WO2002039402A1

WO2002039402A1 - Financial transaction method

Info

Publication number: WO2002039402A1
Application number: PCT/AU2001/001449
Authority: WO
Inventors: Howard Mark Gardener; Perry Ihaka Thompson; Darcy Lester Flynn
Original assignee: Nowcard International Limited
Priority date: 2000-11-08
Filing date: 2001-11-08
Publication date: 2002-05-16
Also published as: AU2002214801A1

Abstract

A financial transaction method enabling a customer to deposit funds at a plurality of authorized service providers. A customer's card (with no printed material identifying the customer or his/her financial institution) is 'swiped' in a card acceptor; the customer enters a password and PIN; the service provider enters the amount deposited and the card acceptor transmits the information and identifying service provider code to the network. Respective receipts are issued to the source provider and the customer who may be issued with a new PIN for the next transaction. For a secure financial transaction method, a customer accesses a network via a terminal at any one of the selected service providers connected to the network using a card which has no indicia identifying the customer or his/her financial accounts. The customer enters a password and PIN and authorises the supply of goods/services via the network so that the supplier of the goods/provider of the services cannot identify the actual customer.

Description

TITLE: FINANCIAL TRANSACTION METHOD

BACKGROUND OF THE INVENTION

1. Field of the Invention

THIS INVENTION relates to a financial transaction method. The method is particularly suitable for, but not limited to, the deposit of cash for future purposes.

The invention also relates to a secure financial transaction method.

The method is particularly suitable for, but not limited to, a method for the purchase of goods and/or services where the customer maintains his/her identity secret from (or not accessible by) the supplier or service provider.

2. Prior Art

At present, the proportion of purchases (of both goods and services) over the Internet by so-called e-commerce is relatively small.

However, annual growth rates of 300-500% are being experienced in

Australia and it is estimated that within the next twenty years up to 40-

50% of all commercial transactions will be made via the Internet.

One major concern for potential customers is the security of their personal details and of their financial accounts from which the purchases are paid.

Some of the major problems associated with accessing some Internet sites is that most customers do not want their personal and/or credit card details listed on-line for the following reasons: a) fraudulent use of the credit cards or details; b) the card information and personal details are recorded and kept by the on-line supplier; c) a "profile" of the customer/card user is built up by many on-line suppliers giving/selling the information for "mailing lists", etc; d) users of "adult sites" are worried that their information

(from their credit cards and/or debit cards) could be used against them eg, by way of blackmail; e) "adult sites" are notorious for charging on-going additional costs, knowing that the customer/card user will not complain for fear of publicity, etc. a) Fraudulent use of Cards

The instances of someone's credit card, or debit card, being used to purchase goods and services illegally is now very widespread.

This illegal use of such cards is often activated by the use of a card, and the details are used to fraudulently "use" the card. Most card transactions record the card number and signature of the user, thereby enabling this information to be copied and used on a fake card, between the initial use and the time when the original cardholder questions the statement, and the card is cancelled. b) Personal Security of Information Information Security is a major detriment, and potential financial loss avenue, of credit cards, debit cards, Online transactions, bank accounts, etc.

The problem of personal information being "hacked", leaked, sold as mailing lists, or used illegally, or without the permission/ knowledge of the person involved, is becoming all too common.

SUMMARY OF THE PRESENT INVENTION

Some of the major shortcomings of the modern high technology world of electronic funds transfer on the Internet and through credit / debit cards, etc, are addressed in this invention. Problems with the Internet, fraudulent use of cards, personal security of information, the banks, credit cards, towns without banks, cash-less transactions, etc., can be rectified, or reduced, by this invention/process.

It is a preferred object of the present invention to provide a financial transaction method employing a card with the ability for a cardholder to deposit money onto the card and then use the card to purchase online.

It is a further preferred object to provide such a method employing a card which will allow people to deposit money on the Card, and then use the Card on the Internet. (Obviously, all deposits would be subject to the laws and regulations of the relevant countries.)

One further object is to provide a method employing a card which, by requiring a password, and an ever-changing pin number, will provide greater security against fraudulent use of a card.

One further object is to provide a method employing a card, where all possible personal information given by the Card Applicant to the Card Supplier, will be held Offline, with no Internet or Online connection.

