Method of conducting anti-fraud electronic bank security transactions having price-date-time variables and calculating apparatus thereof

• US 6,678,666 B1
• Filed: 06/05/2000
• Issued: 01/13/2004
• Est. Priority Date: 06/05/2000
• Status: Active Grant

• Current Assignee: Van W. Boulware
• Original Assignee: Van W. Boulware
• Inventors: Boulware, Van W.
• Primary Examiner(s): TRAMMELL, JAMES P
• Assistant Examiner(s): Huseman, M.
• Application Number:
  US09/587,712
• Time in Patent Office: 1,317 Days
• Field of Search: 705/65-67, 705/72, 705/75, 705/77-79, 705/44, 235/379
• US Class Current: 705/66
• CPC Class Codes: G06Q 20/12 specially adapted for electronic shopping systems
• 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 20/341 Active cards, i.e. cards including their own processing means, e.g. including an IC or chip
• CPC Class Codes: G06Q 20/347 Passive cards
• CPC Class Codes: G06Q 20/355 Personalisation of cards for use
• CPC Class Codes: G06Q 20/385 using an alias or single-use codes
• CPC Class Codes: G07F 7/0846 On-card display means
• CPC Class Codes: G07F 7/0853 On-card keyboard means
• CPC Class Codes: G07F 7/086 by passive credit-cards adapted therefor, e.g. constructive particularities to avoid counterfeiting, e.g. by inclusion of a physical or chemical security-layer for security documents G07D7/00; for the reading of record-carriers in general G06K7/00; for the design of coded credit-cards G06K19/10
• CPC Class Codes: G07F 7/1008 Active credit-cards provided with means to personalise their use, e.g. with PIN-introduction/comparison system

Abstract

A method of computing and verifying an authorization code for a transaction. The method includes creating an algebraic formula and storing the formula in a validation unit and a calculating apparatus. A calculation is made by entering values for variables of the formula into the calculating apparatus, which substitutes the values for the variables into the algebraic formula to calculate a value for an authorization code. The variables and calculated value for the authorization code are sent to the validation unit, which calculates the authorization code and determines a match between the values for the variables as determined by the calculating apparatus and the values as verified by the validation unit. The validation unit allows payment authorization only if a match exists between the values for the variables as determined by the calculating apparatus and as verified by the validation unit.

Claims

1. A method of computing and verifying an authorization code for a transaction comprising the steps of:

(a) having a user create an algebraic formula for calculation of an authorization code, said algebraic formula comprising variables of D for date, T for time, P for price of a charge and A for said authorization code, then having said user store said algebraic formula into a storage of a validation unit,

(b) having said user enter said algebraic formula into a calculating apparatus comprising a memory for storing data and an internal clock for determining values for said variables of D for date and T for time during a calculation by pressing symbolic keypads into said calculating apparatus,

(c) having said user make said calculation with said calculating apparatus by entering in a value for said variable of P for price by pressing said symbolic keypads on said calculating apparatus, and having said calculating apparatus determine said values for said D and T variables representing a date-time combination of said calculation, then having said calculating apparatus substitute said values for said P, D, and T variables in said algebraic formula, calculate a value for said variable A of said authorization code and assemble a string information comprising said values for said P, D T and A variables, then having a communicator of said calculating apparatus transmit said string information to a vendor system,

(d) having said vendor system receive said string information, then having said vendor system transmit said string information to said validation unit,

(e) having said validation unit receive said string information with said validation unit checking into its own memory to see if said date-time combination of said values for said D variable and said T variable has been used before for a previously withdrawn charge, said validation unit also substituting said values for said variables of P, D, T and A in said algebraic formula to calculate said authorization code and determine a match between said values for said variables for P, D, T and A as determined by said calculating apparatus and said values for said variables for P,D, T and A as verified by said validation unit,

whereby said validation unit allows payment authorization to said vendor system only if said date-time combination of said values for said D variable and said T variable has not been used before for a previously withdrawn charge, and said match exists between said values for said variables for P, D, T and A as determined by said calculating apparatus and said values for said variables for P,D, T and A as verified by said validation unit.

2. The method of claim 1, further comprising:

supplying to said validation unit a memory for storing a quantity of invalid string information transmissions from said vendor system with said validation unit only allowing a plurality of said invalid string information transmissions from said vendor system before invalidating further transmission of string information from said vendor system for a predetermined time period,

whereby a hacker is prevented from trying to guess an answer to said algebraic formula and collect an electronic payment.

