System and Method for Secure Transactions

• US 20080126262A1
• Filed: 11/29/2006
• Published: 05/29/2008
• Est. Priority Date: 11/29/2006
• Status: Abandoned Application

• Current Assignee: Lucent Technologies, Inc. (Nokia Corporation)
• Original Assignee: Lucent Technologies, Inc. (Nokia Corporation)
• Inventors: Brady, Colin, Rajan, Govinda
• Application Number:
  US11/564,408
• Publication Number:
  US 20080126262A1
• Time in Patent Office: Days
• US Class Current: 705/75
• CPC Class Codes: G06Q 20/04 Payment circuits
• 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 20/355 Personalisation of cards for use
• 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 20/401 Transaction verification
• 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 system and method for conducting secure transactions are disclosed. The system includes a transaction card having a self-programming region for periodic update of a verification code, a server used for authenticating the card, and a network for transmitting data between the transaction card and the server. The method includes transmitting a current verification code and a current timestamp from the card to a transaction clearinghouse. Authentication of the transaction card is done by comparing the current verification code received and a reference verification code generated by the server, and a decision is made by the clearinghouse whether to approve the transaction.

Claims

1. A system for secure transactions, comprising:

a transaction card having a self-programming region configured for periodic update of a verification code;

a server comprising a means for authenticating a transaction based on the periodically updated verification code; and

a network for transmitting data between the card and the server;

wherein track bit patterns are disabled during the verification code update such that a card read during verification code update causes a read error and not a validation failure.

2. The system of claim 1, wherein the transaction card further comprises a processor coupled to a power source, the processor having an algorithm for computing the verification code at predetermined time intervals and communicating with the power source for updating the verification code in the self-programming region.

3. The system of claim 2, wherein the self-programming region comprises:

at least one self-programming component configured to receive an electrical current from the power source in two directions, the at least one self programming component having a first orientation associated with one current direction and a second orientation associated with the other current direction.

4. The system of claim 3, wherein the at least one self-programming component is one of an electromagnetic coil and a magnetic random access memory element.

5. The system of claim 2, wherein the transaction card further comprises a magnetic stripe and the self-programming region is operatively coupled to the magnetic stripe.

6. The system of claim 5, wherein the self-programming region comprises at least one electromagnetic coil for encoding the verification code on the magnetic stripe.

7. The system of claim 2, wherein the algorithm comprises a pseudo-random number generator.

8. The system of claim 4, wherein the at least one self-programming component is an electromagnetic coil configured to operate in a magnetic stripe emulator mode.

9. A method for conducting a transaction, comprising:

initiating a transaction request by presenting a transaction card having a current verification code, the current verification code being updated by a self-programming region of the transaction card at predetermined times;

transmitting a card identification number and the current verification code to a transaction clearinghouse;

comparing the current verification code received by the clearinghouse with a reference verification code generated for the transaction card by a server at the clearinghouse; and

deciding whether to approve the transaction request based on whether a match exists between the current verification code and the reference verification code;

wherein track bit patterns are disabled during the verification code update such that a card read during verification code update causes a read error and not a validation failure.

10. (canceled)

11. The method of 10, wherein the current verification code is computed by executing an algorithm residing on the transaction card and the algorithm comprises a pseudo-random number generator.

12. The method of 11, wherein the algorithm further comprises the current time as a parameter for computing the verification code.

13. The method of 11, wherein the reference verification code is generated by the server at the clearinghouse using a copy of the algorithm.

14. The method of 11, further comprising:

generating the reference verification code at the time of receiving the transaction request.

15. The method of 11, further comprising:

prior to receiving the transaction request, generating a plurality of the reference verification codes corresponding to the predetermined times;

storing the plurality of the reference verification codes in a database at the clearinghouse; and

retrieving the reference verification code corresponding to the current time.