One further preferred object of the method to employ a card, as another security option, not having the Bank, or financial institution, on the Card, to reduce the avenues for "hackers". One still preferred object of the method is to employ a card, as another security option, not having the name of the Cardholder on the Card. This would significantly reduce the possibility of "hacking" and/or fraudulent / unauthorised access to the Cardholder's personal information.

One still preferred object of the method is to employ a card, as another security option, providing security "fire-walls", or "breaks", between the Card operator and the Card's financial institution.

One preferred aspect of the method employing the card, is to have a PIN # that changes as the balance of the card reaches a predetermined target amount eg, $500 or $1000, etc. (This aspect of the Card would allow someone to save to the target amount, with that PIN #, and obtain a new card to start saving for another target.)

Another preferred option would be, when the "initial target" amount is reached on one PIN #, the PIN # changes and the subsequent deposited amounts are under a new PIN #. When the balance is drawn down to the "initial target" amount, the Cardholder has to use the initial pin #, thereby alerting the Cardholder to the fact that they are now below their initial target balance.

Many Banks today, particularly in Australia, take more fees and charges than they pay in interest, particularly on smaller accounts.

This invariably means that the bank balance reduces in time to zero. The Bank's fees and charges have consumed ALL of the depositor's funds.

One preferred object of the method could be no fees and charges, so the money remains in the Cardholder's account and does not get consumed. This aspect of the Card is very appealing to most consumers who are trying to hold onto their money.

This would create a Card system, where funds could be deposited at ALL hours, be available for Online Internet purchases, and also for general retail purchases, etc. Credit cards are only available to those people who are

"approved" by the Bank (or card provider) under the Bank's (etc) strict guidelines.

Many people who have had some difficulty in their financial life, cannot obtain a credit card. Younger people cannot obtain a credit card, or a debit card.

Debit cards are usually only obtained by people who have a long association with a Bank, or who are "invited" to have a debit card, by their Bank or Financial Institution.

Many older people, who have a fear of Banks from the Bank collapses of the early 1900's, have little or no Bank activity. They find it virtually impossible to obtain credit or debit cards.

They could obtain a new style deposit Card, and be able to access the Internet purchases and many other Card only purchases, like telephone booking reservations for shows, etc. One preferred object of the method, is that a person can deposit their money onto the Card and immediately become an Online purchaser, or a retail purchaser, without needing to satisfy the Bank's (etc) requirements.

Any potential purchaser, who deposits their own money onto the Card, can now gain access to purchases on the Internet, and other retail opportunities requiring a Card.

Obviously, all deposits would be subject to the laws and regulations of the relevant countries.

Many towns in Australia, and throughout the world, do not have a Bank. Many times it is due to high capital investment for the Bank building, staff and general overheads.

These towns could have our "Point of Sale" machines at the service station, retail store, etc.

One preferred object of the new method allows these people to DEPOSIT their money onto the Card, and also to have card access to Internet purchases and retail purchases.

Deposits can be made via the Card participants, without the need for a Bank, or the Bank's fees, charges or card requirements.

Because the new Card does not specific Bank buildings, staff, etc, this Card can replace a Bank in small towns, and eliminate the fees and charges associated with Banks.

One preferred object of the new method is as the cash-less card that is trying to be utilised for small cash items, like buses, trains, newspapers, etc. The major setback for many types of cash-less cards can be the problem of keeping track of the balance and depositing funds accordingly.

The convenience of being able to deposit amounts into the new Card at any of the designated "Point of Sale" machines which are envisaged to be in newsagents, service stations, stores, etc, will make this new Card a truly workable solution to the cash-less card scenario. Each week or month the Card user could deposit the estimated amount required on a special cash-less Card account, or a special section of their main Card could be allocated as cash-less translations up to a predetermined level, possibly before any charges are incurred.

For example, a Card holder could be allocated a pro-rata number of "free" cash-less transactions, subject to the main Card use, balance, etc.

One of the major worldwide problems today is teaching people, especially younger people, to SAVE money.

