WO2002058018A2

WO2002058018A2 - Payment method, and payment system with pay card used therewith

Info

Publication number: WO2002058018A2
Application number: PCT/NL2002/000043
Authority: WO
Inventors: Haissam Malas
Original assignee: Haissam Malas
Priority date: 2001-01-19
Filing date: 2002-01-18
Publication date: 2002-07-25
Also published as: AU2002230263A1; WO2002058018A3; WO2002058017A1; WO2002058018B1

Abstract

Payment method for transferring money from and to a pay card of a payment system, wherein a client purchases a prepaid pay card at a bank for a certain amount of credit money in any currency, wherein an activation number and a card number are assigned by the payment system to the pay card, and wherein, before activation of the card by the bank, said amount of credit money is transferred into a payment system related account at the bank, and wherein the pay card is used by the client through a terminal, in connection with the payment system, to perform a money transfer transaction. In addition to activation number and card number a secure pin code number is assigned to the pay card. Payment system for transferring money from and to a pay card of a payment system to be used in connection with one or more prepaid pay cards of one or more clients, comprising a central transaction server for distributing money transfer transactions, which server is connected to a pay card authorize transaction means for activating and deactivating, through a terminal, of pay cards purchased at related banks, and to an electronic pay server for handling money transactions for the client through a payment system terminal or internet terminal. Pay card to be used with above method and system.

Description

Payment method, and payment system with pay card used therewith.

The invention relates to a payment method for transferring money from and to a pay card of a payment system. The invention also relates to a payment system and to a pay card to be used in above-mentioned method.

Such a method, system and card are known in the art. Such a method makes use for example of credit cards like VISA or American Express. The problem with such a method and system is that an existing personal bank account is required for a client or similar party who wants to use such a credit card. Furthermore once a client acquires such a card, said card is specifically related to the identity of the client holding the existing bank account.

Yet another problem in the known payment method and system with a credit card is that the majority of consumers around the world are not credit card holders who on the whole are selected people. Banks and or credit card companies in fact use a process of selection before a person is admitted as a credit card holder.

The invention aims to obviate above problems and to provide a method and a system of the above-mentioned type, in which for a client utilizing above method and system there is no requirement both to have an existing personal bank account and to present his or her personal identity during the acquisition of the related card and during further money transactions with said card, and which thereby will offer equal opportunity to all people enabling them to use credit cards for secure payment transactions around the world.

This objective according to one aspect is obtained in accordance with the invention with a method of the above-mentioned type, wherein a client or similar party purchases a prepaid pay card at a related bank or similar selling point for a certain amount of credit money in any currency, wherein an activation number and a card number are assigned by the payment system to the pay card, and wherein, before activation of the pay card by the bank, said amount of credit money is transferred into a payment system related account at the bank, and wherein the pay card is used by the client through a terminal, in connection with the payment system, to perform a money transfer transaction.

The above objective according to another aspect is obtained in accordance with the invention with a payment system of the above-mentioned type, which comprises a central transaction server for processing of money transfer transactions, which server is connected to a pay card authorize transaction means for activating and deactivating, through a terminal, of pay cards purchased at related banks or similar selling points, and to an electronic pay server for handling money transactions for the client(s) through a payment system terminal or internet terminal.

As indicated above, the present invention makes it possible for a client or similar party to use his or her payment system prepaid pay card through internet e.g. without being required to possess an existing personal bank account or to reveal his or her identity or give personal data when buying or using said card. There is no chance in this system of getting overcharged as the system will allow the client to perform money transactions to the maximum of the cash money the card is bought for, or to the maximum of credit available to the card. A further advantage is that at the end of the month or year there are no monthly or annual bank fees to be paid, as is the case with the known credit card system. In the present payment system of the invention, cards are requested generally in a batch by an affiliated bank or similar selling point. Said cards may be distributed by a transportation means to said bank(s). Such a batch will be generated by the system together with the associated variables for each card like card activation number; card number including bank code- or identity number, amount of credit money presented by the card, and its currency; card pin code number; and such-like. The card related variables or parameters, at the start, are in an inactive state in the database of the payment system.

