WO2003083792A2

WO2003083792A2 - Administration of transactions with pre-payment debit and credit cards

Info

Publication number: WO2003083792A2
Application number: PCT/GB2003/001292
Authority: WO
Inventors: Kevin Burrows
Original assignee: Burrows, Colin, Cyril
Priority date: 2002-03-28
Filing date: 2003-03-26
Publication date: 2003-10-09
Also published as: EP1497763A2; AU2003217029A8; WO2003083792A3; AU2003217029A1

Abstract

A method and card (10) for conducting commercial transactions comprising the steps of: providing a plurality of cards (10) each having a unique card identifier code and providing a database (15) of a plurality of anonymous electronic accounts each of which has a unique account code associated with one card (10). A supply of cards at card is provided to issuing outlets at which a potential card user may acquire a card and pay a sum of money or money's worth and thereby assign a pre-payment value to a unique selected card (10). Each issuing outlet (13) has a card reader/writer (14) that is connectable to the database (15). The card reader/writer (14) is operable to activate a card (10), and to write to a selected anonymous electronic account in the database that is unique to the activated card, (i) the card identifier code, (ii) the value of said pre-payment, (iii) a user personal identification code (master PIN) and (iv) a unique card issuer authentication code that identifies the card issuer. The card issuing outlets (13) have a payment means for effecting payment to the owner of the database (15) of a sum of money related to the pre-payment value of the activated card. The card user is given a plurality of disposable PINs that are written to the selected account in the database. The reader/writer means (17) at a plurality of vendor outlets (14, 18) where a card user can use the activated card (10) to purchase goods or services or effect other monetary transactions is operable for receiving from the database confirmation that the user entered master PIN, or the disposable PIN, matches that stored in the account corresponding to the activated card, and confirming that the value of the balance stored in the electronic account matches, or exceeds, the value of the transaction, and, if sufficient funds exist in the account to cover the value of the transaction, to deduct the value of the transaction from the account and write the new balance to the account.

Description

PRE-PAYMENT DEBIT AND CREDIT CARDS

This invention relates to a method of conducting transactions for money or money's worth, and in particular to a method that uses pre-payment credit and debit cards.

There is a need for a pre-payment credit card system that is acceptable for monetary transactions in relation to the purchase of goods or services and other commercial dealings at vendor outlets, and for use in conducting transactions over the telephone or over the Internet.

There is also a need for a card that is truly anonymous so that persons with a history of bad credit worthiness or unacceptable risks can acquire a credit card that does not discriminate against them because of their history of bad debt, and can be used without the vendor knowing about the card user's personal details or financial circumstances.

Furthermore such a card needs to be secure so that transactions over the Internet or over the telephone cannot identify the card owner, or breach the card owner's bank account or credit card account details.

An object of the present invention is that the pre-payment system of the present invention is completely separate from any other bank or credit card accounts owned by the card user and cannot be linked to them and cannot identify the card user.

One of the growing markets for purchasers of goods and services is that of teenagers who are too young to be granted a conventional credit card but represent a valuable and growing sector of the purchasing public. The present invention aims to provide a card that can be topped up by parents so that teenagers and minors can use the card as if it were a regular credit card. Vendors accepting the pre-payment card are assured of being paid at the time of the transaction and not having to wait for the transaction to clear.

It is known to provide pre-payment cards for use in purchasing mobile telephone time on pay-as-you-go schemes. All such cards are restricted to being used only once and can only be used to pay in advance for telephone use. The telephone line has to be activated by telephoning the service provider with details of the pre-payment card and this value is then assigned to an account that is uniquely locked to the SIM card (telephone number) and thus theoretically traceable to the personal details of the original owner of the SIM card. Once the card is activated it is thrown away and cannot be topped up. Furthermore, the cards have an in-built value before activation, and if lost or stolen before activation are worth the face value of the card in telephone time. In the main, it is difficult to track down illicit or stolen cards, so such cards have a re-saleable value to thieves.

US Patent No.6, 173,269 discloses a pre-payment card scheme for use by teenagers. The scheme is very complicated and requires knowledge of the bank accounts owned by the card user or the card user's parents so that payments can be transferred from a bank account to top-up the prepayment account. The teenager or parent cannot top-up the value of the card without either visiting the bank or arranging transfer of funds from the bank to the prepayment card account.

