Note: Descriptions are shown in the official language in which they were submitted.
W094/17498 2 15 ~ ~ 5 ~ PCT~S94tO0715
.
METHODS AND APPARATUS FOR MAGNETICALLY STORING AND
RETRIEVING CREDIT CARD TRANSACTION INFORMATION
Inventors: Isaac Labaton and Michael K. Kelly
Technical Field
The present invention generally relates to methods and
apparatus for securing credit card transaction information, and
more particularly, to a device for selectively erasing and
writing credit card account information onto a magnetic strip
associated with a credit card, bank account, or the like.
Backqround Art and Technical Problems
The use of plastic cards bearing a magnetic strip for
effecting sales, banking, and other financial transactions is
becoming increasingly popular. In part because of the ease with
which such cards may be legitimately used to effect financial
transactions, the unauthorized use of such cards for fraudulent
purposes is also widespread. Consequently, for many applications
of transaction cards of the type having a magnetic strip, the
holder or user of the card is required to enter a pass code
(e.q., a Personal Identification Number or PIN), for example in
the context of a banking transaction using an Automatic Teller
Machine (ATM).
While the use of PINs reduces the ease with which a card may
be used for an unauthorized purpose, many credit card sales
transactions do not lend themselves to the use of a PIN. This is
particularly true in the context of a conventional Point of Sale
(POS) device, wherein a credit card or debit card is slid through
a POS verification device at a seller's place of business. In
such cases, the fraudulent use of a card may not be identified as
fraudulent until after the transaction has occurred.
- In addition, many consumers carry a plurality of transaction
cards, such that if a consumer's wallet or purse is lost or
stolen, the consumer is potentially subject to fraudulent use of
a large number of cards, resulting in substantial economic
hardship.
WO94/17498 PCT~S94/0071~
A system is thus needed which affords a cardholder the ease,
convenience, and simplicity of use of a transaction card, yet
which also provides sufficient security against unauthorized use
of such cards.
Summary Of The Invention
The present invention provides methods and applications which
overcome the shortcomings of the pripr art.
In accordance with one aspect iof the present invention, a
Smart Credit Cardholder (SCCH) Mod~le is configured to receive a
credit card therewithin, and to "read" the account information
embedded in the magnetic strip associated with the card. In
accordance with a further aspect of the invention, the SCCH
Module includes an integral memory array for storing the
information contained in the magnetic strip.
In accordance with one mode of operation of the SCCH Module,
the magnetic strip is erased once the information contained
therein is stored within the module's memory array. In its
erased configuration, the card cannot be used in an unauthorized
manner to defraud the owner of the account represented by the
card. When the owner of the card desires to effect a transaction
using the card, he enters the card into the SCCH Module and, by
entering a predetermined pass code into the Module, retrieves the
account information from the memory array and rewrites the
information to the credit card's magnetic strip. When the sale
or other transaction is completed using the card, it may again be
erased, thus rendering the card unsuitable for fraudulent use.
In accordance with the foregoing mode of operation of the SCCH
Module, a consumer having a number of credit cards, bank cards,
debit cards and the li~e may "reissue" a particular card for
purposes of a single transaction, and thereafter erase the card
until the next transaction.
In accordance with an alternate mode of operation of the
subject SCCH Module, the original card issued by the card issuer
WO94/17498 215 ~15 ~ PCT~S94/00715
.
(e.q., VISA, MASTE~CARD, and the li]ce) may be inserted into the
Module, whereupon the information stored in the card's magnetic
strip is stored in the Module's array. Thereafter, the card may
be retrieved from the Module with the magnetic information
intact. The owner of the card may then maintain the card
permanently in a secure place rather than carrying the card
around in a wallet, purse, or the like. For example, the card
owner may wish to maintain such cards in a safe deposit box, safe
or the like. When it is desired to effect a transaction using
the account represented by a card which is permanently stored,
the user may simply insert a blan~ "dummy" card into the SCCH
Module and write the account information to the "dummy" card.
