Note: Descriptions are shown in the official language in which they were submitted.
18332
Expr~ ~ Mail Label
No. B043 787 656
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PATENT
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A SY~TEM FOR VA~IDATSNG $~ A~EEN~SC~Y
OF A ~RANSACTION EMP~OYIMG EL~CIRONIC RgC~IP~6
Technical Field
The subject lnvention relates to a system for
authenticating transactions. The subject invention
is suitable for use with transaction card systems
which heretofore have required hard ~opy receipt~ *o
authenticate transactions.
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Backqround of ~hel nvention
, lO In today's environment, transaction cards are
3 used as the preferred form of payment in a large
number of transactions for the purchase of goods and
~, services. There are different types of transaction
S~ or payment cards, such as credit and debit cards. In
~! 15 most cases, the customer presents the card at the
;~ point of purchase. ~he merchant will then take some
steps to determine if the card if valid. If the
merchant decides to accept the card, the transaction
can be completed.
In most transactions involving a payment card, ~ -
the purchaser is requested to provide a signature on
a hard copy receipt. This receipt also includes -~
various parameters identifying the transaction.
-~ These parameters typically include the account nu~ber
of the card, expiration date, an identification of
~r the merchant, the date, an appro~al code and the
amount of the transaction.
l~ The hard ~opy ~eceipt is actually a composite of
;' two to four essentially identical copies. After the
; 30 customer has Signed the receipt, he is usually given
one of the copies. The customer saves this receipt
for this records. One or more copies are retained by ;~
the merchant. Another copy o~ the receipt is sent to
,"J. the financial institution associated with the
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merchant and responsible for generating the
information that will ultimately result in a debit to
the ~ccount of the customer.
At the present time, financial institutions
~; 5 generally 6ave ail the receipts from all transactions
until payment is received. However, after the
- information from the receipts is used to bill the
clients, they are not accessed again unless a dispute
as to the authenticity of the transaction arices.
More particularly, if a customer questions a bill for
; a particular transaction, he will contact the ~-
financial institution which issued his card. The
latter institution will start an inquiry which
includes the financial institution associated with ;~
the merchant identified on the customer's bill. The
~` merchant's financial institution will then track down ~-
the receipt and prepare B COpy for transmittal to the
purchaser. Assuming the transaction was valid, the
signature on the receipt is usually sufficient
evidence to convince the customer that the purchase
was made and that he is liable for the amount of the
bill.
As can be appreciated, the need to store a very
3 large volum~ of receipts in a manner that they can be
accessed is a problem. This problem has been
addressed in a number of ways. One approach has
relied on the use of microfilm technology. In this --
approach, all of the receipts are microfilmed and
catalogued to facilitate retrieval.
0 Another, more sophisticated approach is through
the use of electronic image generation, storage and --
retrieval systems. Using these systems, the
financial institution can generate a digital image of ~;
each of the receipts in ~uch the same way as a ~;
facsimile machine converts an i~age to electronic ~
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PATENT
~; impulses. These digital images can be catalogued and
stored and regenerated as hard copies upon request to
validate n transaction.
While the latter ~pproaches alleviate the
~torage problem, they fail to address the more
expensive and time consuming problem of actually
handling the receipts. As noted above, a copy of
-` every receipt must be transferred from the merchant
" to the associated financ$al institution. Thereafter,
- 10 the financial institution must have human operators
^ catalog and store the receipts, whether in hard copy,
` microfilm or electronic format.
:``5 One approach which has been suggested to
eliminate the use of hard copy receipts is to re~uire
~, 15 the user to supply a personal identification number
(PIN), instead of a siqnature, at the time of the
d transaction. The requirement of supplying a PIN adds
an additional level of security for the transaction.
