Systems and methods for financial transaction through miniaturized card reader with confirmation of payment sent to buyer

• US 8,573,486 B2
• Filed: 01/06/2011
• Issued: 11/05/2013
• Est. Priority Date: 10/13/2010
• Status: Active Grant

• Current Assignee: Block, Inc. (f/k/a Square, Inc.)
• Original Assignee: Block, Inc. (f/k/a Square, Inc.)
• Inventors: McKelvey, Jim, Wen, Xuancong, Dorsey, Jack
• Primary Examiner(s): Le, Thien M
• Assistant Examiner(s): TAYLOR, APRIL ALICIA
• Application Number:
  US12/985,982
• Publication Number:
  US 20120095857A1
• Time in Patent Office: 1,034 Days
• Field of Search: 235/375, 235380-382, 235/435, 235/439, 235/449, 235/492
• US Class Current: 235/380
• CPC Class Codes: G06Q 20/02 involving a neutral party, e.g. certification authority, notary or trusted third party [TTP]
• CPC Class Codes: G06Q 20/20 Point-of-sale [POS] network 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 20/209 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 20/34 using cards, e.g. integrated circuit [IC] cards or magnetic cards
• CPC Class Codes: G06Q 20/347 Passive cards
• CPC Class Codes: G06Q 20/382 insuring higher security of transaction
• 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 system is provided that includes a transaction engine running on a mobile device. In response to a financial transaction between a buyer and a seller, the transaction uses the mobile device to accept information selected including but not limited to information from financial transaction or information pertaining to financial transaction card used by the buyer in the transaction. At least a portion of this information is communicated with a third party financial institution or payment network to authorize the transaction. The buyer receives confirmation of the payment.

Claims

1. A system of payment, comprising:

a card reader configured to be coupled to and from a mobile device, the card reader including a housing;

a read head positioned in the housing, the read head including a slot for swiping of a financial transaction card for reading data stored on a magnetic stripe of the financial transaction card and producing a signal indicative of data stored on the magnetic stripe, an output jack insertable and removable from a microphone port of the mobile device and providing an output jack signal from the card reader, an encryption system configured to provide encrypted information from the card reader to the mobile device, and a monitor system coupled to the encryption system configured to manage card reader behavior between power cycles; and

a transaction engine that communicates at least a portion of information from the output jack signal with a third party payment system in communication with a first party'"'"'s financial account, the third party payment system authorizing a financial transaction and providing a confirmation of payment from the third party payment system using a communication channel of a buyer'"'"'s choice, the buyer obtaining a receipt for the transaction from the third party payment system.

2. The system of claim 1, wherein confirmation of payment is made in real time.

3. The system of claim 1, further comprising:

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

4. The system of claim 1, further comprising:

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

5. The system of claim 1, wherein a real-time confirmation of payment is made with a communication channel of the buyer'"'"'s choice.

6. The system of claim 1, wherein the real-time confirmation of payment is an electronic notification in the form selected from at least one of an, email, SMS message, tweet (message delivered via online social networking service), instant message or communication within or from a social network.

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

8. The system 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.

9. The system of claim 1, wherein the mobile device is one of a mobile digital device.

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

brick-and-mortar”

location, or simply in a presence of the seller.

11. The system of claim 1, 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.

12. The system of claim 1, wherein the financial transaction card information includes one or more of card number, card holder'"'"'s name, expiration date, and security code.

13. The system of claim 12, further comprising:

using the card reader device to read data stored on the magnetic stripe of the financial transaction card.

14. The system of claim 13, wherein the mobile device has an output jack and the card reader device is configured to be coupled to the output jack.

15. The system of claim 13, wherein the card reader device includes a slot configured to receive and permit the financial transaction card to be swiped.

16. The system of claim 13, 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.

17. The system of claim system of claim 16, further comprising:

recording and using physical location of a point of sale to verify the financial transaction.

18. The system of claim 1, further comprising:

generating a dynamic receipt for the financial transaction.

19. The system of claim 18, wherein the dynamic receipt includes information pertaining to environmental information of the financial transaction.

20. The system of claim 18, wherein the dynamic receipt includes physical coordinates/location of the financial transaction captured via a Global Positioning System (GPS) receiver.

21. The system of claim 1, further comprising:

detecting fraudulent use of the financial transaction card.

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

providing a card reader configured to be coupled to and from a mobile device, the card reader including a read head positioned in a housing and an output jack insertable and removable from a microphone port of the mobile device and providing an output jack signal from the card reader, the card reader including an encryption system configured to provide encrypted information from the card reader to the mobile device, and a monitor system coupled to the encryption system configured to manage card reader behavior between power cycles;

using a transaction engine to communicate information from the output jack signal with a third party financial institution to authorize a financial transaction, wherein at least a portion of the information is encrypted information;

communicating with the third party financial institution to authorize the financial transaction; and

providing the buyer with a receipt from the third party financial institution.

23. The method of claim 22, wherein confirmation of payment is made in real time.

24. The method of claim 22, further comprising:

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

25. The method of claim 22, further comprising:

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

26. The method of claim 22, wherein confirmation of payment is made is made with a communication channel of the buyer'"'"'s choice.

27. The method of claim 22, wherein confirmation of payment is an electronic notification in the form selected from at least one of an, email, SMS message, tweet (message delivered via online social networking service), instant message or communication within a social network.

28. The method of claim 22, wherein the mobile device is a seller'"'"'s mobile device.

29. The method of claim 22, wherein the financial transaction card is selected from at least one of, credit card, debit card, gift card, fund transfer card, and other types of payment authenticating piece capable of carrying out the financial transaction.

30. The method of claim 22, 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.

31. The method of claim 22, wherein the mobile device is a mobile digital device.

32. The method of claim 22, wherein the financial transaction is an electronic transaction conducted over the Internet or a card present point-of-sale transaction where the buyer makes a purchase at a store front, other “

brick-and-mortar”

location, or simply in a presence of the seller.

33. The method of claim 22, 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.

34. The method of claim 22, wherein the financial transaction card information includes one or more of card number, card holder'"'"'s name, expiration date, and security code.

35. The method of claim 22, further comprising:

using a card reader device to read data stored on a magnetic stripe of the financial transaction card.

36. The method of claim 35, wherein the mobile device has an output jack and the card reader device is configured to be coupled to the output jack.

37. The method of claim 35, wherein the card reader device includes a slot configured to receive and permit the financial transaction card to be swiped.

38. The method of claim 37, wherein the slot is configured to reduce torque applied on the card reader device when the financial transaction card is swiped through the slot in order to maintain accuracy and reliability of the data read by read head.

39. The method of claim system of claim 38, further comprising:

recording and using physical location of a point of sale to verify the financial transaction.

40. The method of claim 22, further comprising:

generating a dynamic receipt for the financial transaction.

41. The method of claim 40, wherein the dynamic receipt includes information pertaining to environmental information of the financial transaction.

42. The method of claim 40, wherein the dynamic receipt includes physical coordinates/location of the financial transaction captured via a Global Positioning System (GPS) receiver.

43. The method of claim 22, further comprising:

detecting fraudulent use of the financial transaction card.