3. A method of depositing and withdrawing an anti-fraud electronic bank security deposit comprising:

(a) having an authorized user create a first algorithm for calculation of an authorization code, said first algorithm having a first set of variables, and having said authorized user store said first algorithm into memory of a verification system and into a file of said authorized user,

(b) having said authorized user substitute a first set of values for said first set of variables in said first algorithm and calculate a first answer corresponding to said authorization code, then having communication means transmit a first set of deposit data including said first answer and said first set of values for said first set of variables to a vendor system,

(c) having said authorized user store said first set of deposit data into memories of both said vendor system and said verification system, respectively,

(d) having said authorized user formulate a replacement algorithm by creating a second set of variables for computation of said authorization code and having said authorized user substitute said replacement algorithm into said memories of said verification system and said file, with said verification system also retaining in said memory of said verification system said first set of values of said first set of variables of said first algorithm and said first set of deposit data,

(e) having said authorized user substitute a second set of values for said second set of variables in said replacement algorithm and calculate a second answer which equals said authorization code, then having communication means transmit a second set of deposit data including said second answer and said second set of values for said second set of variables to said vendor system, having said vendor system transmit said second set of deposit data to said verification system, and having said verification system substitute said second set of values of said second set of deposit data into said first algorithm, and having said verification system authorize payment when said second set of values of said second set of deposit data equals said first set of values of said first set of deposit data and said second answer and said second set of values corresponds with said first set of variables and said authorization code of said first algorithm, and

(f) having said verification system erase said second set of deposit data from said memory of said verification system after said verification system authorizes said payment to said vendor system.

4. The method of claim 3, further comprising:

having said vendor system check a validity of said second set of deposit data by transmitting said second set of deposit data to said verification system, with said verification system then substituting said second set of values and said second answer into said first algorithm to determine a match between said first answer and said second answer, and sending a validation message back to said vendor system when said second set of values and said second answer matches said first set of values and said first answer.

5. The method of claim 3 wherein:

at least one of said first set of variables and at least one of said second set of variables is selected from the group consisting of D for date, T, for time, and P for price of a charge.

6. The method of claim 3 wherein:

said file of said authorized user comprises a calculating apparatus comprising a computer display for displaying said authorization code, numerical keypads for entering said first set of values and said second set of values, and an internal clock for determining a time and date of a calculation.

7. The method of claim 3, further comprising:

supplying to said verification system a memory for storing a quantity of invalid authorization code transmissions from said vendor system with said verification system only allowing a plurality of said invalid authorization code transmissions from said vendor system before invalidating further transmission of deposit data from said vendor system for a predetermined time period.

8. A method of depositing and withdrawing an anti-fraud electronic bank security deposit comprising the steps of:

(a) having a user create a first algebraic formula for calculation of a first authorization code A to be a resulting answer of a calculation containing a plurality of variables comprising D for date, T for time, and P for price of a charge then store said algebraic formula into a storage of a validation unit and into a memory of a calculating device,

(b) having said user substitute a first set of values for said variables in said first algebraic formula and calculate said first authorization code, then having a communicator transmit a first set of security deposit information comprising said first authorization code and said first set of values, to a checking system,

(c) having said checking system store said first set of security deposit information and transmit said first set of security deposit information to a validation unit,

(d) having said validation unit receive said first set of security deposit information and then substitute said first set of values and said first authorization code of said first set of security deposit information into said first algebraic formula to determine a match between said first authorization code as calculated by said calculating device and said first authorization code as calculated by said validation unit,

(e) having said validation unit transmit a validation message from said validation unit to said checking system when said first authorization code as determined by said validation unit matches said first authorization code as determined by said calculating device and said validation unit verifies said first set of values of said first set of security deposit information,

(f) having said user replace said first algebraic formula with a replacement algebraic formula having a replacement set of variables in said memory of said calculating device and in said storage of said valication unit, and having said validation unit retain said first algebraic formula and said first set of security deposit information,

(g) having said validation unit receive a second set of security deposit information having a second set of values, from a given checking system, then having said validation unit substitute said second set of values of said second set of security deposit information into said first algebraic formula to calculate a second authorization code and allow payment withdrawal when said second authorization code and said second set of values corresponds with said first authorization code and said first set of values, and

(h) invalidating said second set of security deposit information from said storage of said validation unit after said payment withdrawal is authorized to the checking system.