However, it does not provide a ~istisfactory solution ~ -
;j- 20 to an inquiry by a purchaser. The response by the
::$' financial institution is limited to a statement to
the customer that his PIN was used at the point of
~ sale. No actual proof can be given to the customer
`, which supports this statement. Moreover, even if
proof could be given, a purchaser is much more
willing to accept physical evidence of his signature
as proof that he is liable for a tr~nsaction.
Therefore, it is an object of the 6ubject
invention to provide a system for authenticated a
transaction that overcomes the problems of the prior
art approaches. - -
It is another object of the subject invention to
provide a system for authenticating transactions
which eliminates the need to transfer and catalogue
hard copy receipts.
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It is a further object of the subject invention
to provide n system for authenticating transactions
~- which does not require transfer of ~ hard copy
receipt, yet allows for the ~ubsequent generation of
such a receipt upon request.
It is still another object of the ubject
- invention to provide a ~ystem for authenticating
` transactions which includes a terminal, or peripheral
` to a terminal, capable of generating a digitized code
; 10 signal ~ased on data uniguely identifying a
purchaser.
It is still a further object of the subject
invention to provide a system for authenticating
transactions which includes a terminal capable of
generating a digitized code signal based on the
signature of a purchaser.
It is still another object of the subject
invention to provide a system for authenticating
transactions which includes a terminal capable of
generating a digitized code signal based on data ~`
uniquely identifying a purchaser and storing said
code signal along with the parameters of the
transaction.
It is still a further object of the subject
i 25 invention to provide a ~ystem for authenticating
transactions which includes a terminal capable of
generating a digitized code signal based on data
uniquely identifying a purchaser and ~toring said
code signal along with the parameters of the
¦ 30 transaction, with the data being used at a subsequent
time to generate a hard copy receipt.
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; ~ummary ~ S~ b~c~l~n
i~ In accordance with these and many other objects,
~ the subject invention provides a method and system
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for validating the ~uthenticity of a transaction.
The 6ystem includes a terminal located at the point
- ~f ~ale for c~pturing the p~rameters of the
transaction. In thi~ re~pect, the terminal i6 like
prior art terminal6 including electronic cash
register6 and other ctate of the art point ~f sale
systems.
~r~,r In accordance with the subject invention, the
terminal is also provided with a means for
i~;i 10 electronically capturing data, ~upplied by the
e, purchaser, and uniguely identifying that purchaser.
~` In the preferred embodiment that data is a digital
~; representation of a signature. There are a number of
~` methods which can be used to generate a digital
representation of a signature. For example, various
digitizing pads and/or pens having pressure ac~ivated
transducers have been used to record the digital -
$ signature information.
In the preferred embodiment of the subject
invention, the digitized signature is created using a
combination of a CRT and light pen. The latter
s~ combination has been used to record signatures in the
prior art. (See, U.S. Patent No. 4,656,662, issued
April 7, 1987) Although not clearly stated in the
patent, it appears that the latter ~ystem was
designed to generate a plurality of reference
, ~ignatures for ~ customer base of a financial
;~ institution. These reference ~ignatures could be -
~ccessed ~y the financial institution t~ iden'ify a
customer'6 6ignature, for example, when clearing a ~-
` check. This approach would enable a financial
institution to do away with signature cards.
In accordance with the subject invention, the
digitized signature and the parameters of the
transaction are stored in the terminal. All the data
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can then be transmitted from the terminal to the
processGr at the financial institution associated
with the merchant (typically re$erred to as the
acquirer). The acquirer will store this data until
S the payment for the transaction has been received.
` However, if the purchaser reguests verification of
the transaction, this data can be retrieved and a
hard copy thereof can be generated. A variety of
devices are available for converting the electronic
data into a hard copy receipt. This hard copy
receipt can then be supplied to the customer to
~ validate the transaction and induce payment for the
,~ purchase.
As can be appreciated, the sub~ect system allows
for the same type of verification which is presently
available but eliminates the need to create,
catalogue and store physical, hard copy receipts.