After closing the transaction with the "dummy" card, it may be
reinserted into the Module and erased. In this way, a single
blan~ card may be used for a large number of unrelated
transactions; that is, the "dummy" card may alternately function
as a bank card, debit card, or a credit card, as desired.
In accordance with a further aspect of the invention,
information pertaining to a particular account may be stored in
the SCCH memory array in accordance with a pass code selected by
the owner of the SCCH Module. This pass code may correspond to
the PIN number associated with the card, or may comprise any
arbitrary number selected by the user. When the user desires to
rewrite the information to an originally-issued (hut erased) card
or desires to write the information to a "dummy" card, the
account information may be retrieved from the Module's memory by
entering the pass code associated with that card, for example via
a keypad associated with the SCCH MGdule.
In accordance with a further aspect of the present invention,
the SCCH Module may be equipped with an alarm or other warning
mechanism which may be configured to alert the card owner in the
event the card is not erased within a predetermined period of
time after being reissued. For example, when a card owner
desires to charge merchandise to a credit card, either the
WO94/17498 ~ PCT~S94/00715
.
originally issued (but blank) credit card or a "dummy" card may
be inserted into the Module, and the account information written
onto the magnetic strip associated with the card, immediately
prior to effecting the sales transaction. After the sales
transaction is completed, the alarm or other warning device
associated with the SCCH Module may be configured to alert the
owner to erase the information frPm the card within a
predetermined time, for example, 9O seconds after issuing the
card.
In accordance with yet another further aspect of the
invention, the personal/biographical information (i.e.,
photograph, signature, name) may appear on the outside of the
SCCH Module, either in addition to or instead of appearing on the
cardholder's credit card.
In accordance with a further aspect of the invention, after
entering a password into the SCCH Module, a plastic or paper card
bearing a magnetic strip may be issued by the SCCH and signed by
the owner of the account, which card may be retained by the
seller as a receipt or proof of approval of the transaction. The
amount, date, and other data associated with the transaction may
also be written onto the paper/plastic card which, in effect, has
been issued for a single transaction and kept by the seller as a
Magnetic Card Receipt (MCR).
In accordance with yet a further aspect of the invention, the
magnetic material comprising the magnetic strip associated with
a card of the type discussed herein may be made from a material
or otherwise configured such that the magnetic information in the
strip remains intact for a short, predetermined period of time.
In this way, the card may be used immediately after issuing for
a predetermined time thereafter, but will be incapable of
effecting a transaction beyond the predetermined period of
authorization inasmuch as the magnetic information is calculated
to degrade a short time after the card is issued. The use of
such a Transitory Magnetic Card (TMC) permits the owner of the
WO94/17498 215 ~ PCT~S94100715
card to reissue the card on the spot, in order to effect a sales
transaction with the ease and simplicity of conventional cards,
yet the card can be abandoned after the transaction, and the
likelihood that the card will be used for an unauthorized purpose
in the event it is lost or stolen is minimized.
Brief Description Of ~he Drawinq Fiqures
The subject invention will hereinafter be described in
conjunction with the appended drawing figures, wherein like
numerals denote like elements, and:
Figure 1 is a schematic diagram of an exemplary SCCH Module in
accordance with one aspect of the invention;
Figure 2 is an exemplary Magnetic Card Receipt (MCR) in
accordance with one aspect of the invention;
Figure 3 is an exemplary block diagram of the Module shown in
Figure 1 setting forth various functional aspects of the Module;
Figure 4 is a schematic diagram of an exemplary transaction
card for use in conjunction with the Module shown in Figure l;
and
Figure 5 depicts a credit card verification device of the type
typically employed at Point of Sale (POS) transaction sites.