Once a customer or client has bought or purchased a prepaid credit or pay card for a certain amount of credit money in a certain currency, the bank first will have to activate said card within the payment system. In general the bank is supplied with a payment system bank account in its organization. In order to activate a card, a bank representative will have to login into the payment system, thereby using e.g. a password previously provided by the payment system to the bank. The payment system will perform a security check towards the bank and, if this check is successful, a login screen will appear. A menu is displayed with an option for activating cards and only cards having activation card numbers that were supplied with a batch to the bank can be activated. An activation card number is then offered to the internal payment system process, which encrypts said activation card number with the same routine that is used for generating the activation card numbers. The database is accessed with the encrypted activation card number. If the numbers match and the bank code or identity is valid and the card was not activated yet, a "true" signal will be given to the program, which then activates the card. An affirmative signal is sent back to the bank. In this procedure of activation, also a signal will be passed from the bank to the payment system that the credit money for this card is transferred into the related payment system account at the bank. From this moment on, the pay card is activated and can be used by the client.

Another way of activation can be by means of a magnetic strip terminal reader at the bank. Passing the pay card through the terminal reader will send a signal to the central transaction server of the payment system. After a check of the data of the pay card within the system, an affirmative signal is sent back to the bank.

In order to perform money transactions with such a card, a validation of the card is required. For this validation, a check is performed whether the card number is a valid number and a check is performed whether the card number and pin code number are a valid combination. The pay card number is provided in readable form on the card on the outside. Said card number is a composite number, which may consist of the following: bank or identity code, currency code, initial money value of the card, and actual serial number.

In addition to said number, a pin code number is supplied to the client. Said pin code number or personalized secure number can be supplied in the form of a "scratch- off window" on the back of the card or can be told to the client which has to memorize it for further use. If required, the pin code number can be changed later by the payment system e.g. through a secure page on an internet terminal connected to the present system. The system and method according to the invention provide both customers or consumers and merchants or vendors with a payment tool which can be used for online/offline activities. The present system and method will enable customers around the world to buy any product or service in a secure and an anonymous manner. The system can provide the customers with its unique money transfer service and people around the world are able to transfer money from and onto the payment system pay card, provided it is the same currency. All those actions are performed within the system of the invention and the data related to any transaction are stored in present system in the central transaction server. The invention will be explained on the basis of an exemplary embodiment of the present system and associated method with reference to the drawings, in which:

Figure 1 shows a functional diagram of the payment system according to the invention; Figure 2 shows a flow diagram of the steps for a client to obtain a prepaid pay card of the payment system;

Figure 3 shows a flow diagram of the interactions between a client and a merchant or vendor through the payment system;

Figure 4 shows a flow diagram of the interactions between two pay card holders through the payment system; and

Figure 5 shows a flow diagram of the interactions between a client and an affiliated teller machine through the payment system.

The system shown in Figure 1 comprises a central transaction server 1 acting as a transaction processing and distribution center. Each type of transaction is determined and passed through the appropriate process for handling said type of transaction. The following number of means are connected to the central transaction server 1 : the electronic-pay (E-pay) server 2, the internal transfer means 3, the transaction logging means 4, the card authorize transaction means 5, the money transfer means 6, the temporary stored transaction means 7, the tracking and tracing device 9, the encryption device 10, the bank management means 11, and the merchant management means 12. A terminal 13 can be connected to each of the means 2 through 7. Said terminal 13 can either be an online internet terminal or an offline system terminal like a telephone, a mobile phone or a reader terminal.

An important component is the electronic-pay server 2 which accepts and handles requests for payments through the system. The server program runs in a secure environment and can only be accessed from other secure environments. It is capable to handle multiple requests concurrently. Every request through this server will be logged and validated.

The E-pay server 2 for example can handle a payment from a client to another party like a vendor or merchant, or a payment from a merchant to a client. All requests are inputted through the E-pay server via a payment system terminal (like a telephone, a mobile phone or a reader) or via a normal internet terminal. The transactions associated with these requests are first validated by the E-pay server and subsequently passed through the central transaction server.

A further component connected to the central transaction server 1 is the internal transfer means 3. This means is used for transferring credit money or funds from one pay card to another. This transaction can be performed via a payment system terminal or via the internet website, both in a secure environment. Only pay cards having the same currency can be used here.

The card number and the pin code number of the forwarding or source card and the card number of the destination card, have to be entered into the system. Said numbers will be validated by the payment system for each card per se. After the validation, the amount of money presently left on the source card is displayed. The client can then enter the amount of money to be transferred from the source card to the destination card. Affirming the entered value results in transfer of the money.

A further component connected to the server 1 is the transaction logging means 4. This logging means 4 is apart from the central tracking and tracing device 9. The transaction logging means is used to store information supplied for E-pay transactions. This means also enables clients to check E-pay transactions and card-to-card transactions. All transactions will have a "unique" transaction number which is directly related to the internal card number and which is stored. Thereby, any transaction associated with a certain card can be accessed. For example, all E-pay transactions, money transfers and cashing withdrawal transactions are stored. Existing guidelines are used to determine the period of time the information is archived and kept in a database.

