WO1991013411A1

WO1991013411A1 - Method for handling cash or other confidential information electronically

Info

Publication number: WO1991013411A1
Application number: PCT/FI1991/000052
Authority: WO
Inventors: Matti Villikari
Original assignee: Matti Villikari
Priority date: 1990-02-21
Filing date: 1991-02-19
Publication date: 1991-09-05
Also published as: FI900865A0; FI88222B; FI88222C; FI900865A; AU7315691A; EP0524186A1

Abstract

The present invention relates to a method and a system for handling cash or other confidential information electronically, where the information is transferred electronically through a smartcard (4) or a similar device with programmable memory. In order to provide a new and secure handling method based on smartcards, the transfer of funds or data to or from the smartcard (4) is registered with the aid of a separate transacting device (6) associated and communicating with each smartcard as its own pair, in which information about funds or information transfers via the smartcard (4) is stored.

Description

Method for handling cash or other confidential information electronically

This invention concerns a method for handling cash or other confidential information electronically, where the information is transferred electronically through a smart¬ card or a similar device with programmable memory.

The current payment methods that correspond to cash are coins and notes, checks, bank bills and other documents entitling to pεyment. In many countries, also bank and postal cheque services and bank and credit cards are known.

Also well known are value cards (prepaid cards) for automatic charging devices.

The most advanced and flexible payment means would be cards containing cash in electronic form, ie. smart¬ cards (ic cards). The technology for such cards already exists, but so far a money purse system that could be clas¬ sified as a general payment system is not yet used in any countr . The following drawbacks and usage bars have ac. b«en seen to be connected with electronic purse systems:

- si.artcard payment operations with current methods are possible only with devices supplied by the organiiaticn providing the service, eg. with payment terminals. - insufficient security solutions. If the smartcard is lost cr stolen, the owner loses the cash loaded into it as well.

- narrow infrastructure - places to make payments are too few, and payment between individuals is not possible.

- lack of information for the payer - the amount of cash loaded should be as easy to check as checking cash in the purse.

The purpose of this i.-vention is to achieve a deci¬ sive improvement over tne drawbacks et forth above. To achieve this effect, the method of the invention is charac- terized by that the transfer of funds -r information to or from the smartcard is registered with the aid of a separate transacting device associated and communicating with each smartcard as its own pair, in which information about funds or information transfers via the smartcard is stored. The system according to the present invention for handling cash or other information to be protected electro¬ nically, based on an electronically programmable smartcard or equivalent, is characterized by that the system consists of the smartcard and of a transacting device operating as its own pair, into which the sr^rtcard is insertable in order to effect electronic transfer of funds or information between the smartcard and the transacting device.

One preferred embodiment of the system according to the invention is characterized by that the smartcard and the transacting device associated with it have an essen¬ tially similar logic, so that the logic part of the trans¬ acting device consists essentially of a duplicate of the smartcard.

The most important benefit of the invention is a more secure and more easy-to-use payment method than cash both for the payers and for the receivers of payment. As an advantage of the invention can also be held the presumption of fast acceptance, since it does not require retailing shops to change their cashier systems. The invention is described below in more detail with the aid of examples by reference to the attached drawings, in which figure 1 shows the smartcard reader device used in the invention in actual size, figure 2 shows the basic parts of the system accord¬ ing to the invention seen from above, figure 3 shows the parts of figure 2 as seen from a side view, figure 4 shows schematically the registers of the smartcard. The invention thus concerns such an electronic pay¬ ment method and system, where a card or equivalent provided with its own logic is used. Generally, these cards has been called intelligent cards or transaction cards. Further denominations in English are Smart Card, IC Card and Chip Card. The card can be used as a cash payment means, because it contains up-to-date information about the owner's cash funds, which can be maintained in a payment transaction situation. Usually, this kind of payment and cash transac- tion service is supplied by an organization which is in close cooperation with banks and possibly with credit card companies, using their distribution network.

Cash can be loaded and unloaded at automatic teller machines (ATMs) which are equipped with smartcard readers and which are programmed with the functions required for handling electronic funds. Also the working stations and data transfer services can be provided with programs to support transfer of electronic funds. A connection to the account system of the bank can also be accomplished with the aid of the so called telebanking exchange connections. A prerequisite for using a smartcard in an ATM is that the card owner has a bank account and -card activated for usage with ATM. The bank card information and the per¬ sonal identification number (PIN) are stored in connection with the delivery of the card on the safety area of the smartcard. Of course, the smartcard can act itself as a bank card.

The electronic cash handling system according to the invention thus consists in addition to the smartcard 4 of a transacting device 6 operating as its own pair, into which, as is shown in figures 2 and 3, the smartcard is insertable in order to effect electronic transfer of funds.