Detailed Description Of Preferred Exemplary Embodiments
Referring now to Figures 1, 4 and 5, an exemplary Smart Credit
Cardholder (SCCH) Module 3 in accordance with the present
invention suitably comprises a keypad 6, for example a
conventional alphanumeric telephone-type keypad, an alphanumeric
display 11, an audio transducer (speaker) 8, a first inlet slot
7, a second inlet slot 4 having an erasing mechanism 30, for
example a permanent magnet associated therewith, and a
selectively actuable mode switch 60.
As is well known, financial, sales and other transactions
which are effectuated through the use of a transaction card of
the type bearing a magnetic strip often employ a verification
WO94/17498 PCT~S94/00715
2t~4~8
device (Figure 5), typically located at the seller's place of
business. In order to authorize a transaction, it is often
appropriate to swipe or draw the transaction card through a slot
62 associated with verification device 5, such that magnetic
strip l associated with card 2 is integrated by an appropriate
card reading mechanism associated with ~vice 5. The account or
other information imbedded within strip l is read by device 5 and
used to authorize the transaction, for example by transmitting
the information to a central computer maintained by the card
issuer (for example to confirm or deny the transaction). For
example, if the card has been reported stolen or if the amount of
the transaction exceeds the cardholder's available credit limit,
the transaction may be denied.
In accordance with one aspect of the present invention, the
account information imbedded within magnetic strip l may be
stored in memory within module 3, thus permitting the owner of
the card to erase the information from the card and to write the
information back to the original card or to another card only
when desired, for example immediately prior to effecting a
transaction with the card. In this way, if the card is lost or
stolen between transactions, the likelihood that the card may be
used in an unauthorized manner is reduced inasmuch as the card
does not bear the account information within its magnetic strip,
and further in view of the fact that an unauthorized user is
unlikely to also have access to the cardholder's SCCH Module
and/or knowledge of the pass code used to retrieve the account
information from Module 3.
Referring now to Figure 3, Module 3 may be configured to house
circuitry for electronically effecting the functions described
herein. More particularly, Module 3 comprises a serial input/
output port 33, a CPU 2l including a clock 32, a display circuit
22, a read-only memory (ROM) 23, a random access memory (RAM) 24,
an alarm 8, a power source 26, a keyboard 6, and a card reader/
WO94/17498 2 ~ ~ 41~ 8 PCT~S94/00715
.
card writer 27 operatively associated with input slot 4 and
output slot 7.
With continued reference to Figures 1, 3 and 4, the
information imbedded in the magnetic strips of various bank
cards, ATM cards, credit cards, debit cards, charge cards and the
like may be stored within Module 3 and selectively retrieved by
the owner of Module 3 in order to effect the transaction with one
of the foregoing cards. More particularly, a typical transaction
card, for example a VISA or MASTERCARD, is issued to the card
owner with the account information imbedded in the magnetic strip
associated with the card. In a preferred embodiment of the
present invention, the card may be inserted into slot 7 of Module
3, whereupon instructions resident in ROM 23 instruct display 22
to display a command to the user requesting that the user enter
a pass code, for example a password comprising up to lO or more
alpha/numeric characters. In accordance with a particular
preferred embodiment, the user may enter a 4-digit pass code into
Module 3 via keypad 6. This pass code may later be used by the
cardholder to retrieve information from Module 3 corresponding to
the same card, as discussed in greater detail below.
Upon entering the pass code, an address is assigned in RAM 24
wherein information pertaining to the particular pass code may be
stored. More particularly, once the card is inserted into Module
3 and a pass code entered, Card Reader 27 "reads" the information
imbedded in the magnetic strip of the card and stores the
information in RAM 24 in the location corresponding to the
password associated with the card. In accordance with a further
aspect of the present invention, the owner of Module 3 may
thereafter operate the Module in accordance with one of at least
two modes: in the context of the illustrated embodiment, the user
may select either mode A operation or mode B operation via switch
60.