If the teenager or the teenager's parents or guardian are not creditworthy, do not have a bank account from which to transfer funds, or have a history of bad debt, the card issuer will decline issuing a card. Such a card system is not truly anonymous and cannot be topped up other than by visiting the bank or making bank transfers from a normal bank account. Published US patent application 2001/0034725 discloses an Internet pre-payment scheme were an Internet account is created, and not one where the card itself holds the value and can be topped up at different outlets. The cardholder's personal details are known to the card issuer and therefore the anonymity of the card holder is breached. If the card holder is not creditworthy the card issuer can refuse to issue the card. The system described is a "payment broker system" where money is paid using a user's credit card or by transferring money from a bank account to the credit card account. A broker (the card issuer) mediates the payment. This is the common method of payment over the Internet and is typical of how well known credit card companies conduct telephone transactions. The problem with this method of conducting remote transactions is that the personal details of the credit card owner are disclosed and unscrupulous persons can gain access to the user's account without the owner knowing, and no security check is made by way of checking PIN numbers. The invention of this US patent requires that the user enters personal details somewhere in order to get a card. Basically, high-risk customers or those with bad debt records are excluded from obtaining a card.

According to one aspect of the invention there is provided a method of conducting commercial transactions comprising the steps of: providing a plurality of cards each having a unique card identifier code; providing a database of a plurality of anonymous electronic accounts each of which has a unique account code associated with one card; providing a supply of cards at card issuing outlets at which a potential card user may acquire a card and pay a sum of money or money's worth and thereby assign a pre-payment value to a unique selected card; providing at said card issuing outlets a card reader/writer that is connectable to the database, said card reader/writer being operable to activate a card, and to write to a selected anonymous electronic account in the database that is unique to the activated card, (i) the card identifier code, (ii) the value of said pre-payment, (iii) a user personal identification code (master PIN) and (iv) a unique card issuer authentication code that identifies the card issuer; providing at said card issuing outlets, a payment means for effecting payment to the owner of the database of a sum of money related to the prepayment value of the activated card; characterised by the steps of:

(a) providing the card user with a plurality of disposable PINs and writing the disposable

PINs to the selected account in the database; and

(b) providing a reader / writer means at a plurality of vendor outlets where a card user can use the activated card to purchase goods or services or effect other monetary transactions, said reader/writer means being connectable to said database for transmitting to the database (i) a unique vendor authentication code, (ii) the card identifier code, (iii) the value of a transaction, and (iv) either the master PIN entered by the card user at the vendor outlet (14) or one of the disposable PINs disclosed by the card owner to the vendor, and being operable for receiving from the database confirmation that the user entered master PIN or the disposable PIN matches that stored in the account corresponding to the activated card, and confirmation that the value of the balance stored in the electronic account matches, or exceeds, the value of the transaction, and said reader/writer means also being operable, if sufficient funds exist in the account to cover the value of the transaction, to deduct the value of the transaction from the account and write the new balance to the account.

Preferably the card is usable to conduct transactions with a remote vendor of goods or services or other commercial dealings over a telecommunication line, data line, microwave link or over the Internet, wherein the remote vendor is provided with an account verification means and comparator means for receiving from the card user details of the card identifier code and the disposable PIN and for comparing the disposable PIN provided by the owner of the card with those stored in the account on the database, and if the disposable PIN matches one of those stored in the account, authorise the vendor access to the electronic account and deduct the value of the transaction from the account.

Preferably the card is provided with a microchip for storing data on the card.

Each disposable PIN defines a number of transactions that can be conducted using the disposable PIN. Alternatively each disposable PIN may defines a financial limit for any transaction that can be conducted using the disposable PIN.

Each disposable PIN may be uniquely related to the master PIN. The plurality of disposable PINs may be linked to each other by a predetermined sequence of numbers.

If desired the disposable PINs may be written to the account in the database by the card user accessing the account in the database through a password protected Internet banking website.

In a further aspect of the present invention there is provided a card for use in the method of the invention having a storage means for storing a master PIN and a plurality of disposable PINs. Preferably, the storage means is a microchip.