The transacting device 6 contains a display 1, a numeric keyboard 2 and a function keyboard 3 of the trans- acting device. Additionally, the transacting device has a changeable battery and a clock and calendar, which are needed for the maintenance functions. With the calculator¬ like transacting device it is thus possible to read the smartcard, to give commands to the smartcard in order to make and receive payments, and to perform other functions as well, such as calculator and calendar operations.

According to figures 2 and 3, the logic of the transacting device 6 consists essentially of a duplicate 5 of the smartcard 4, whereby a complete copy of the data in the smartcard can be easily stored in the logic of the transacting device. The transacting device 6 and the smart¬ card 4 operates as a pair in order to make payment possible only when both are in use. This feature has the consequen¬ ce, that when one part of the pair is lost, the service supplier can transfer the funds from the part left back to the client's account, and invalidate the half without a pair. For this reason, the card 4 is not kept continuously in the transacting device 6, but separately for instance in a wallet, like a regular bank or credit card. The smartcard 4 is the actual operational card, with the aid of which the communication with the service sup¬ plier's network can be handled, upon loading or unloading funds and when making payments to other transaction devi¬ ces. The smartcard 5 is situated inside the trarsacting devics in a fixed fashion. The smartcards 4 and 5 communi¬ cate with each other through readers 4a and 5a. The infor¬ mation exchange between the cards is crypted. External communications may be performed also with the aid of the transacting device's serial port 7. The figure 4 is a schematic presentation of the registers in the smartcards 4 and 5, which are used in funds transfers. In the following, a description of dif¬ ferent payment and transfer actions is given with reference to this figure and, if necessary, to figures 1-3. Withdrawing cash from an ATM The client inputs his smartcard into the ATM and the pin- number (Personal Identification Number) associated with it. The ATM reads in a known way the bank card information stored in the safety area of the smartcard's 4 (figure 4) register 9a, and performs the withdrawal operation as when processing cash withdrawal. Instead of giving notes, the ATM transfers the amount to the smartcard's 4 "activated funds transfer" field 10a situated in the safety area. The ATM performs a funds transfer, which debits the customer's account and credits the service supplier's electronic money transfer account (bound account). When the smartcard is thereafter inserted in the transacting device 6, the smart¬ card 5 first checks that the smartcard 4 is its own pair by comparing the PIN and other identification data stored in the registers 9a and 9b. The balance information in the re¬ gisters 11a and lib are also compared. Then the smartcard 5 reads the field 10a and notices that there is an activa¬ ted cash amount. The amount data is copied to field 10b in card 5. After this, the amounts in the fields 10a and 10b are added to the balance fields 11a and lib, and it is checked that the balance of both cards are equal. If they are, the transfer is accepted and the balance and possible transaction logs are updated and the fields 10a, 10b are cleared. Transaction log

The smartcard 4 and the account associated with it can thus be in any bank that is connected to the ATM network. A "normal" transaction is entered to the ATM network. For the accountkeeping account it makes no difference whether the notes have been withdrawn or funds have been loaded to the card. The accountkeeping bank handles the inter-bank clearing etc. like cash had been withdrawn.

A smartcard customer can choose to have a transac¬ tion log function associated to his cash handling system. The function is similar to a passbook, ie. all transactions are logged. Logged information include for instance time, explanation text and the amount. The log can be continuous showing for instance the 50 latest transactions, or it can be transferred to other systems for uploading. It is also possible to have the transaction log printed out by the printer in the ATM.

Payment The smartcard 4 is inserted in the card terminal of the transacting device 6 and the amount of the payment is keyed in. For the payment order, the pin number of the smartcard must be entered. After this, the payment is activated in field 10a of card 4, which means that the balances both in the smartcard 4 and the transaction device 6 have been reduced, and that the amount now can be transferred to the transaction device of the receiver. The transaction can also take place via a data transmission link by connecting the transacting device via its serial port 7 to a computer provided with data transmission software. Receiving payment The smartcard 4, having been activated with the amount to be transferred, is given to the receiver of the payment, which inserts the smartcard 4 into his own transacting device 6. The payment's receiver can now with a simple command transfer the amount to his own transacting device. In addition to the amount, the name of the receiver is transferred to the card of the payer, and the name of the payer is transferred to the transacting device of the re¬ ceiver. This information is used for maintaining the trans¬ action log, if the user has defined such in his transaction devi e.