If mode A operation is employed, the card may then be removed
from Module 3 through slot 7 with the information imbedded within
WO94117498 ~ 1~ 415 8 PCT~S94/00715
the magnetic strip intact. In accordance with mode A operation,
the cardholder may then retain the originally issued card, with
the magnetically coded information intact, in a safe place, for
example a safe or safety deposit box. That is, in accordance
with mode A operation, it is not necessary that the cardholder
carry the credit card in a purse or wallet; rather, a facsimile
or substitute for the card may be generated by the user for a
particular transaction, as discussed in greater detail below.
In accordance with mode B operation, once a pass code is
assigned to a particular transaction and the information is
retrieved from the card and stored in RAM 24, the card may be
removed through slot 4, whereupon the card interacts magnetically
with magnet 30 to thereby erase the information from the magnetic
strip l. In this way, the cardholder may carry the card in a
wallet or purse so that the card can be "reactivated" at a later
time as discussed in greater detail below.
While it is still possible to use an erased card in an
unauthorized manner, the likelihood of such unauthorized use is
reduced inasmuch as a card without its magnetically encoded
information typically may not be used to authorize a typical
sales transaction of the type which employs a PoS device 5.
When the owner of a transaction card desires to utilize the
card to effect a transaction, whether it be a banking, debit,
charge, sales, or other transaction, Module 3 may be used to
reissue the card in the following manner:
When a cardholder desires to reissue a card, the user inserts
a card into Module 3, for example by inserting the card into slot
4. In this regard, the card may be the originally issued card
which was previously erased in accordance with mode B operation
(described above), or the card may comprise a blank, "dummy"
card, for example a generic or universal-type card which may be
used as a credit card, debit card, bank card, or charge card, as
desired. Upon inserting a card into Module 3, display ll may
instruct the user to enter a user I.D. as a threshold to
WO94/17498 2 ~ 8 PCT~S94/00715
operating the device. In this regard, such a user I.D. may be
unrelated to a particular card, and may simply constitute a
threshold authorization step which must be performed by the user
each time any card is "reissued." Thereafter, display ll may
instruct the user to enter a pass code pertaining to a particular
card. Alternatively, the aforementioned "threshold" step may be
eliminated, such that the user simply enters a single password
into Module 3 (via keypad 6) corresponding to the particular card
which the user is to reissue.
Upon entering the pass code corresponding to a particular
card, the account information corresponding to that card is
retrieved from RAM 24 and written on the magnetic strip of the
card then resident in the Module by card writer 27. The reissued
card is then removed from the Module through slot 7 and used to
effect the sales, banking, charge, debit or other transaction.
In accordance with a further aspect of the invention, the user
may reinsert the card into Module 3, for example through slot 4,
upon completion of the transaction for which the card was
reissued. That is, once the card has been used to effect the
transaction, it may again be erased, thereby inhibiting the
unauthorized use of the card in the event that it becomes lost or
stolen. Alternatively, the cardholder may simply retain the
card, with its account information intact within the magnetic
strip, until it is desired to erase the information. For this
purpose, Module 3 may be configured to remind the user of the
option to erase the information from the card at a predetermined
time following the time at which the card was reissued. For
example, Module 3 may be configured such that alarm circuit 8
emits a buzz, tone, or voice synthesized command at a convenient
time following reissue of the card. In accordance with a
preferred embodiment, such an alarm signal may be emitted by
Module 3 in the range of 30 seconds to 30 minutes, and most
preferably in the range of about 90 seconds, following the
issuance of a card. The period of time between the reissuance of
WO94/17498 PCT~S94/00715
2 ~ 5 ~
a card and the alarm signal should be of sufficient length to
conveniently effect a transaction with a newly-reissued card.
In accordance with a further aspect of the invention, Module
3 may be used to store account information pertaining to a
plurality of transactions and other-~type cards, in a single
universal card used to reissue each~iof a plurality of cards
stored within Module 3. In thiso way, a cardholder need only
carry with him his personal SCCH Module 3 and one or more
universal cards, rather than carrying a large number of credit
cards, debit cards, bank cards, charge cards and the like.