Preferably, the microchip is an EMV standard chip of 8 kilobytes memory or more. The storage means may have means for storing monetary value equivalent to the pre-paid value of the card or the balance remaining in the account in the database. The card may be provided with a restriction code that restricts the user of the card from using the card for predetermined unauthorised transactions. The vendors have means for detecting said restriction code and declining acceptance of the card for such unauthorised transactions.

The present invention will now be described by way of an example, with reference to the accompanying drawing that shows schematically method of payment for commercial transactions

Referring to the drawing, blank pre-payment cards 10 are provided to a number of selected outlets 13 such as retailers of goods or services, restaurants, cinemas, or the like. Each card 10 is provided with a magnetic strip 12 on which details of the card (but not the purchaser of the card) are stored. Each card preferably has a storage means, such as for example, the latest EMV 8 kilobyte or more memory microchip 11, for storing data such as PIN numbers (to be described later). Hereinafter the card 10 is described as having a microchip 11 , it should be understood that references to reading and writing the data to the card apply to cards that have a microchip 11. The latest EMV 8k memory microchips have an inbuilt ASH non-readable data guard that prevents the card being cloned and prevents unauthorised access to the data stored on the card.

The minimum data that needs to be stored on the blank card 10 is a card identification number or other indicia. When the card is issued and activated as described below master personal identification number that is typically a four digit code (master PIN) for the card, is stored on the card, and is also stored in an electronic account in a database 15. If the card has a microchip 11 , a value of money that can be amended to reflect the balance in the account may also be stored on the card. There is no identification of the person that acquires the card, stored on the card 10 or presented elsewhere on the card or stored in the database 15.

The selected retail outlets 13 are effectively "card issuers" and they are provided with a card reader/writer 14 linked 14 (a) by telephone and a modem, or a network, to a central database

15 that stores a plurality of electronic accounts each of which is uniquely associated with only one activated card. The telephone and modem link 14(a) can be by way of a land-line or cable link, a mobile phone link, or a microwave or infra-red link or internet connection. The database 15 stores details of the card indicia (card number) and the value of pre-payment paid by the purchaser of the card to the card issuer.

The value of the cards are blank prior to issue, the card issuer allocates the card to a card user for a pre-payment sum and the card reader/writer 14 updates the value stored on the microchip 11 on the card 10 to the value paid by the intended card user. This pre-payment value is simultaneously sent by the card reader/writer 14 electronically via the link 14(a) to the electronic account held on the database 15 together with an authentication code (master PIN) that is unique to the card issuer. This activates the card and writes the initial prepayment values as the balance available in the electronic account associated with the card. The master PIN is set by the customer when the card is initially issued and is uniquely associated with the account number stored in the database 15.

As a second part of the card issuing procedure, the card reader 14 transfers by way of an electronic transfer 14(b), a payment from the card issuer's account to the owner 15(a) of the database 15 equal to the pre-payment paid by the card purchaser less an agreed commission. At the time of issuing the card to the potential user, the card reader/writer 14 writes a plurality of "disposable" PINs to the selected card 10 and to the account in the database 15 via links 14(c) and 14(a) respectively. Each of these "disposable" PINs (which may be six or eight digits) are stored on the card 10 and are intended to be used, for example, once only and then discarded, or alternatively, re-useable a number of times up to a predetermined value limit (which may be less than the maximum pre-paid value of the card) and then discarded. The card user is given details of the "disposable" PINs separately.

Preferably, although not essentially, the disposable PINs are related in some way to the master PIN or to another memorable item of data or may be linked to each other by a predetermined sequence of numbers so that the card user can readily recall the disposable PIN instead of relying on carrying around a written list of them.

The purpose of the disposable PINs is that a user can use one of the disposable PINs over the internet or telephone in dealing with a vendor of goods or services to secure a transaction, but the vendor, or any unauthorised person, cannot re-use the disposable PIN for unauthorised transactions without the knowledge of the card user after the authorised transaction has been effected.