On demand a client or customer is able to check his previous transactions in the system. Via an internet terminal, a secure HTML page for example is presented in which the card number and pin code has to be filled in. When the card data matches, the client will be able to check previous transactions by browsing through the history. It is obvious that also the present card balance can be presented and displayed after a validation check.

A further component, which is connected to the central transaction server 1, is the card authorize transaction means 5. This means is responsible for the activation and deactivation of cards by affiliated banks and similar selling points.

Such a bank or selling point is supplied with a corresponding account in the payment system. As explained before, a pay card can be activated through bank representatives who will login into the system. A security check is performed by the payment system towards the bank and, when this check is successful, the login screen will appear. Subsequently the activation by the representative as already described will be performed. All stages of this card activation are logged. From the same position in the bank, it is possible to render the card inactive or to revoke it. In case of loss of transferred data, such as activation card numbers, card numbers, pin code numbers or theft of cards, the bank or selling point representative is able to revoke the cards or render them inactive. All stages of card revoking are logged in the tracking and tracing device 9. Still a further component, which is connected to the central transaction server 1, is the money transfer means 6. Up to now, money transfer transactions by a client or similar party to another party like a merchant or from cardholder to cardholder have been described. There are also, however, transactions from bank to bank accounts per se. That means transactions for the transfer of money, e.g. for bookkeeping actions, between accounts of two or more banks which per se are introduced into the payment system.

A further important component in the payment system, which is connected also to the central transaction server, is the tracking and tracing (logging) device 9. In the above is already described the transaction logging means 4 specifically related to transaction loggings related to a card. Besides this transaction logging, there is a requirement within the system to trace any basic action. This tracking and tracing device is for internal use by the payment system only. All loggings are pay card related and provide a chronological view of any action at what time and from which process. The types of loggings are pre-defined and are used by all components within the system. Said log records are produced via special log application program interface (log-API). This log-API can be called up from any component within the system.

Parameters for the log- API may consist for example of card number, logging type, logging description, date/time of creation, status, amount of money involved, related transaction number (if available), affiliated bank or selling point, bank representative, and merchant. The log application program interface will provide a unique log number for every record that is produced in the log database 9.1. Passing these parameters to the log-API will provide enough information in order to give a complete chronological view of actions and transactions on a pay card. For example within the tracking and tracing device 9 the following parameters can be introduced for viewing and reporting purposes: card number, transaction number, date/time, and logging type. By entering one of these parameters, logging records can be viewed on a screen chronologically and can be zoomed in on transaction level.

A further component, which is connected to the central transaction server 1, is the encryption device 10. This device will ensure that data, related to a card and ofa private nature, is stored in the payment system database in a secure way such that misuse thereof is virtually impossible. All sensitive data, which is also directly readable to the outside world, is encrypted before it is entered into the database.

The encryption device provides an application program interface for encryption and decryption of specified data. Depending on the type of data offered to this device, a different key is used to perform the encryption and decryption. Also such a key can be date related. The encryption and decryption algorithm cannot be used directly but can only be accessed from components within the system. This is to prevent the use of this device for generating encrypted numbers in a manual way or any other way.

The encryption device uses various parameters in dependence on the data to be encrypted or decrypted. Said parameters are for instance: type of encryption/decryption transaction like card generation, pin code generation, transaction information, logging information, and password generation; time and date; the data that is to be encrypted/decrypted; and the action to be performed (encrypt/decrypt).

A further component of the payment system of the invention is the relation management sub system 14 responsible for the storage and handling of name and address information in general. Such a relation can be a company, like a bank or similar selling point possibly together with its representative, and a merchant or vendor or similar party in connection with a related bank.

Part of the relation management sub system is the bank management means 11 in which the bank related information used for transaction and authorization purposes is stored. For transaction purposes directly related to the bank, the present payment system has a payment system bank account number at the affiliated bank. This bank account number is used to transfer money from pay cards to the same bank or to a merchant having an account number in this bank or in any other affiliated bank. The payment system bank account at said bank will be used for depositing the funds received by clients buying cards. It is also possible that depending on the type of transaction, different accounts are used by the payment system and the affiliated bank.

In order to know which bank transactions are performed in the payment system, the system has to know the internal account or identity number for the bank. This account number or identity is used for validation both by the transaction management and by the card requesting procedure. With this internal account number or identity number the payment system can determine which bank it really is.