Cancelling payment If the payment is to be cancelled before the transfer to the receiver has taken place, the activated amount can be pulled back by inserting the smartcard 4 into its own transacting device 6 and acting like receiving a payment from a foreign card. If the amount already was transferred to the receiver's device, the procedure of the reversal is the one of normal payment. Transfer from card to own account

Funds can be transferred from the smartcard 4 to ones own account by entering the amount to be transferred in the transaction device 6 and by issuing a transfer command. The function is similar to the payment routine. When the amount to be transferred has been activated, the card is inser¬ ted to an ATM, and the function "transfer to account" is chosen. The ATM makes an account transfer operation in the bank's payment exchange system, in which the electronic funds transfer account is debited and the bank account whose number is defined on the smartcard's safety area is credited. Alternatively, the serial port can be used. An uploading to a bank account can be made by data transfer as well.

National balancing clearing The benefit of the service supplier and the banks in funds transfer happening via smartcards is that the transactions of the smartcard customers will be forwarded through ex¬ change accounts of the service supplier's banks, to which, on average, the capital available to the bank is accumu- lated (float). Balancing clearing means clearing the ser¬ vice supplier's accounts daily in various banks in the same country. A balancing clearing program in the bank's central computer writes daily a payment order (check) from the service supplier's account in each payer's bank, which is refunded to the service supplier's account in the redemp¬ tion bank (the bookkeeping bank) and cleared normally in accordance with the practice of each country and bank.

Payment with foreign currency In order to pay with foreign currency, the payer must with- draw currency of the country in question to his smartcard/- device from an ATM located abroad. Withdrawal is possible only in those banks and ATMs, where withdrawal of cash with the payer's bank card is possible. In this way the withdra¬ wal is routed to the payer's account like making currency cash withdrawals. In order to avoid the national balancing clearing in connection to withdrawal of foreign currencies, the service supplier's account is credited only in one bank in the country in question. From this account, all curren¬ cy based payments in the country are redeemed. With the exemption of the currency conversion, the principles of operation are the same as when loading one's domestic cur¬ rency.

Security The question of security is the foundation-stone of all the operations of the transacting device. The issue is just as important as that notes should be difficult to falsify. The security of the transacting device is based on both physi¬ cal and logical protection qualities of the smartcards on one hand and the fact that the service supplier has the possibility of controlling the state of the smartcards in the network with automatic (and secrc-.-;) checks the other hand.

All message transferring between the different units is crypted with private algorithms, which are controlled only by the service supplier.

The system mentioned above can be used for instance in access control or in the storage and forwarding of per¬ sonal data (medical- and authority files). For example, the checking of a person's identity and access authoriza- tion within an access control system is easy with the aid of transaction devices carried by the guards.

It is clear for one skilled in the art that the different embodiments of the invention are not limited to the examples presented above, but they can vary within the claims enclosed herewith.

Claims

1. A method for handling cash or other confidential information electronically, where the information is trans- ferred electronically through a smartcard (4) or a similar device with programmable memory, characterized by that the transfer of funds or information to or from the smartcard (4) is registered with the aid of a separate transacting device (6) associated and communicating with each smartcard as its own pair, in which information about funds or in¬ formation transfers via the smartcard (4) is stored.

2. A method according to claim 1, characterized by that in order to effect a payment transaction, the smart¬ card (4) is inserted in'co the transacting device (6), the loading field (10a) of the smartcard's (4) memory is ac¬ tivated with the aid of the transacting device in order to hand over a cash amount, the smartcard is removed from the transacting device and inserted in an ATM or a correspond¬ ing system or into a transacting device (6) associated with another smartcard, and the account transfer is performed with the aid of the transacting device into which the smartcard (4) is inserted.

3. A method according to claim 1 or 2, characterized by that in a collection operation, the smartcard (4) is inserted into an automatic tellei machine or a correspond¬ ing system or into a transacting device (6) associated with another smartcard, and the cash amount is hand over to the loading field (10a) of the smartcard's memory.

4. A method according to claim 2 or 3, characterized by that the smartcard (4) after each transfer operation is pushed into its own transaction device (6) for an update of balance data and for clearing of the loading field (10a).

5. A system for handling cash or other information to be protected electronically, which is based on an elec¬ tronically programmable smartcard (4) or equivalent, cha¬ racterized by that the system consists of the smartcard (4) and of a transacting device (6) operating as its own pair, into which the smartcard is insertable in order to effect electronic transfer of funds or information between the smartcard (4) and the transacting device (6).

6. A system according to claim 5, characterized by that the smartcard (4) and the transacting device (6) as¬ sociated with it have an essentially similar logic, in order to facilitate storage of a copy of the data of card (4) to the transacting device (6).

7. A system according to claim 6, characterized by that the logic part of the transacting device (6) consists essentially of a duplicate (5) of the smartcard (4).