One preferred object of the method is to provide an Incentive Savings Card which would encourage people to save. If the savings money is on a Card, it is less tempting than cash in the hand, thereby the tendency is to not spend. Today, savings are eroded by many of the Bank (etc) accounts. This aspect of the Card could encourage people to save, without excessive fees and/or charges.

Other options could include Incentives like keeping spending below a predetermined amount, or number of transactions, with a small "charge penalty" for excess spending or cash withdrawals. Interest on this aspect of the Card's balance could be an incentive option on specific Card accounts.

A major security and/or fraud problem with credit or debit cards occurs when card users phone their details to order products / services like ticket reservations, pizza delivery, etc.

This enables the card information to be easily available to anyone who is listening nearby, or "tracking"mobile phone calls, etc.

One preferred object of the method is the ability to more safely use the card on the phone. This new card, having password and pin# access by way of the alpha-numerical phone keypad, virtually eliminates the possibility of someone listening in on your card # and information as you speak over the phone. Much safer security against fraud.

"Keying in" the password and pin # eliminates the need to speak the Card information which is easily listened to, for example, at a party ordering more supplies or, in the workplace ordering ticket reservations, etc.

One preferred object of the new method would be to create a new style Card which has the convenience of deposit at "Point of Sale" outlets, and also the ease of ATM withdrawals. This type of Card does not exist today, and would have an enormous advantage of being able to deposit funds through a multitude of "Point of Sale" outlets without needing to deposit at your particular Bank, etc.

This aspect would be far more attractive than the credit cards and debit cards on offer at the present.

Many businesses today deposit the employee's wages, or salaries, directly into their Bank accounts.

Some Banks immediately charge fees for the employee to use their money. Complaints are always being made, particularly by the ones who can least afford the extra costs.

One preferred object of the method is to install the Card Acceptor machines in the workplace, where the employee's wages, part wages, etc, could be deposited onto their Card without any fees or charges. This would save money for the employee and also allow the safety afforded by not carrying large amounts of cash around on pay day.

Pensions, and social security benefits, are usually paid into the recipient's Bank, etc, account. In some circumstances fees and charges are applicable and, in other cases, there is no Bank in many areas.

One preferred object of the method would be for pension or social security recipients to nominate the new Card as their account.

This Card would enable people who may not have a credit type card, or who live in remote areas, to access Online shopping, purchase ticket reservations, etc, over the phone, use the Card locally, even in areas without a Bank, etc.

An ideal situation would see at least one of the new Deposit Card Acceptors in each town, remote Roadhouses, etc, which would open up to all people the purchasing possibilities only available to credit card holders and metropolitan residents. The applications for the new DEPOSIT Card are not limited to applications stated herein.

It is a still further preferred object of the present invention to provide a secure financial transaction method without (or minimising) the risk of the customer's information being revealed or misused. It is a still further preferred object of the present invention to provide a secure, anonymous, 24 hour on-line access.

It is a still further preferred object of the present invention to provide a method which enables funds to be deposited through a large number of service providers connected to a network to enable the deposited funds to purchase goods/services from other service providers connected to the network.

It is a still further preferred object of the present invention to provide an method where access can be controlled eg, the customer must be over 18 years or meet other relevant requirements to enable access to "adult sites" or other restricted sites on-line.

It is a still further preferred object of the present invention to provide a card suitable for the method.

In one aspect the present invention resides in a financial transaction method including: issuing a transaction Card (or other data carrier) to a customer who has a password and/or an initial PIN (Personal Identification Number); passing (or integrating or reading) the Card through a Card acceptor at a participant Service provider, the Card acceptor having connection to a network and having a PIN and/or code to identify the particular service provider; the customer entering the password and/or PIN and the service provider entering the amount of cash deposited (or withdrawn) and/or the amount of goods / services purchased; and the Card acceptor issuing a first receipt or transaction record to the service provider recording the transaction, and a second receipt or transaction record to the customer recording the transaction and (optionally) issuing a new PIN to be entered for the next transaction.

Preferably the Card, which may have a barcode, magnetic strip and/or other data carrier, has no indicia indicating (a) the name or other identifying details of the customer, (b) the name / address of the financial institution (eg, bank or credit unit) where the customer's funds are held, and (c) the type of account. The only printed indicia on the Card may be a card identity number eg, 123456789.