It is clear that in dependence on the type of transaction performed by the payment system, different payment system bank account numbers are used. The system will register those bank account numbers that are related to a certain type of transaction.

A further part of the relation management sub system is the merchant management means 12, in which the merchant related information used for transaction and authorization purposes is stored. An important advantage of the system is the use of the present card as a prepaid pay card by a client who stays anonymous and can perform secure payment transactions through internet e.g. around the world.

In order to perform a transfer of money from the pay card through the payment system account at the affiliated bank to a merchant or similar party for services rendered, it is necessary that said merchant has a bank account number in an affiliated bank. Therefore, the payment system is able to recognize in which affiliated bank a merchant has his bank account number in order to make a transaction. The payment system will then take care that the money destined for the merchant is transferred from the payment system bank account into the merchant bank account number. For a return transaction, the same routine is used. In this case money is transferred from the merchant bank account into the payment system bank account at the affiliated bank.

It is also possible that, depending on the type of payment system transaction, two different merchant bank account numbers are used. Namely, a merchant account number to which money is transferred from the payment system related account, and a merchant account from which money is transferred back to the payment system related account at the affiliated bank.

With reference to Figure 2, the steps will be explained when a client or customer wants to purchase a prepaid card to be used in the system of the invention. A client goes to an affiliated bank to buy a prepaid pay card of e.g. $ 50.-. The affiliated bank activates the card through a magnetic strip reader, which is connected through the card authorize transaction means 5 to the central transaction server 1 (step 21). The central transaction server 1 checks the data of the affiliated bank along with the card number and its data, and then returns the confirmation for activation or approval signal (step 22).

The card is now ready for use (step 23).

It is clear that only affiliated banks are connected to present system, each affiliated bank having its own internal identity or reference number in the payment system. Said affiliated banks are authorized to allow their merchants or vendors to honour and accept the method of the invention as a method of payment. The bank is able to open accounts and to generate its numbers, which are originated from the system of the invention. One of the more important transactions handled through the system of the invention is a buying action when a client wants to purchase an item from a merchant or vendor. Figure 3 shows the flow diagram ofa number of steps involved in such a transaction.

In step 31, a client wants to buy an item, such as a book, from a merchant's site for e.g. $ 19.95. He accesses the site via an internet terminal. A secure page will be displayed on the internet terminal with the data related to the book and the client is asked to select the form of payment, i.e. the present payment system. Subsequently the client enters the card number. Said card number may comprise the bank identity code, type of currency, the original balance of the card, date of activation, and serial number. In step 32, the merchant, through the central transaction server, validates the card number and amount in the present system and transmits the order information.

In step 33, the central transaction server sends an approval to the merchant and the transaction is reserved in the temporary stored transaction means with an encrypted temporary transaction number for a limited period of time. In step 34, the merchant in a secure way redirects the client to the present system with a unique encrypted transaction number.

In step 35, the client is shown the transaction data for approval and the pin code of client's card has to be entered for acknowledgement. In step 36, the central transaction server sends a message transaction approved or transaction disapproved back to the client.

In step 37, in case the message transaction approved has appeared, the central transaction server then automatically authorizes the affiliated bank to withdraw the amount of said transaction, i.e. $ 19.95, from the account of the system in said bank and to deposit said amount in the account of the merchant at said bank. The transaction number is the reference for the client, merchant, bank and the payment system. The new balance left on client's card is $ 30.05 which is stored in the database of present system. A further important transaction is the transfer of pay money or funds from one pay card to another. Figure 4 shows the flow diagram of the steps involved in such a transaction between two card holders.

In step 41, client A, who has a € 500.- pay card, wants to transfer € 200.- to client B, who has also a pay card of present system. Client A sends his card number, the pin code and the amount to be transferred from his card through a secure page on his terminal connected to the internal transfer means 3.

In step 42, the central transaction server checks above data and sends a confirmation back. The transaction meanwhile is reserved in the temporary stored transaction means with an encrypted temporary transaction number for a limited period of time.

In step 43, client A enters the card number of the receiving client B. It is obvious that prior to the present transaction, client B has supplied his card number to client A.

In step 44, the central transaction server checks the card number and type of currency of the receiving card. In case it is approved, the central transaction server through the internal transfer means 3 sends a message back for final approval to client A.

In step 45, client A enters a yes for confirmation and fϊnalization of the transaction.