If the card issuer allocates ten, unique disposable PINs to an issued card with a pre-payment limit of, for example £50, each disposable PIN could be valid for a single transaction up to the maximum of the pre-paid limit of the card, or any other limit if the card is topped up first. In this example, if the card user uses one of the disposable PINs to secure a transaction of £25 and there is a pre-paid balance available of £50, the disposable PIN cannot be used a second time to withdraw funds from the account. A fresh disposable PIN would need to be used to conduct a new transaction. A second example of an alternative type of disposable PIN are those that are used to define transaction limits up to pre-determined values, for example 10 Euro each. If a card user wishes to purchase goods or services over the telephone or internet to the value of, for example, 30 Euros, the card user must give the vendor details of three disposable PINs to cover the transaction. Once the transaction is complete, the three used disposable PINs cannot be re-used.

Once the disposable PINs are used up, the card user can obtain fresh disposable PINs electronically, by logging on to the database 15 through a secure web site via a password, and then download disposable PINs that are automatically recorded in the card account. Alternatively, the card 10 and the account are up-dated by taking the card 10 to a card issuer 14 or vendor 16. The card issuer 13 or vendor 16 can check if the user has any up-dated disposable PINs in the card account and at the same time update or add disposable PINs to those stored on the card 10 and in the account at the database 15.

Updating the disposable PINs may be done each time the card 10 is topped up with a fresh pre-paid value or independently of toping up the value of the card 10 and requires the input of the master PIN.

If the card falls into wrong hands, the disposable PINs cannot be updated without the user entering the master PIN or a password and this can be checked by the card issuer when accessing the account on the database 15.

The acquirer of the card can use the card 10 in a wide range of vendor outlets 16 such as retail shops, restaurants, and cinemas, and can pay for events and concerts and other services. In fact the card 10 can be used anywhere for commercial transactions where the vendor 16 has a card reader/writer 17 that accepts the card 10 and can also check the electronic account on the database (15) through links 17(a).

Each vendor outlet 16 has a card reader/writer 17 that firstly checks the value stored on the card 10, compares a user entered master PIN with that stored in the account in database 15 or on the card 10 to verify that the details are correct, and deducts the value of the transaction from that stored on the card 10 and from the electronic account in the database 15 via link 17(a). Simultaneously, the vendor receives from the database owner 15(a) an electronic payment related to the value of the transaction less a commission for the transaction via links 15(a) and 17(a).

For added security, the balance stored on the card prior to the transaction is compared with that stored in the electronic account held in the database 15 and the balance on the card 10 is brought into agreement with that in the account. In practice, it is unlikely that the value on the card 10 will be less than that in the account, as will be explained later, unless the card 10 user has tampered with the card 10 to try to show a higher balance on the card 10 than in the account associated with the card. It is more likely that the value of the electronic account held in the database 15 is lower than that shown on the card 10 (as can happen if the card is used for telephonic or Internet transactions as will be explained later).

If the value of the transaction exceeds that in the account then the transaction is refused or the card user is given the opportunity of topping up the value of the card to a value equal to, or more than, the value of the transaction at the vendor's terminal.

Security of the card rests with the owner keeping the master PIN and the "disposable PINs" confidential. In the event of the card being stolen, the anonymous owner can contact the database owner either directly, or through a card issuer 13 or vendor outlet 16, and on giving the master PIN transfer the balance to an emergency account that is accessed by the user acquiring another blank card and updating the new card. For this to work, the card user is issued with a receipt at the time of acquiring the initial card that gives details of the card number or other indicia, passwords or PINs.

The card 10 may incorporate a secret restriction code not known to the card user that prevents the card being used by minors or children to purchase unsuitable material, goods or services. For example a restricted purchase card cannot be used to buy adult materials over the Internet or to buy pay-per-view television programmes or to purchase items that are illegal if supplied to a minor.

The cards 10 may be used by the card user anonymously to purchase goods and services over the Internet, or may be used for telephonic business transactions or for such services as pay-per-view television (these remote vendors are shown schematically by the reference numeral 18). The advantage of the card is that no personal banking details are given over the Internet or to the card owner's bank or the card owner's normal credit card company. Therefore there is less risk of unscrupulous persons using personal information for unauthorised transactions without the card owner's knowledge and the card cannot be used by unauthorised persons to access personal details of the card owner. In addition, if disposable PINs are used for remote transactions the risk of unauthorised transactions being effected is eliminated. Persons who would not normally be issued with a credit card because of bad credit worthiness are not discriminated against either.

