Centralized authorization and fraud-prevention system for network-based transactions

• US 6,853,987 B1
• Filed: 10/27/1999
• Issued: 02/08/2005
• Est. Priority Date: 10/27/1999
• Status: Expired due to Term

• Current Assignee: Kioba Processing, LLC (IP Investments Group LLC)
• Original Assignee: Zixit Corporation
• Inventors: Cook, David P.
• Primary Examiner(s): Trammell, James P.
• Assistant Examiner(s): Worjloh, Jalatee
• Application Number:
  US09/427,968
• Time in Patent Office: 1,931 Days
• Field of Search: 705 64- 79, 705/26, 713/150, 713/200
• US Class Current: 705/75
• CPC Class Codes: G06Q 20/027 involving a payment switch or gateway
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/085 involving remote charge determination or related payment systems
• CPC Class Codes: G06Q 20/0855 involving a third party
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• CPC Class Codes: G06Q 20/12 specially adapted for electronic shopping systems
• CPC Class Codes: G06Q 20/3674 involving authentication
• CPC Class Codes: G06Q 20/382 insuring higher security of transaction
• CPC Class Codes: G06Q 20/3821 Electronic credentials
• CPC Class Codes: G06Q 20/3825 Use of electronic signatures
• CPC Class Codes: G06Q 20/383 Anonymous user system
• 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: G06Q 20/4012 Verifying personal identification numbers [PIN]
• CPC Class Codes: G06Q 20/4016 involving fraud or risk level assessment in transaction processing

Abstract

A system and method for authorizing certain aspects of network based transactions between a customer and a merchant is disclosed. The system utilizes an account code for identifying rights to use an account identified by an account number, and a database for storing the account number, account code, and a Signature Phrase. The Signature Phrase is stored when rights to use the account have been positively identified. The customer can complete an e-commerce transaction using the customer'"'"'s account by providing a Signature Phrase without the Signature Phrase or account code actually residing in the database or being provided to the merchant. The account code, account number, and Signature Phrase may be received through one or more external interfaces with the customer. In some embodiments, the database stores the account number, account code, and the Signature Phrase in a hashed format.

Claims

1. A method for authorizing transactions between a customer that is authorized to use an account and an e-commerce merchant, the method comprising:

confirming rights in the account by associating an account code provided by the customer with an account number associated with the account;

establishing a signature phrase for being used in a plurality of transactions;

linking the signature phrase to the account number for use in the transactions;

upon indication from a node associated with the e-commerce merchant that a transaction has initiated, providing an authorization form to a node associated with the customer, the authorization form being from a node associated with an entity separate from the e-commerce merchant;

receiving the signature phrase from the node associated with the customer through a customer response to the authorization form; and

extending rights to the account, normally only associated with the account code, to the signature phrase such that the customer can authorize the transaction made on the account using the signature phrase.

2. The method of claim 1 wherein the authorization form includes a transformation system to transform the signature phrase at the node associated with the customer, and wherein the interface receives the second account number and the second signature phrase in a transformed format.

3. The method of claim 1 further comprising:

creating a transaction certificate to memorialize a successful authorization.

4. The method of claim 3 wherein the transaction certificate may be provided to the network node associated with the e-commerce merchant to indicate successful authorization.

5. The method of claim 1 wherein the authorization form is provided to the network node associated with the customer through a network interface.

6. The method of claim 1 wherein the authorization form includes a customer-specific indicator previously provided by the customer to the entity, the customer-specific indicator being independent of the merchant.

7. The method of claim 1 wherein the authorization form includes a logo identifying the merchant.

8. The method of claim 1 wherein an entity other than the customer confirms the rights in the account.

9. The method of claim 1 wherein the rights in the account indicate account ownership.

10. A method for authorizing transactions between a customer and an e-commerce merchant, the method comprising:

receiving, at a credit card authorization system, commerce merchant information and a credit card number of a customer for a first transaction;

determining whether the credit card number corresponds to a credit card account in a credit card database;

creating an authorization form at the credit card authorization system for the first transaction;

displaying the authorization form to the customer via an internet browser;

receiving a first signature phrase from the customer indicating authorization for the first transaction;

verifying that the received signature phrase corresponds to a stored signature phrase in the credit card account;

transferring the internet browser of the user to a node associated with the e-commerce merchant;

receiving, at the credit card authorization system, e-commerce merchant information and a credit card number of the customer for a second transaction;

creating an authorization form at the credit card authorization system for the second transaction; and

receiving a second signature phrase from the customer indicating authorization for the second, transaction, wherein the first signature phrase and the second signature phrase are the same.