Purther ob~ects and advantages will become apparent
from the following detailed description, taken in
conjunction with the drawings in which:
~rief Description of t~he Drawinas:
Fi~ure 1 is a schematic diagram of a typical
;- transaction card network in which the subject i~
invention can be implemented.
Figure 2 is a perspective view, partially in
~s schematic, of a terminal for use in the system of the
subject invention.
! Detai~ed DescFiPtion of the Preferre~_E~kg~i~Lnt
~ Turning to Figure l there is illustrated a
;, 30 schematic ~iagram of a typical transaction card
-~ network 10. A more detailed description of this type
of network is ~et forth in U.S. Patent No. 4,485,300,
issued march 27, 1984, and incorporated herein by ~-
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reference. Briefly, the network includes a plurality
of financial institutions 20 that issue transactisn
cards 22 to customers. The network also includes a
number of merchant6 24 where the customer can
purchase goods ~nd services by using the payment card
20. Each merchant is associated with its own
financial institution known as the acguirer 26.
The i6suers and the acquirers are tied togeth~r
; into the network via a central proce~sor 28
maintained by the network operator (ie. such as Visa
or Mastercard). In 2 typical credit card
transaction, the customer will present his card for a
purchase. The merchant 24 will determine if the card
is authentic through one of a number of approaches.
~5 For example, an authorization request can be
generated and routed through the network to the
issuer for approval. Additional information about -
~; authenticating cards can be found in U.S. Patent No.
4,734,564, issued March 29, 1988. (It should be
noted that in some transactions, the issuer and the
acquirer are the ~ame financial institution. In this
case, intervention by the network operator is
i~ unnecessary.)
e If the card has been authenticated, the purchase
can be completed. As noted above, the customer i~
typically asked to cign a hard copy receipt. At
least one of these copies is eventually delivered to
the acguirer. In some cases, the information on this
''J receipt is used by the acquirer to begin the billing
process. In other cases, the receipt is merely
catalogued and stored. In the latter case,
information about the transaction will have been
supplied to the acquirer from the merchant in an
electronic format. There exists in the prior art a
wide variety of merchant terminals which can capture
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the parameters of the transaction ~nd periodically
- transmit them to the ~cguirer.
Once the acguirer has received the parameters of
the transaction, they can ~e routed through the
5 central processor 28 to the appropriate issuer. The
issuer 20 then bill~ the cardholder.
`- If the cardholder disputes a bill on his
~tatement, he will contact the issuer 20. The issuer
~i will then initiate a request for information ~rom the
acquirer. The acquirer will then provide a hard copy
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of the receipt, with the cardholder's signature to
confirm the transaction.
i~ In accordance with the Gubject invention, the
creation, storage and retrieval of the purchase
` 15 receipt is substantially simplified. More
particularly, the terminal at the merchant is
provided with a means for creating a diqitized code
signal consisting of a representation of the
`~ signature of the cardholder. This code signal, along
with the parameters of the transaction, is then
~ transmitted electronically to the acquirer. The
`Y acquirer stores this data until an inquiry is
initiated by the cardholder. If such an inquiry is
~l made, the acquirer can then generate a hard copy
receipt which is supplied to the cardholder to
authenticate the transaction.
J Figure 2 illustrates one type of terminal 36
which can be used to ~mplement the sub;ect invention.
The terminal 36 can include ~ standard electronic
cash register 38. This type of cash register has the
capability of receiving inputs defining the date and
¦ amount of the transaction. Thi~ information can be
stored in a digital fashion.
In accordance with the subject invention, a
means is connected to the cash register 38 capable of
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creating a digitized version of the signature of the
cardholder. As noted above, there are a number of
devices available ~or ~onverting the pen ~tro~es of
~n individual into digital signal~. For example,
pressure pads and/or digitizing pens could be used.