For Internet and telephone transactions, the vendor 18 of goods or services or other commercial dealings has account verification and comparator reader/writer means 19 that functions in the same way as a card reader/writer 17 (except of course the card is not present). This enables the vendor 18 to check, via the link 19(a), the electronic account held in the database 15 against the card details, check the disposable PIN is valid, and verify that there are sufficient funds in the account to cover the transaction, Simultaneously the transaction is authorised, the electronic account is billed, the balance in the electronic account updated, and the vendor receives electronic payment for the transaction (less any agreed commission) from the database owner 15(a) by way of an electronic transfer links 19(a) and 15(a).

Each card reader/writer 17 at each vendor outlet 16 and the reader/writer 19 at each remote vendor 18 sends an authorisation code that is unique to the vendor 16, 18 to the electronic account via links 17(a), 19(a) respectively. To eliminate fraud by using stolen card readers/writers it is preferred to allocate a unique identification code to a telephone land line, mobile telephone link, microwave or infra-red link or URL address that identifies and validates the vendor 16 or 18 to the database 15. This also prevents any unauthorised persons using a stolen card read/writer 14 or 17 to update the value on the card 10 or alter the electronic account in the database 15.

Upon receipt of a recognised acceptance code from the database 15, the vendor's card reader/writer 17, 19 transmits the value of the transaction to the database account via links 17(a) or 19(a) as the case may be, and this is compared with the balance stored in the electronic account for that card. If sufficient funds are present in the account to cover the transaction, the transaction is accepted and the value of the transaction is deducted from the electronic account and the new balance is written to the card 10 and to the account. If insufficient funds are present in the account to cover the transaction, the transaction is declined (particularly by remote vendors 18) or if practical, the card user is given the opportunity of paying to the vendor 16 a sum sufficient to cover at least the shortfall, and the balance in the account is changed to the new balance. The procedure for topping up the account is as set out above in relation to the issue of a new card and may be done at the card issuer 13 or the vendor 16.

It will be appreciated that use of the card 10 from home to access the Internet or to effect purchases over the telephone, will not update the balance stored on the microchip 11 on the card 10. Therefore each vendor 16, 18 cannot rely on the face value of the card 10 and needs to compare the value stored on the card 10 with the balance in the electronic account. The value stored on the card 10 is then updated to match that in the account before effecting the transaction, and altered to reflect the remaining balance after the transaction.

By storing the value of the pre-payment on the card 10, a vendor 16 can carry out an initial investigation as to the likely balance available without the need to access the electronic account. However, as explained above, the balance shown in the account overrides the value on the card 10, so before any transaction is completed the vendor 16, or 18 must check that there are sufficient funds in the account by looking up the account in the database. The reason for this is that transactions conducted remotely over the Internet or telephone 18 will be recorded in the account but may not be recorded on the card 10.

The card 10 can be topped up at any vendor outlet 16 or card issuer 13 at any time by paying the vendor 16 or issuer 13 a sum of money as a pre-payment and following the procedure set out above for issuing the original card 10. In fact the card user's master PIN is not required to top up a card 10 but would be required where it is desired to add new disposable PINs to the account. The pre-payment value of the card 10 could be topped-up by a parent for a child or by any one else even without the card user being aware. An advantage of the pre-payment card proposed by this invention is that one can apply for the card giving personal data if need be but this personal data is never used to reject or refuse or influence the card holders' credit worthiness. In other words, no credit checks need to be made and even people with appalling credit rating may use the cards to effect transactions that would normally be refused by the more conventional credit and debit card systems.

It will be appreciated that at least in so far as concerns transactions that are conducted remotely the actual existence of a physical card is irrelevant so for these types of transactions the card 10 may be replaced by a "virtual card". The physical card 10 is required if it is necessary to top-up the card. However even here, the account could be topped up using Internet banking facilities to transfer money from a bank account into the account in the database 15. Where the context allows reference to a card 10 also includes reference to a "virtual" non-existent card.

It is to be understood that it is possible for a holder one card (for example a parent) to top up another card (child's card) by transferring payments from one card account to another account. This may be done either by way of an Internet banking account or by effecting the transaction at a card issuer station 13 or a vendor station 16.

