Systems and methods for card present transaction without sharing card information

• US 8,534,546 B2
• Filed: 10/13/2010
• Issued: 09/17/2013
• 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
• Primary Examiner(s): St. Cyr, Daniel
• Application Number:
  US12/903,823
• Publication Number:
  US 20110084131A1
• Time in Patent Office: 1,070 Days
• Field of Search: 235/379, 235/380, 235/382, 235/487, 235/492, 235/462.46, 235/472.02
• 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 merchant'"'"'s mobile device configured to be coupled to a card reader output jack insertable and removable from a microphone port of the mobile device;

a decoding engine configured to decode signals from a swipe of a card through a slot of the card reader;

a filter that smooth'"'"'s out at least a portion of high frequency noise of signals received from the card reader;

a user interaction engine which in operation, accepts an input of information of a buyer'"'"'s financial transaction with a merchant;

a transaction engine taking as its input decoded card information from the decoding engine and a transaction amount from the user interaction engine, the transaction engine serving as an intermediary between the buyer and the merchant, so that the buyer'"'"'s card information is not stored with the merchant'"'"'s mobile device, the transaction engine accepting

information of the buyer'"'"'s financial transaction and the buyer'"'"'s card information;

communicates with a third party financial institution to authorize the transaction, the third party financial institution being coupled to a buyer'"'"'s financial institution that issued the card;

the third party financial institution presenting results of the transaction to the buyer without sharing the card information with the merchant'"'"'s mobile device; and

a transaction database in communication with the transaction engine and is external to merchant'"'"'s mobile device and configured to send a receipt to the buyer.

2. 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.

3. The system of claim 2 wherein the amount of the transaction includes list price and optionally tips.

4. The system of claim 2 wherein the additional notes related to the transaction include written description and/or pictures of the item to be purchased.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. A method comprising:

inputting an amount of a financial transaction through an interactive user application launched on a merchant'"'"'s mobile device

coupling and decoupling a card reader to the merchant'"'"'s mobile device via a microphone port of the merchant'"'"'s mobile device, the card reader structured to minimize swipe error to the mobile device that includes a transaction engine and a user interaction engine;

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 results of the transaction to at least one of, a payer and a merchant;

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;

using a filter that smooth'"'"'s out at least a portion of high frequency noise of signals received from the card reader;

decoding signals from a swipe of a card through a slot of the card reader with a decoding engine;

applying the buyer'"'"'s signature to the mobile device; and

using a transaction database in communication with the transaction engine and is external to merchant'"'"'s mobile device to send a receipt to the buyer.

13. A method, comprising:

accepting an input of information of a financial transaction from a buyer using a card reader with an output jack that is configured to be coupled and decoupled to and from a microphone port of a merchant'"'"'s mobile device;

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;

using a filter that smoothes out at least a portion of high frequency noise of signals received from the card reader;

decoding signals from a swipe of a card through a slot of the card reader with a decoding engine;

applying the buyer'"'"'s signature to the mobile device; and

using a transaction database in communication with the transaction engine and is external to merchant'"'"'s mobile device to send a receipt to the buyer.

14. The method of claim 13, 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.

15. The method of claim 13, 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.

16. The method of claim 13, 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.

17. The method of claim 13, 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.

18. The method of claim 13, 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.

19. The method of claim 13, 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.