In the preferred embodiment, the means i6
defined by a microprocessor driven module 40
including a CRT display 42 and a light pen 44. ~he
~odule can also be provided with a means for reading
the magnetic stripe on the transaction card (shown as
a s~ot 46 in Figure 2).
In operation, the merchant can enter the
transaction parameters into the cash register 38.
The merchant will then swipe the magnetic stripe of
the transaction card through slot 46 so that card
-~ identifying data can be read. This card identifying
data can be transmitted through the network to obtain
an authorization. The authorization can include a
confirmation that the card has not been reported as
lost or stolen.
Assuming that the transaction has been
authorized, the parameters of the transaction will be
displayed o~ the CRT display 42. As shown in Figure
2, these parameters can include the merchant name,
date of the transaction, transaction amount,
3 cardholder's name, ~nd transaction number. The
customer i8 then given a chance to review the
~, displayed information for accuracy. If the data is
. Correct, the customer will then "sign" the display
using the light pen 44. ~
As noted above, the use of the co~bination of a ~ -
- light pen and CRT display for digitizing handwritten
data is well known and will not be descr~bed in
detail. Briefly, in this type of device, the light
pen includes a photodetector which is excited by the
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electron beam of the CRT. The current generated by
: the photodetector within the pen is correlated with
the timing nnd position of the electron beam of the
CRT to give positional ~nformation. The positional
information is stored ~nd supplied ~o the cash
register 38. The unit can be programmed to display
the signature as the user writes it on the CRT.
once the user finishes entering his signature,
the cash register can be used to generate a receipt,
~ 10 either with or without a facsimile of the signature.
`$ In this matter, the customer will have his own record
of the transaction.
, In accordance with the subject invention, no
additional hard copy receipt needs to be generated at
~5 the time of purchase. The electronic digital data, -
which includes the transaction parameters and the
signature information, can either be stored at the
~erchant location or transmitted to the acquirer.
The ac~uirer can use this data to initiate the steps
20, necessary to cause the issuer to bill the purchaser.
In addition, the acquirer will store this information
until the payment has been received.
As noted above, if a cardholder questions a
billing entry on his statement, a request ~or
-~ 25 confirmation will be sent by the issuer to the
acguirer. At this point, the processor 50 operated
by the acquirer will retrieve the data concerning the
! transaction from electron~c storage 52 (Figure 1).
The digital data can then be converted into human
readable form, preerably, a hard copy receipt. This
1 receipt will include all the transaction parameters
-~ including a representation of the customer's
signature.
There are many devices 54 available for ~-
converting the stored digital data into hard copy
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receipts. Thi~ technology has been developed for
vario~s document storage and retrieval ~ystems. This
technology has al50 been used to digitize and store
hard copy receipts and generate ~e receipts for
~; 5 later use.
Once the hard copy receipt has been generated,
~` it can be 6ent to the customer to validate the
transaction. Once the customer is presented with the
receipt having his signature, most disputes can be
resolved. As can be appreciated, the customer can be
. provided with a confirming hard copy receipt even if
~-'?' a hard copy receipt was never generated at the point
, of sale. In this ~anner, the problems of transfer,
~`~ cataloguing and storage of such receipts is
~- 15 eliminated.
While the subject invention has been described
with reference to a preferred embodiment, various
.'.$J' changes and modifications could be made, by one
skilled in the art, without varying from the scope
and spirit of the subject invention as defined by the
`!Y claims. ~or example, the identifying indicia need
not be limited to the signature of the customer as
any written code would ~uffice. In addition, the
system could also be used to store and retrieve a PIN
entry, providing proof to the customer that the valid -
PIN was entered.
The human readable rendition of the receipt
~) would not necessarily have to be a hard copy. For
`i example, if the customer comes into a financial
institution connected to the acquirer, the requested
~nformation could be electronically retrieved and
used to generate a human readable image on a CRT
screen where the customer is located. As long as the
customer can review the information, the transaction -~
-- 35 can be validated. ~--
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