Claims

1. A method of conducting commercial transactions comprising the steps of: providing a plurality of cards (10) each having a unique card identifier code; providing a database (15) of a plurality of anonymous electronic accounts each of which has a unique account code associated with one card (10); providing a supply of cards at card issuing outlets (14) at which a potential card user may acquire a card and pay a sum of money or money's worth and thereby assign a pre-payment value to a unique selected card (10); providing at said card issuing outlets (13) a card reader/writer (14) that is connectable to the database (15), said card reader/writer (15) being operable to activate a card (10), and to write to a selected anonymous electronic account in the database that is unique to the activated card, (i) the card identifier code, (ii) the value of said pre-payment, (iii) a user personal identification code (master PIN) and (iv) a unique card issuer authentication code that identifies the card issuer; providing at said card issuing outlets (13) a payment means for effecting payment to the owner of the database (15) of a sum of money related to the pre-payment value of the activated card; characterised by the steps of:

a) providing the card user with a plurality of disposable PINs and writing the disposable PINs to the selected account in the database: and

b) providing a reader / writer means (17) at a plurality of vendor outlets (14, 18) where a card user can use the activated card (10) to purchase goods or services or effect other monetary transactions, said reader/writer means (17) being connectable to said database (15) for transmitting to the database (i) a unique vendor authentication code, (ii) the card identifier code, (iii) the value of a transaction, and (iv) either the master PIN entered by the card user at the vendor outlet (14) or one of the disposable PINs disclosed by the card owner to the vendor, and being operable for receiving from the database confirmation that the user entered master PIN or the disposable PIN matches that stored in the account corresponding to the activated card, and confirmation that the value of the balance stored in the electronic account matches, or exceeds, the value of the transaction, and said reader/writer means (17) also being operable, if sufficient funds exist in the account to cover the value of the transaction, to deduct the value of the transaction from the account and write the new balance to the account.

2. A method according to claim 1 wherein the card (10) is usable to conduct transactions with a remote vendor (18) of goods or services or other commercial dealings over a telecommunication line, data line, microwave link or over the Internet, wherein the remote vendor (14) is provided with an account verification means and comparator means (17) for receiving from the card user details of the card identifier code and the disposable PIN and for comparing the disposable PIN provided by the owner of the card with those stored in the account on the database (15), and if the disposable PIN matches one of those stored in the account, authorise the vendor (14) access to the electronic account and deduct the value of the transaction from the account.

3. A method according to claim 1 or claim 2, wherein the card is provided with a microchip for storing data on the card.

4. A method according to any one of claims 1 to 3, wherein the card (10) is provided with a restriction code that restricts the user of the card (10) from using the card (10) for predetermined unauthorised transactions, and the vendors (16, 18) have means for detecting said restriction code and declining acceptance of the card (10) for such unauthorised transactions.

5. A method according to any one of claims 1 to 5, wherein each disposable PIN defines a number of transactions that can be conducted using the disposable PIN.

6. A method according to claim 6, wherein each disposable PIN defines a financial limit for any transaction that can be conducted using the disposable PIN.

7. A method according to claim 5 or claim 6, wherein each disposable PIN is uniquely related to the master PIN.

8. A method according to claim 6 or claim 7, wherein the plurality of disposable PINs are linked to each other by a predetermined sequence of numbers.

9. A method according to any one of claims 6 to 9, wherein the disposable PINs are written to the account by the card user accessing the account in the database (15) through a password protected Internet banking web-site.

10. A card for use in the method claimed in any one of claims 1 to 9 characterised in that it has storage means for storing a master PIN and a plurality of disposable PINs.

11. A card according to claim 10, wherein the storage means is a microchip.

12. A card according to claim 11 , wherein the microchip is an EMV standard chip of 8k memory or more.

13. A card according to any one of claims 10 to 12, wherein the storage means has means for storing monetary value equivalent to the pre-paid value of the card or the balance remaining in the account in the database.

14. A card according to any one of claims 10 to 13, wherein the card bears an indicia of the card number.

15. A card according to any one of claims 10 to 14, wherein the card (10) is provided with a restriction code that restricts the user of the card (10) from using the card (10) for predetermined unauthorised transactions.