In step 46, the internal transfer means sends a message back "transaction completed" . A receipt for this transaction can be generated, if required.

In step 47, at the end the balance on the card of client B is increased with € 200.-, and the internal transfer means sends the data to be stored in the central transaction server. It is clear that client B now is able to cash above amount of money from an affiliated bank or spend it online or offline through the system when he wishes to do so.

A further practical transaction in present system comes about when a client wants to withdraw money from a teller machine associated with an affiliated bank. Figure 5 shows a flow diagram of the steps involved in such a transaction.

In step 51, client wants to withdraw money, e.g. € 30.-, from his prepaid pay card through a teller machine of an affiliated bank. Client inserts the card and the teller machine recognizes it as a prepaid pay card of present system by reading the information on the magnetic strip on the card. The teller machine redirects said data to the central transaction server of the system for confirmation.

In step 52, the central transaction server checks the read data and sends back a message to enter the pin code and the amount to be selected. The client enters pin code and the selected amount.

In step 53, after the data has been confirmed, the teller machine outputs the amount to the client and provides, if applicable, a receipt with a transaction number related to this service possibly together with the remaining balance on the card. The balance of that card is adjusted accordingly within the database of the central transaction server.

Claims

1. Payment method for transferring money from and to a pay card of a payment system, wherein a client or similar party purchases a prepaid pay card at a related bank or similar selling point for a certain amount of credit money in any currency, wherein an activation number and a card number are assigned by the payment system to the pay card, and wherein, before activation of the pay card by the bank, said amount of credit money is transferred into a payment system related account at the bank, and wherein the pay card is used by the client through a terminal, in connection with the payment system, to perform a money transfer transaction.

2. Payment method in accordance with claim 1, wherein within the payment system, upon request of the bank, a batch of pay cards is assigned to the bank, and wherein an activation number and a card number per pay card are assigned by the payment system to the batch.

3. Payment method in accordance with claim 2, wherein in addition to activation number and card number a secure pin code number is assigned by the payment system to the pay card.

4. Payment method in accordance with anyone of the preceding claims, wherein money is transferred from a client having a pay card of the payment system to another party having a bank account, and wherein the pay card is used by the client, e.g. when paying for services rendered by the other party, through a terminal of the payment system to have money transferred from the payment system related account at the bank to a receiving bank account of the other party.

5. Payment method in accordance with anyone of the claims 1 to 4, wherein money is transferred from one pay card to another pay card, and wherein the one pay card is used by a client holding this one pay card, through a terminal of the payment system, to have said money transferred to the receiving pay card of another client.

6. Payment system for transferring money from and to a pay card of a payment system to be used in connection with one or more prepaid pay cards of one or more clients or similar parties, in accordance with the payment method of anyone of the preceding claims 1 to 5, comprising a central transaction server (1) for processing of money transfer transactions, which server is connected to a pay card authorize transaction means (5) for activating and deactivating, through a terminal, of pay cards purchased at related banks or similar selling points, and to - an electronic pay server (2) for handling money transactions for the client(s) through a payment system terminal or internet terminal (13).

7. Payment system in accordance with claim 6, wherein the central transaction server (1) is connected to an internal transfer means (3) for transferring money from one pay card to another pay card, and wherein said money iiss transferred, through the central transaction server (1), from the one pay card ofa client to the other pay card of another client.

8. Payment system in accordance with claim 6 or claim 7, wherein the central transaction server (1) is connected to a transaction logging means

(4) for storing and retrieving, via a terminal, of pay card balance data.

9. Payment system in accordance with anyone of the claims 6 to 8, wherein the central transaction server (1) is connected to a bank money transfer means

(6) for transferring money, through a terminal, from one bank account to another bank account.

10. . Payment system in accordance with anyone of the claims 6 to 9, furthermoorree pprroovviiddeedd wwiitthh aa ι tracki .n _g an . d tracin _g device ( _v9 ,) for lo _^gging _i pa .y, card related transaction(s), which device (9) comprises a logging database (9.1), and is connected to the central transaction server (1).

11. Payment system in accordance with anyone of the claims 6 to 10, furthermore provided with an encryption device (10) for encrypting and decrypting of pay card related data, which encryption device (10) comprises a database and is connected to the central transaction server (1).

12. Payment system pay card to be used with the method of claims 1 to 5 and in the payment system of claims 6 to 11, which pay card is provided on its outside with a card number which may consist ofa bank code, currency code, initial money value of the card, and serial number.

13. Payment system pay card in accordance with claim 12, to which additionally a pin code number is assigned.