a point of purchase location. Any telephone can be considered a point of purchase location since it is possible to telephone a company, such as a catalog company, and place a credit card order over the phone. Instead of providing the merchant with the credit card for payment, or in the case of a telephone order providing the card number and expiration date, the cardmember will enter the cardmember&#39;s ten-digit home telephone number and PIN into a device similar to the credit card readers in use today, step  12 . 
     This device will connect to a database, perhaps the database already maintained by the telephone company, step  14 , and it will check for authenticity. Alternatively, the credit card company may have their own database which includes all the appropriate information and can verify the cardholder and process the transaction with the appropriate card, step  16 . 
     The validation process should be fairly quick and will then retrieve the credit card linked to the phone number and PIN the cardmember has provided. After validation has succeeded, the credit card will be charged and the merchant will receive notice of this validation, step  18 . The cardmember must then sign some sort of receipt or authorization slip and the transaction is complete, step  20 . 
     This entire process is very similar to current day credit card transactions with the exception that instead of providing a plastic card, the cardmember need only enter their ten-digit phone number and PIN. The above embodiment requires a special “keypad” for use by customers so they can enter their phone number and PIN discreetly. Alternatively, the customer can provide the ten-digit number and PIN directly to the merchant. 
     FIGS. 2A and 2B show a similar transaction between a cardmember and a merchant conducted over a telephone. In FIG. 2A, a cardmember initiates a transaction by calling a merchant over the telephone in step  22 . After identifying the item to be purchased, the cardmember authorizes his card to be charged by providing the representative with his ten-digit telephone number. Alternatively, the merchant may use an ANI to determine the telephone number of the caller, step  24 . This is useful in situations where the cardmember is calling from their home and provides an added measure of security to make sure the authorized cardmember is the one placing the order. 
     The transaction is continued and the card number received by the merchant is verified using the cardmember&#39;s PIN. In step  26 , the cardmember provides the PIN to the merchant. This can be done by having the cardmember punch in the PIN on the telephone key pad or verbally indicating the PIN to the merchant. The ten-digit number and PIN are verified by the merchant in step  30 . The verification process is similar to that used to verified original credit card numbers and expiration dates. Once the number has been verified, the merchant processes the transaction and the credit card is charged in step  32 . After the credit card has been charged, the transaction is completed, step  34 . 
     Assigning an alias and selecting a PIN are relatively easy processes. FIGS. 3A and 3B show the activation and assignment process for a current cardmember. A current cardmember is a person that already has a credit card account with the credit card company and is merely calling to activate their alias and select a PIN. The activation process is initiated in step  26  when a current card member receives the offer from the credit card company to activate the alias. This offer can be received by mail, e-mail, telephone, or any number of ways. If the offer was received by any means other than a telephone call, the cardmember must call the credit card company for activation, step  38 . When the call is received by the credit card company, the caller&#39;s telephone number is automatically identified by an ANI system, step  40 . 
     By determining the telephone number of the caller, the credit card company can determine the caller&#39;s identity and account number. This can be done by asking the caller for his account number or, preferably, by having the system automatically retrieve the cardmember&#39;s account information based on the telephone number as shown in step  42 . In step  44 , the cardmember selects a PIN to be used with his telephone number alias. Alternatively, the credit card company can assign a PIN randomly. The activation process is completed in step  46  when a credit card company mainly assigns a PIN to the card member&#39;s account and updates a record or the system performs this function automatically. 
     The activation process can be totally automated as well. For example, a current cardmember would receive the offer in the mail including a telephone number the cardmember to call for activation. The cardmember would then call the designated number. The credit card company could then automatically determine the cardmember&#39;s telephone number using an ANI and present the cardmember with a pre-recorded menu of options. By using these options the cardmember would be able to request activation of the alias and select a PIN number using the telephone key pad. Registration is then completed by having the system automatically update the cardmember&#39;s account and records with the alias and the selected PIN. 
     The activation and registration process can also be utilized by a new cardmember. As shown in FIGS. 4A and 4B, a new member would receive a credit card offer with an option to assign an alias to the new account, step  48 . The person can accept this offer and apply for the credit card and alias by calling a designated number for activation, step  50 . In step  52 , the credit card company can use an ANI to determine the caller&#39;s telephone number. Alternatively, a customer service representative can verbally obtain the information from the card member. In step  54 , the system would receive a file containing the caller&#39;s financial information and pre-approval status. This information can be used by a customer service representative or by the system automatically to activate a new account for the caller. Preferably, a customer service representative would obtain additional financial information and confirm existing information thus providing the credit card company with a more thorough screening process. 
     Approval for the new account can then be processed in step  56  and any updating can also be performed as well. At this time, the cardmember can also select a PIN as shown in step  58 . Alternatively, a PIN can be randomly assigned by the credit card company to the new account. Registration and activation process is completed in step  60  when the system assigns the PIN to the cardmember&#39;s account and updates the account accordingly. At this point, the system can activate the account or hold it pending approval of subsequent credit checks. 
     Consumers who have a plurality of credit cards have the option of selecting multiple PINs, each of which would correspond to a different credit card. When making a purchase, the cardholder need only provide the PIN corresponding to the card he or she wishes to charge the purchase on. 
     Security measures for the Cardless Payment System will be nearly the same as those used by credit cards. Credit cards themselves are not a secure system by definition. If a card is lost or stolen, misuse of the credit card is quite possible. The same systems used to handle fraud for credit cards will be used to handle the present invention. No new security issues exist with the Cardless Payment System beyond the current ones faced by credit cards today. In fact, perhaps even less security issues exist with the Cardless Payment System due to the fact that no credit card is being carried around by the cardmember and thus the chances of having the credit card lost or stolen is significantly reduced. If the cardmember decides to destroy the plastic card and rely solely on the Cardless Payment System then the chances of the card being lost or stolen are practically zero. 
     The registration process for the Cardless Payment System is also unique. Using home phone numbers as the credit card alias, a database will be used to store the matching information so as to determine which phone numbers go with which credit cards. The process involves keeping this data is a database such as the telephone company&#39;s current database. Telephone companies already have databases with consumer&#39;s phone numbers stored. Linking the telephone number within the database to a credit card number would allow for a seamless integration of the two. 
     Additionally, once consumers have entered this number they can select multiple payment methods. For example, if a cardmember has two different credit cards and a debit card, after entering their ten-digit phone number and PIN they can choose which card to use for payment through some sort of self-selection menu. Alternatively, a single cardmember may have multiple PINs representing different credit cards. It would be possible to assign one PIN to their Visa card and another PIN to their Mastercard, both on the same phone number. 
     Uses include point of sale wherever there is a terminal where consumers can enter in a number. The invention is also applicable to card not present situations ordering a product by telephone, etc. This would allow the consumer to buy something without giving their credit card information over the phone. All they need to do is not in the PIN since the phone number is automatically detected over the phone by the merchant. This is added security since many people still do not like disclosing credit card numbers over the phone. 
     Other embodiments and uses of the invention will be apparent to those skilled in the art from consideration of the specification and practice of the invention disclosed herein. The specification and examples should be considered exemplary only. The intended scope of the invention is only limited by the claims appended hereto.