The customer's password and initial PIN may be selected by the customer and/or allocated to the customer.

The customer's password may contain a string of letters and/or digits entered via eg, an alpha-numerical keypad on the Card acceptor. Preferably each PIN number has at least four digits, which are entered via the keypad. In a second aspect, the present invention resides in a secure financial transaction method including: issuing a transaction card (or other data carrier) to a customer who has a password and/or an initial PIN, the card having no information or data thereon identifying the customer or details thereof; passing (or interrogating or reading) the card through a card acceptor in connection to a network connectable to a plurality of sites providing goods and/or services; the customer entering the password and/or PIN together with the goods and/or services to be provided; and the card acceptor issuing a receipt or transaction record to the customer recording the transaction and (optionally) issuing a new PIN to be entered for the next transaction.

The network will preferably transfer funds to the supplier/service provider for the purchase of the goods and/or services but will not transmit details of the customer's account from which the funds are drawn. For example, when the customer initiates the transaction, the relevant funds (and any service fees) may be initially drawn from the customer's account and placed in a trust or escrow account operated by the network, and the funds remitted to the supplier/service provider are drawn from the trust or escrow amount operated by the network.

Where the supplier is to deliver goods to the customer, the customer may provide a delivery address eg, a post office box or a physical collection address eg, operated by a transport or consignment company from which the customer can collect the goods on provision of suitable identity eg, via the card.

Preferably the card, which may have a bar code, magnetic strip and/or other data carrier, has no indicia indicating

(a) name or other identifying details of the customer;

(b) name/address of the financial institution (eg, bank or credit union), where the customer's funds are held; and

(c) the type of account. The only printed indicia on the card may be a card identity number eg, 123456789.

The customer's password and initial PIN may be selected by the customer and/or allocated to the customer. The customer's password may contain a string of letters and/or digits entered by eg, a alpha-numeric or keypad on the card acceptor. Preferably each PIN number has at least four digits which are entered by the keypad.

Alternatively to the receipt, the transaction record may be an e-mail or other form of communication or suitable transaction record. The customer's receipt may optionally display the customer's current balance after the transaction, and the new PIN generated may be that balance amount (eg, with a currency sign and decimal point omitted ie, a new PIN # 150760 indicates a new credit balance of $1507.60 in the customer's account). The card acceptor may be connected to the customer's computer, from where the customer sends their card details, password and PIN to the network via the Internet. The order is then despatched by the network to the supplier or service provider under an e-mail address operated by the network. In a preferred form, the Card acceptor has two printer heads, where one head prints the customer's receipt so that the information thereon is not viewable to the service provider; while the second head prints the secure provider's receipt. (Alternatively, the Card acceptor has a single printing head which prints both receipts.) The transaction record may be an e-mail or other form of communication or transaction record.

The customer's receipt may optionally display the customer's current balance after the transaction, and the new PIN generated may be that balance amount (eg, with the decimal point omitted ie, a new PIN # 150760 indicates a new credit balance of

$1507.60 in the customer's account).

In a third aspect, the present invention resides in a transaction card suitable for the above methods.

BRIEF DESCRIPTION OF THE DRAWINGS To enable the invention to be fully understood, preferred embodiments will now be described with reference to the accompanying drawings, in which:

FIG. 1 is a schematic diagram of the steps of a first embodiment of the method; and

FIG. 2 is a similar design of the second embodiment. DETAILED DESCRIPTION OF THE

PREFERRED EMBODIMENTS

Referring to FIG. 1 , the first embodiment of the method of the present invention incorporates the following steps.

To enable the invention to be fully understood, a preferred embodiment will now be described.

1. The user/applicant applies for a card (or future type card) via

Electronic means, post mail, or value added component of Retailer, etc.

The personal Applicant's details are kept secret and separate from any medium. The information is ONLY kept for future reference eg, if the card is lost or stolen, etc. This is a major difference to most credit, debit cards, etc, today as there are many instances where the information is given (or sold) as mailing lists. This Card may only have a number, not the Bank or the Cardholder's name. 2. Holder receives card via POST mail only, reducing the risk of Online fraud. The Applicant's password and initial pin # are obviously not with the Card.

