Systems and methods for financial transaction through miniaturized card reader with decoding on a seller's mobile device

• US 8,500,018 B2
• Filed: 01/24/2011
• Issued: 08/06/2013
• Est. Priority Date: 10/13/2010
• 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, Wen, Xuancong, Dorsey, Jack
• Primary Examiner(s): Frech, Karl D
• Application Number:
  US13/012,495
• Publication Number:
  US 20120095914A1
• Time in Patent Office: 925 Days
• Field of Search: 235/375, 235/380, 235/385, 235/449, 235/379
• US Class Current: 235/449
• CPC Class Codes: G06K 7/087 flux-sensitive, e.g. magnetic, detectors G06K7/10336 takes precedence
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/322 Aspects of commerce using mobile devices [M-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 financial transaction card reader device includes a housing having a slot for swiping a magnetic stripe of a financial transaction card to complete a financial transaction between a buyer and seller. A read head is in the housing, reads data stored on the magnetic stripe and for produces a signal indicative of data stored on the magnetic stripe. An output jack is adapted to be inserted into a microphone input associated with a seller'"'"'s mobile device for providing the signal indicative of data stored on the magnetic stripe to the mobile device. The signal is decoded in the mobile device.

Claims

1. A financial transaction card reader device, comprising:

a housing having a slot for swiping a magnetic stripe of a financial transaction card to complete a financial transaction between a buyer and seller;

a read head in the housing for reading data stored on the magnetic stripe and for producing a signal indicative of data stored on the magnetic stripe;

an output jack adapted to be inserted into a microphone input associated with a seller'"'"'s mobile device for providing the signal indicative of data stored on the magnetic stripe to the mobile device

circuitry including an encryption system for providing at least a portion of a signal to the mobile device as encrypted;

a discharge subsystem to force the card reader into a power cycle; and

wherein decoding of the signal is performed in the mobile device.

2. The device of claim 1, wherein a confirmation of payment is made to the buyer in response to completion of the financial transaction.

3. The device of claim 1, further comprising:

determining that the buyer is present with the seller at the time of the financial transaction.

4. The device of claim 1, wherein the financial transaction card is selected from at least one of, credit financial transaction card, debit financial transaction card, gift financial transaction card, fund transfer financial transaction card, and other types of payment authenticating piece capable of carrying out the financial transaction.

5. The device of claim 1, wherein the mobile device is a portable electronic device that includes at least one of, software, firmware, hardware, or a combination thereof, that is capable of at least receiving a signal, decoding the signal if required, exchange information with the third party financial institution or payment network to verify the buyer and/or seller'"'"'s account information and conduct the transaction.

6. The device of claim 1, wherein the mobile device is a cell phone or a mobile digital device.

7. The device of claim 1, wherein the financial transaction is an electronic transaction conducted over the Internet or a financial transaction card present point-of-sale transaction where the buyer makes the purchase at a store front, other “

brick-and-mortar”

location, or in a presence of the seller.

8. The device of claim 1, wherein the signal includes financial transaction data selected from at least one of, amount of the transaction, additional notes related to the transaction, authorization and/or signature of the buyer.

9. The device of claim 1, wherein the signal includes financial transaction card information selected from at least one of, one or more of financial transaction card number, financial transaction card holder'"'"'s name, expiration date, and security code.

10. The device of claim 9, wherein the mobile device has an output jack and the financial transaction card reader device is configured to be coupled to the output jack.

11. The device of claim 1, wherein the read head includes a slot configured to receive and permit the financial transaction card to be swiped.

12. The device of claim 11, wherein the slot is configured to reduce torque applied on the card reader when the financial transaction card is swiped through the slot in order to maintain accuracy and reliability of the data read by read head.

13. The device of claim 1, wherein the signal produced is indicative of data stored on the magnetic stripe with minimum error via a single swipe of the financial transaction card.

14. The device of claim 1, further comprising:

passive ID circuitry in the housing of the read head to deliver a unique ID of the device to the mobile device.

15. The device of claim 1, wherein acceptance and initialization of incoming signals from a swipe of the financial transaction card are done until the signals reach a steady state, the financial transaction card swipe is detected once steady state is reached, and peaks in the incoming signals are identified when the financial transaction card swipe is detected.

16. The device of claim 1, wherein the financial transactions is completed without sharing financial transaction card information with the seller.

17. A method for conducting a financial transaction with a financial transaction card, comprising:

providing a card reader with a housing having a slot for swiping a magnetic stripe of a financial transaction card to complete a financial transaction between a buyer and seller, the housing including a read head for reading data stored on the magnetic stripe and for producing a signal indicative of data stored on the magnetic stripe

in response to a financial transaction between a buyer and a seller, using a mobile device to accept information selected from at least one of, the financial transaction or financial transaction card information used for the financial transaction;

using an encryption system of the for providing at least a portion of the signal as an encrypted signal;

using a discharge subsystem to force the card reader into a power cycle; and

wherein decoding of the signal is performed in the mobile device.

18. The method of claim 17, further comprising:

communicating at least a portion of the information with a third party financial institution or payment network to authorize the transaction.

19. The method of claim 17, further comprising:

sending confirmation of payment to the buyer in response to completion of the financial transaction.

20. The method of claim 17, further comprising:

confirming that the buyer is authorized to use the financial transaction card.

21. The method of claim 17, further comprising:

determining that the buyer is present with the seller at the time of the financial transaction.

22. The method of claim 17, further comprising:

confirming that payment is made with a communication channel of the buyer'"'"'s choice.

23. The method of claim 17, further comprising:

confirming payment with an electronic notification in the form selected from at least one of an, email, SMS message, tweet (message delivered via Twitter), instant message or communication within a social network.

24. The method of claim 17, wherein the mobile device is a seller'"'"'s mobile device.

25. The method of claim 24, wherein the financial transaction is an electronic transaction conducted over the Internet or a financial transaction card present point-of-sale transaction where the buyer makes the purchase at a store front, other “

brick-and-mortar”

location, or in presence of the seller.

26. The method of claim 17, wherein the financial transaction card is selected from at least one of, credit financial transaction card, debit financial transaction card, gift financial transaction card, fund transfer financial transaction card, and other types of payment authenticating piece capable of carrying out the financial transaction.

27. The method of claim 17, wherein the mobile device is a portable electronic device that includes at least one of, software, firmware, hardware, or a combination thereof, that is capable of at least receiving a signal, decoding the signal if required, exchange information with the third party financial institution or payment network to verify the buyer and/or seller'"'"'s account information and conduct the transaction.

28. The method of claim 17, wherein the mobile device is a cell phone or a mobile digital device.

29. The method of claim 17, wherein financial transaction information includes data selected from at least one of, amount of the transaction, additional notes related to the transaction, authorization and/or signature of the buyer.

30. The method of claim 17, wherein the financial transaction card information includes one or more of financial transaction card number, financial transaction card holder'"'"'s name, expiration date, and security code.

31. The method of claim 17, further comprising:

coupling the housing and the read head with an output jack of the mobile device.