9. A method of depositing and withdrawing an anti-fraud electronic bank security deposit comprising the steps of:

(a) having a user create an algebraic formula having a plurality of variables for computation of a first authorization code, then storing said algebraic formula into a storage of a validation unit and into a memory of a calculating device,

(b) having said user substitute a first set of values for said variables in said algebraic formula to calculate said first authorization code, then having a communicator transmit a first set of security deposit information comprising said first authorization code and said first set of values, to a merchant system,

(c) having said user store said first set of security deposit information into a memory of said merchant system and into said storage of said validation unit,

(d) having said validation unit receive a second set of security deposit information having a second set of values, from a given merchant system, said validation unit then substituting said second set of values of said second set of security deposit information back into said algebraic formula to calculate a second authorization code and allowing payment withdrawal to said given merchant system when said second set of values of said second set of security deposit information corresponds with said first set of security deposit information, and said second authorization code and said second set of values also corresponds with said first set of values and said first authorization code, and

(e) voiding out said first set of security deposit information from said storage of said validation unit after a payment is authorized to said merchant system.

10. The method of claim 9, further comprising:

having said merchant transmit said second set of security deposit information to said validation unit and having said validation unit substitute said second set of security deposit information back into said algebraic formula, having said validation unit determine a match, and having said validation unit transmit a validation message back to said merchant system when said second set of security deposit information and said second authorization code matches said first set of security deposit information and said first authorization code,

whereby said merchant system can verify that said second set of security deposit information is valid so that an electronic payment may be collected by said merchant system at a later date as needed by said merchant system.

11. The method of claim 9, wherein:

said plurality of variables of said algebraic formula comprises variables of D for date, T, for time, and P for price of a charge.

12. The method of claim 9 wherein said calculating device comprises:

a computer display for showcasing said first authorization code and said second authorization code, numerical keypads for entering in said first set of values, said second set of values and said algebraic formula, and an internal clock for determining a time and date of a calculation.

13. The method of claim 9 further comprising:

supplying to said validation unit a memory for storing a quantity of invalid security deposit transmissions from a given merchant system with said validation unit only allowing a plurality of said invalid security deposit transmissions from said given merchant system before invalidating further transmission of security deposit transmissions from said given merchant system for a predetermined time period.

14. A method of computing and verifying an authorization code for a transaction comprising the steps of:

(a) having a user create an algorithm having a plurality of variables for calculation of an authorization code, and storing said algorithm into a memory of a verification system,

(b) having said user enter said algorithm into a calculating apparatus comprising a memory for storing data and an internal clock by pressing symbolic keypads into said calculating apparatus,

(c) having said user enter values for said variables in said algorithm by pressing said symbolic keypads on said calculating apparatus, said calculating apparatus substituting said values for said variables in said algorithm and calculating said authorization code in an authorization code calculation, said calculating apparatus determining a time figure representing a time of said authorization code calculation, then having said calculating apparatus transmit said authorization code, said values, and said time figure to a reading system,

(d) having said reading system receive said authorization code, said values, and said time figure, said reading system transmitting said;

authorization code, said values and said time figure to a verification system,

(e) having said verification system receive said authorization code, said values, and said time figure with said verification system checking into its own memory to see if said time figure has been used before for a previously withdrawn charge, said verification system also substituting said values and said authorization code in said algorithm to calculate said authorization code and determine a match between said authorization code as calculated by said calculating device and said authorization code as calculated by said verification system,

whereby said verification system allows payment authorization to a vendor of said reading system only if said time figure has not been used before for a previously withdrawn charge and said authorization code as calculated by said verification system also corresponds with said authorization code as calculated by said calculating device.

15. The method of claim 14, further comprising:

providing a memory to said verification system, storing in said memory, a charge-credit by said vendor to an account, a timepoint T of said charge-credit, and said algorithm during said timepoint T of said charge-credit, said verification system allowing a;

price P of a charge in said charge-credit to be deducted from said account as long as a new data transmission from a reading system includes said timepoint T, and said authorization code as calculated by said verification system corresponds with said authorization code as calculated by said calculating device.

16. The method of claim 14, further comprising:

providing said verification system with a memory for storing a quantity of invalid authorization code transmissions from a reading system, and having said verification system count and allow a predetermined quantity of said invalid authorization code transmissions from said reading system before invalidating, for a predetermined time period, further transmission of invalid authorization code transmissions from said reading system, whereby said verification system has an ability of slowing down a vendor from guessing a valid authorization code.