Systems and methods for card present transaction without sharing card information

• US 20110084131A1
• Filed: 10/13/2010
• Published: 04/14/2011
• Est. Priority Date: 10/13/2009
• Status: Active Grant

• Current Assignee: Block, Inc. (f/k/a Square, Inc.)
• Original Assignee: Square Inc (Block, Inc. (f/k/a Square, Inc.))
• Inventors: McKelvey, Jim
• Granted Patent: US 8,534,546 B2
• Time in Patent Office: Days
• US Class Current: 235/379
• CPC Class Codes: G06K 7/087 flux-sensitive, e.g. magnetic, detectors G06K7/10336 takes precedence
• CPC Class Codes: G06Q 20/204 comprising interface for record bearing medium or carrier for electronic funds transfer or payment credit
• CPC Class Codes: G06Q 20/209 Specified transaction journal output feature, e.g. printed receipt or voice output
• CPC Class Codes: G06Q 20/322 Aspects of commerce using mobile devices [M-devices]
• CPC Class Codes: G06Q 20/3224 Transactions dependent on location of M-devices
• CPC Class Codes: G06Q 20/326 Payment applications installed on the mobile devices
• CPC Class Codes: G06Q 20/34 using cards, e.g. integrated circuit [IC] cards or magnetic cards
• CPC Class Codes: G06Q 20/347 Passive cards
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G07F 7/0886 the card reader being portable for interacting with a POS or ECR in realizing a payment transaction

Abstract

A new approach is proposed that contemplates systems and methods to enable an individual to complete a financial transaction by swiping a magnetic stripe card through a card reader connected to a mobile device. The size of the card reader is miniaturized to be portable for connection with the mobile device. The card reader is configured to reliably read data encoded in a magnetic strip of the card with minimum error in a single swipe and provide a signal that corresponds to the data read to the mobile device, which then decodes the incoming signal from the card reader and acts as a point-of-sale device to complete the financial transaction. Such an approach enables a person to become either a micro-merchant (payee) or a buyer/customer (payer) without having to purchase expensive card reader devices or software.

Claims

1. A system, comprising:

a user interaction engine running on a host, which in operation, accepts an input of information of a financial transaction from a buyer;

a decoding engine running on a host, which in operation, accepts and decodes signals from a swipe of a card into card information;

a transaction engine running on a host, which in operation,

accepts information of the financial transaction and the card information;

communicates with third party financial institution to authorize the transaction;

presents result of the transaction to the buyer and/or a merchant without sharing the card information with the merchant.

2. The device of claim 1 wherein the host is a mobile device.

3. The device of claim 2 wherein the mobile device is one of a cell phone, Apple'"'"'s iPhone, iPod, iPad, iTouch, and Google'"'"'s Android device.

4. The system of claim 1 wherein the input of information includes one or more of:

amount of the transaction, additional notes related to the transaction, authorization and/or signature of the buyer.

5. The system of claim 4 wherein the amount of the transaction includes list price and optionally tips.

6. The system of claim 4 wherein the additional notes related to the transaction include written description and/or pictures of the item to be purchased.

7. The system of claim 1 wherein the card information that are not shared with the merchant includes one or more of card number, card holder'"'"'s name, expiration date, and security code.

8. The system of claim 1 wherein the user interaction engine utilizes a touch screen of the mobile device to enable the buyer and the merchant to input one or more of numbers, characters, and signatures by touching the screen via a stylus or a finger.

9. The system of claim 1 wherein the user interaction engine presents products or services provided by the merchant to the buyer and enables the buyer to browse through the products and services on the mobile device.

10. The system of claim 1 wherein the user interaction engine enables the buyer to confirm the amount of the transaction via a signature signed via the interactive user application on the mobile device to complete the transaction.

11. The system of claim 1 wherein the transaction engine accepts payment from the buyer by transferring the amount deducted from account of the card to an account of the merchant if the transaction is authorized.

12. The system of claim 1 wherein the transaction engine serves as an intermediary between the buyer and the merchant so that the buyer does not have to share the card information with the merchant.

13. The device of claim 1 wherein the transaction engine presents identity information of the buyer with the merchant so that merchant can reliably confirm the identity of the buyer during the transaction to prevent credit fraud.

14. A method, comprising:

inputting an amount of a financial transaction through an interactive user application launched on a mobile device;

connecting a miniaturized card reader structured to minimize swipe error to the mobile device;

swiping a card through the card reader to initiate the financial transaction;

confirming the amount of the transaction via a signature signed via the interactive user application on the mobile device to complete the transaction;

presenting result of the transaction to a payer and/or a merchant.

15. A method, comprising:

accepting an input of information of a financial transaction from a buyer;

decoding signals from a swipe of a card into card information;

accepting information of the financial transaction and the card information;

communicating with third party financial institution to authorize the transaction;

presenting result of the transaction to the buyer and/or a merchant without sharing the card information with the merchant.

16. The method of claim 15, further comprising:

utilizing a touch screen of the mobile device to enable the buyer and the merchant to input one or more of numbers, characters, and signatures by touching the screen via a stylus or a finger.

17. The method of claim 15, further comprising:

presenting products or services provided by the merchant to the buyer and enables the buyer to browse through the products and services on the mobile device.

18. The method of claim 15, further comprising:

enabling the buyer to confirm the amount of the transaction via a signature signed via the interactive user application on the mobile device to complete the transaction.

19. The method of claim 15, further comprising:

accepting payment from the buyer by transferring the amount deducted from account of the card to an account of the merchant if the transaction is authorized.

20. The method of claim 15, further comprising:

utilizing a third party serving as an intermediary between the buyer and the merchant so that the buyer does not have to share the card information with the merchant.

21. The method of claim 15, further comprising:

presenting identity information of the buyer with the merchant so that merchant can reliably confirm the identity of the buyer during the transaction to prevent credit fraud.