Systems and methods for financial transaction through card reader in communication with third party financial institution with encrypted information

• US 9,443,237 B2
• Filed: 03/06/2015
• Issued: 09/13/2016
• Est. Priority Date: 06/10/2009
• 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, James M., Wen, Xuancong, Dorsey, Jack
• Primary Examiner(s): Le, Thien M
• Assistant Examiner(s): TAYLOR, APRIL ALICIA
• Application Number:
  US14/641,080
• Publication Number:
  US 20150178704A1
• Time in Patent Office: 557 Days
• Field of Search: 235/375, 235380-382, 235/435, 235/439, 235/449, 235/492
• US Class Current: 1/1
• 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. Encrypted information is sent to the third party payment system authorizing a financial transaction.

Claims

1. A payment system, comprising:

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

a housing;

a read head positioned in the housing, the housing including a slot to allow reading of a financial transaction card and producing a signal indicative of data from the financial transaction card;

an encryption system configured to encrypt at least a portion of information associated with the signal;

an ID circuit configured to provide a unique ID to the mobile device;

a control unit configured to transmit a control signal to a pathway subsystem circuit to selectively couple one of the encryption system and the ID circuit with a communication port of the mobile device; and

a transaction engine of the mobile device, that in operation;

communicates at least a portion of information derived from the encrypted information to a third party payment system associated with a buyer'"'"'s financial account,

initiates, in response to the third party payment system at least partially authorizing a financial transaction, a transfer of funds from the buyer'"'"'s financial account associated with the financial transaction card to an account of a merchant associated with the card reader, and

provides for communication of at least a portion of transaction information to the buyer.

2. The payment system of claim 1, wherein the ID circuit is communicatively coupled with the transaction engine.

3. The payment system of claim 1, wherein the third party payment system is configured to provide the buyer with a receipt for the financial transaction.

4. The payment system of claim 1, wherein the transaction engine uses environmental information of a transaction location to assess a risk associated with the transaction.

5. The payment system of claim 4, wherein the mobile device provides Global Positioning System (GPS) information that is used to determine if a location of the transaction is in a high crime risk area.

6. The payment system of claim 5, wherein in response to the GPS information, a risk is associated with the transaction.

7. The payment system of claim 1, wherein the third party payment system provides the buyer with coupons or other promotional offers made by vendors.

8. The payment system of claim 1, wherein the communication port of the mobile device comprises an audio port.

9. A card reader configured to be coupled to a mobile device, the card reader including:

a housing;

a read head positioned in the housing, the housing including a slot for allowing reading of a financial transaction card for producing a signal indicative of data from the financial transaction card;

an encryption system configured to encrypt at least a portion of information associated with the signal;

an ID circuit configured to provide a unique ID to the mobile device;

a control unit configured transmit a control signal to a pathway subsystem circuit to selectively couple one of the encryption system and the ID circuit with a communication port of the mobile device; and

a transaction engine of the mobile device, that in operation;

communicates at least a portion of information derived from the encrypted information to a third party payment system, and

authorizes, in response to the third party payment system, a financial transaction from a buyer'"'"'s financial account to an account of a merchant associated with the card reader.

10. The card reader of claim 9, wherein the communication port of the mobile device comprises an audio port.

11. The card reader of claim 9, wherein the ID circuit is communicatively coupled with the transaction engine.

12. The card reader of claim 9, wherein the third party payment system is configured to provide the buyer with a receipt for the financial transaction.

13. A method of payment, comprising:

establishing a connection between a card reader and a mobile device, the card reader including an encryption system configured to provide encrypted information from at least a portion of information relative to a transaction between a buyer and a merchant and an ID circuit configured to provide a unique ID to the mobile device;

in relation to a financial transaction between the buyer and the merchant, conveying at least a portion of the encrypted information from the card reader to the mobile device using the encryption system, wherein a control unit is configured to transmit a control signal to a pathway subsystem circuit to selectively couple one of the encryption system and the ID circuit with the mobile device;

communicating at least a portion of the encrypted information to a transaction engine of the mobile device; and

communicating at least a portion of information derived from the encrypted information to a third party payment system associated with a buyer'"'"'s financial account.

14. The method of claim 13, wherein the pathway subsystem is configured to relay signals from the encryption system to an audio port of the mobile device.

15. The method of claim 13, further comprising:

communicating the unique ID of the card reader to the third party payment system.

16. The method of claim 13, further comprising:

providing the buyer with a receipt for the financial transaction.

17. The method of claim 13, further comprising:

using environmental information of a transaction location to assess a risk associated with the transaction.

18. The method of claim 17, further comprising:

providing Global Positioning System (GPS) information to determine if a location of the transaction is in a high crime risk area.

19. The method of claim 18, further comprising:

determining a risk associated with the transaction.

20. The method of claim 13, further comprising:

providing the buyer by the third party payment system with coupons or other promotional offer.