3. Cardholder can now deposit cash amount(s) via their Card access password and pin #, at any time, through "designated outlets" with eg, EFTPOS, EFTNET or similar (Electronic Funds Transfer Point of Sale)

Card acceptors, (which can be existing or specially supplied to outlets) at service stations, post offices, stores, merchants, etc, who are the participant Card service providers, Australia wide and/or worldwide.

It is envisaged that specific POS type terminals / machines with the necessary Deposit capabilities will be installed at participating outlets. 4. At this stage the Card information is totally secure and not available to participant store / outlet operators. Possibly, with just a number on the Card.

5. Retailer or "designated outlet, "swipes" Card barcode, magnetic data etc, or similar, data recognition apparatus, through the

Card acceptor.

6. Card owner keys in their password and gives the amount of deposit to the supplier, the amount is then registered, and a new pin number is generated for the deposit and a receipt containing the new pin # is generated only for customer.

^* The "supplier" or "Card Acceptor provider" would have a "supplier's pin / code number" to "authorise" the correct deposit amount. This, in conjunction with the Cardholder's receipt, would eliminate the chance of someone entering a larger amount than the cash paid to the supplier and/or any discrepancies in the amount deposited.

7. The Card Acceptor machine system generates a pin number, which is printed ONLY on the receipt for the customer. The supplier does not see any numbers at any stage reducing the risk of fraud.

* The "supplier" receives a receipt for the amount for his records and remittance.

* The customer receives a receipt for the amount and a pin number. * One option is each time the customer deposits / adds money to the Card, the new pin number generated is for the new total balance of Card. Other options are further herein.

* The new balance may, or may not, at the customer's option, be printed on the new receipt. * Another option is to allow the Cardholder to deposit a fixed amount eg, $50, $100, etc, and then use that amount on that pin #. When the money has been spent, they can deposit another amount and receive a new pin #. ^* By having the new generated pin number for the balance, if the customer chooses, could act as a savings account card, or a special purpose or project Card, as described herein. 8. The Cardholder can now go shopping Online on the

Internet, purchase at participating outlets, and engage in many of the further, but not limited to, options discussed herein. 9. Cardholder uses a combination of their password, which is known only to the Cardholder, and the pin (or any other system we develop) Online or in any other situation where the Card is accepted.

10. They make their purchase or transaction.

11. The goods or services are dispatched according to the Cardholders' directions.

It will be readily apparent to the skilled addressee that the separation of the customer's details, card number, password and generation of a new PIN number at each transaction (both deposit and withdrawal) provides maximum security. Furthermore, all data / information transmitted between the

Card acceptor and the secure server can be encrypted (eg, 128 bit encryption) to increase security.

The mere access to a customer's card would not enable a third party to access the funds held in the Card owner's account. Indeed, the third party would not have access to the Card owners's identify; or to the location (eg, financial institution) or type of account to which the Card is linked.

Referring now to the second embodiments of FIG. 2, the customer applies for a card for use with the method on the network. The customer's personal details are kept secret and separate from any medium. The information is only kept (by the network) for future reference eg, if the card is lost or stolen etc. The card only has an identifying number (or code) and does not include the customer's details or any details of the customer's financial accounts.

The customer receives the card by mail or courier only, reducing the risk of on-line fraud.

The customer's password and initial PIN are delivered separately from the card. (The password and/or initial PIN may be selected by the customer and/or be allocated to the customer.)

For access to "adult sites" or other restricted sites, the customer may be required to provide suitable identification eg, proof of age (when applying for the card)to establish that the customer is entitled to access such sites.

The customer can deposit funds to enable the purchase of goods and/or services at a whole range of service providers connected to the network. Such service providers may include post offices; service stations; retail stores; video hire stores or other outlets to provide with a suitable card reader.

When any such funds are deposited, the service provider "swipes" the card through a card acceptor; and the customer keys in their password and PIN and hands the cash to the service provider, who enters the amount into the card acceptor. That data, together with a code and/or PIN identifying the service provider, is transmitted by the card acceptor to the network and is acknowledged by the issuing of a first receipt by the card acceptor to the service provider acknowledging the deposit of the funds, and a second receipt to the customer acknowledging the receipt of the funds, (optionally) the new credit balance in his/her account and further (optionally) a new PIN number to be used for the next transaction.

