System, method and program product for account transaction validation

• US 7,347,361 B2
• Filed: 07/11/2006
• Issued: 03/25/2008
• Est. Priority Date: 06/13/2005
• Status: Active Grant

• Current Assignee: Robert Lovett
• Original Assignee: Robert Lovett
• Inventors: Lovett, Robert
• Primary Examiner(s): Kim, Ahshik
• Application Number:
  US11/484,081
• Publication Number:
  US 20060278698A1
• Time in Patent Office: 623 Days
• Field of Search: 235/380, 235/382, 235/383, 705/39, 705/44
• US Class Current: 235/380
• CPC Class Codes: G06Q 20/24 Credit schemes, i.e. "pay after"
• CPC Class Codes: G06Q 20/367 involving electronic purses or money safes
• CPC Class Codes: G06Q 20/385 using an alias or single-use codes
• 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

Abstract

A system, method and program product for account transaction validation which may be downloaded or otherwise installed on a networked computing device such as a cell phone or other networked computing device. The networked computing device provides an encrypted validation code to a merchant for each transaction. The validation code is uniquely computed for each transaction and may be based on transaction time and/or other transaction data. The code algorithm is unique for each cardholder. Only the bank transaction center has knowledge of the particular algorithm for each cardholder. When transaction details such as transaction dollar amount are included in the generation of the code, the code may be used to validate the reported transaction dollar amount. An algorithm is disclosed for generating a unique code based on time and/or transaction dollar amount.

Claims

1. A system for validating a financial transaction between a merchant and a customer comprising:

a personal computing device, said personal computing device comprising a code generating algorithm, said code generating algorithm generating an encrypted verification code based on a transaction amount for said financial transaction, and said encrypted verification code further based on a customer identity number verifying the identity of said customer;

said encrypted verification code generated using code generating parameters known to a transaction center, said encrypted verification code transmitted to said transaction center along with a customer account number and said transaction amount;

said transaction center comprising;

a computer, said computer comprising;

a database, said database comprising a plurality of accounts and associated code generating parameters unique to each account of said plurality of accounts relative to the code generating parameters for another account of said plurality of accounts, said code generating parameters protected from disclosure to said merchant, said plurality of accounts including a customer account designated by said customer account number; and

a validation algorithm, said validation algorithm utilizing said code generating parameters associated with said customer account together with said encrypted verification code to validate said customer identity number and said transaction amount for said financial transaction.

2. The system of claim 1, further including a first clock providing a first measurement of time at said personal computing device, and a second clock providing a second measurement of time at said transaction center, wherein said code generating algorithm further utilizes said first measurement of time to generate said encrypted verification code and said validation algorithm further utilizes said second measurement of time to validate said customer identity number and said transaction amount for said financial transaction.

3. The system of claim 1, further including a first clock providing a first measurement of time at said personal computing device, wherein said code generating algorithm further utilizes said first measurement of time to generate said encrypted verification code, said first measurement of time being communicated to said transaction center, and said validation algorithm further utilizes said first measurement of time to validate said customer identity number and said transaction amount for said transaction.

4. The system of claim 1, wherein said customer identity number is a personal identification number entered in said personal computing device by said customer.

5. The system of claim 1, further including a fingerprint reader in said personal computing device, and said personal computing device provides said customer identity number after said fingerprint reader correctly matches a fingerprint.

6. The system of claim 1, further including a means for said customer inputting an indication of a duplicate transaction, and said code generating algorithm further includes said indication of a duplicate transaction in the encrypted verification code.

7. The system of claim 1, wherein the length of the encrypted verification code is three or four characters.

8. The system of claim 1, further including card processing equipment at a site of said merchant, said card processing equipment being designed to handle credit cards having a fixed verification code, wherein said encrypted verification number is communicated to said transaction center using said card processing equipment.

9. The system of claim 1, wherein the account number, customer identity number, and code generating parameters are provided to the personal computing device via a communication network prior to said transaction.

10. The system of claim 1, wherein the account number, customer identity number, and code generating parameters are issued and activated using electronic communications, without requiring a physical plastic card embodiment.

11. A method for validating a transaction between a merchant and a customer comprising:

receiving an account number, a transaction amount, and a encrypted verification number at a transaction center;

retrieving a customer identity number and code generating parameters from a memory in accordance with said account number;

verifying said customer identity number and said transaction amount, by applying said code generating parameters to said customer identity number and said transaction amount to generate a result and comparing the result to said encrypted verification number;

said transaction amount having been provided to said customer by said merchant and entered into a computing device to generate said encrypted verification number, said encrypted verification number generated based on said customer identity number and said transaction amount, said encrypted verification number generated by a code generating algorithm having code generating parameters unique to said computing device relative to other code generating parameters in other computing devices, and said code generating parameters being known to said transaction center and protected from disclosure to said merchant;

said account number and said encrypted verification number having been provided to said merchant and reported to said transaction center for transaction validation.

12. The method of claim 11, wherein the account number is one from the group consisting of a credit card number, a debit card number, a bank account number, an account login number, and an automatic teller machine account number.

13. The method of claim 11, wherein the step of generating said encrypted verification number comprises the step of utilizing a time value in a calculation of said encrypted verification number.

14. The method of claim 13, wherein the step of utilizing a time value comprises the steps of:

reading a coded time value from a table of coded time values, said table of coded time values providing a known correspondence between a clock time and a corresponding coded time value corresponding to said clock time;

said table of coded time values being known to said transaction center and protected from disclosure to the public and to said merchant;

said table of coded time values being different from other tables of coded time values residing in said other computing devices; and

utilizing said coded time value to generate said encrypted verification number.

15. The method of claim 14, wherein the step of utilizing said coded time value comprises the steps of:

utilizing said coded time value as an index to find a selected multiplier value from a table of multiplier values, said table of multiplier values being known to said transaction center and protected from disclosure to the public and to said merchant;

said table of multiplier values being different from other tables of multiplier values residing in said other computing devices;

multiplying said transaction amount by said selected multiplier value to generate a computed number, and

utilizing said computed number in the generation of said encrypted verification number.

16. The method of claim 11, adapted to rapid transaction completion by including the steps of:

providing said account number to said merchant for validation to a credit limit before completing shopping activities;

completing said shopping activities while

waiting for approval of said credit card;

completing said transaction following the completing of shopping activities without further waiting for approval of said transaction.

17. The method of claim 11, further comprising the steps of:

determining that said transaction is for a value less than a predetermined amount limit;

providing said account number and said encrypted verification number to said merchant;

recording at said merchant terminal said account number, said encrypted verification number, and said time of transaction;

approving said transaction at said merchant terminal without approval from said transaction center, said approving being at a transaction approval time;

reconciling accounts between said merchant and said transaction center at a time after said transaction approval time by providing said account number, said encrypted verification number, and said time of transaction to said transaction center.

18. The method of claim 17, further including the step of:

determining that the number of transactions in a time interval that are less than said predetermined amount limit is less than a transaction count limit per said time interval.

19. The method of claim 18, wherein the predetermined amount limit is twenty five dollars, and the transaction count limit is ten, and the time interval is one day.