When a customer wishes to purchase goods and/or services, the card is swiped through the card acceptor and details of the intended purchase(s) are entered preferably via an alpha-numeric keyboard on the card acceptor, or on a computer terminal connected thereto.

When goods are being purchased, the customer can provide a delivery address which is a postal address or a physical delivery address (eg, transport or consignment company depot) which has no connection to the customer.

The funds for the purchase are transferred from the customer's bank account to a "transfer" or trust account within the network (or from the customer's funds deposited with the network), and the order is transmitted to the supplier or service provider together with the payment details from this intermediate account. In this way the nexus between the customer's bank account (or credit card account) and the supplier/service provider is broken, with the service supplier/service provider being ensured of receiving the funds which are "guaranteed" by the network. (The network would only transmit the order to the supplier/service provider when it has determined that the customer has sufficient funds therefor.) The supplier can then arrange despatch and delivery of the goods to the designated address or the service provider can provide the services eg, providing access to an adult Internet site.

At no time can the supplier or service provider establish any details of the customer. At most, they will have the customer's card number, and this will not provide any identity to the customer, and any additional charges which the supplier or service provider may try to apply against that card number will be rejected by the network as the purchases have not been ordered and/or authorised by the customer. The benefits of the method and the associated card, include a) absolute on-line security; b) 24 hour access; c) anonymous on-line access; d) customer's, even in remote locations, can access the system as they can deposit funds through service providers such as service stations, post offices, corner stores and locations where no Banks operate; e) any unauthorised on-line charges are controlled; f) the card access PIN can be constantly changed, if the customer chooses, to prevent any unauthorised extra charges being made on the last used information.

Various changes and modifications may be made to the embodiments described without departing from the present invention.

Claims

CLAIMS:

1. A financial transaction method including: issuing a transaction card (or other data carrier) to a customer who has a password and/or an initial PIN (Personal Identification Number); passing (or integrating or reading) the Card through a Card acceptor at a participant Service provider, the Card acceptor having connection to a network and having a PIN and/or code to identify the particular service provider; the customer entering the password and/or PIN and the service provider entering the amount of cash deposited (or withdrawn) and/or the amount of goods / services purchased; and the Card acceptor issuing a first receipt or transaction record to the service provider recording the transaction, and a second receipt or transaction record to the customer recording the transaction and (optionally) issuing a new PIN to be entered for the next transaction.

2. A method as claimed in Claim 1 , wherein: the Card has a barcode, magnetic strip and/or other data carrier, but has no indicia indicating (a) the name or other identifying details of the customer, (b) the name / address of the financial institution where the customer's funds are held, and/or (c) the type of account.

3. A method as claimed in Claim 1 or Claim 2 wherein: the customer's receipt displays the customer's current balance after the transaction, and the new PIN generated indicates that balance amount.

4. A secure financial transaction method including: issuing a transaction card (or other data carrier) to a customer who has a password and/or an initial PIN, the card having no information or data thereon identifying the customer or details thereof; passing (or interrogating or reading) the card through a card acceptor in connection to a network connectable to a plurality of sites providing goods and/or services; the customer entering the password and/or PIN together with the goods and/or services to be provided; and the card acceptor issuing a receipt or transaction record to 5 the customer recording the transaction and (optionally) issuing a new PIN to be entered for the next transaction.

5. A method as claimed in Claim 4 wherein: the network transfers funds to the supplier/service provider for the purchase of the goods and/or services but does not transmit o details of the customer's account from which the funds are drawn.

6. A method as claimed in Claim 5 wherein: the customer initiates the transaction, the relevant funds

(and any service fees) are be initially drawn from the customer's account and placed in a trust or escrow account operated by the network, and the 5 funds remitted to the supplier/service provider are drawn from the trust or escrow amount operated by the network.

7. A method as claimed in Claim 1 or Claim 4 wherein: when a credit balance of an account, associated with a card, equals or exceeds a preset limit, a new PIN is issued but the old PIN is 0 reactivated when the credit balance falls below the preset limit.