In accordance with a further aspect of the invention, Module
3 may be configured to authorize a transaction directly, i.e.,
without the need for reissuing a card and swiping the card
through a POS device such as POS device 5. More particularly, it
may be desirable to connect Module 3 directly to a telephone line
(if Module 3 is equipped with a modem) or to a POS device through
input port 33. The authorization or other account information
may thus be transmitted and/or received directly by Module 3,
thus eliminating the need for the intervening steps of issuing a
card and utilizing the magnetic strip associated with the card to
convey the account information.
In accordance with a further aspect of the invention,
information and/or data pertaining to transaction cards may be
downloaded directly into RAM 24 via input port 33, without the
need for inserting a card into the Module. In this way, rather
than issuing a card bearing a magnetic strip having account
information embedded therein, the information may be loaded into
Module 3 via a port 33 from a computer, modem, telephone or other
device. In accordance with this aspect of the invention, credit
card and other card-issuing companies need not send the cards
through the mail; rather, they may simply download the account
information directly into Module 3, whereupon the consumer may
issue his own transaction card via Module 3 as needed.
--10--
WO94/17498 21~ 41~ 8 PCT~S94/00715
-
In accordance with the foregoing embodiments, and particularly
in the context of mode B operation wherein information is erased
from the transaction card and not rewritten until the card is
used in a transaction, consumers are afforded an extra layer of
security against unauthorized use of their cards. The present
invention permits this additional security layer, for example in
the form of a pass code required to retrieve the information from
memory and reissue a card advantageously implemented through the
use of Module 3. Thus, existing ATM's, POS devices, and the
like, need not be altered, and may be used in their conventional
fashion.
Even if Module 3 is lost or stolen, the account information
remains secure to the extent an unauthorized user is without
knowledge of the pass codes needed to retrieve account
information from memory.
Referring now to Figure 2, an exemplary Magnetic Card Receipt
(MCR) 9 comprises a thin, planar card including a magnetic strip
lO and various other indicia pertaining to a transaction, for
example the cardholder's name, signature, transaction date,
amount of transaction, the nature of the transaction, and the
like. In accordance with an alternate embodiment of the present
invention, MCR 9 may function as a universal card which may be
entered into Module 3 whenever it is desired to effect a
transaction. MCR 9 may be used to effect the transaction, and
thereafter may be left with either the merchant (seller), bank,
or other entity with whom the cardholder engages in a transaction
as a receipt or other record evidencing authorization for the
transaction. In this way, the card issued for a particular
transaction by Module 3 can also function as a sales receipt or 30 other permanent record of the transaction. For this purpose, MCR
9 may advantageously comprise paper, plastic, or other suitable
material.
In accordance with the further aspect of the invention, the
magnetic material which comprises magnetic strip l of card 2 (or,
WO94/17498 21~ 4 ~ ~ 8 PCT~S94/00715
.
alternatively, magnetic strip 10 of MCR 9) suitably comprises a
magnetic material designed to retain the information stored
therein for a predetermined period of time. Thus, the card
issued by Module 3 may have a predetermined useful life, so that
in the event it is lost or stolen, th~e information contained in
the magnetic strip will be degraded~`-rendering the card unusable
by an unauthorized user. Such a T~ansitory Magnetic Card (TMC)
may contain magnetic material;~which causes the information
written thereon to decay within a predetermined period of time,
for example the range of 1 to 20 minutes, and most preferably in
the range of 3 to 5 minutes, if the card is issued immediately
prior to effecting a transaction. Alternatively, the magnetic
strip may be configured as such that the information therein
decays, for example due to thermal effects, or due to the
interaction with magnetic fields present in normal commercial
environments, within a period of one hour up to 1 or 2 days or
more, for example in the context of a relatively short business
trip. In yet a further embodiment, the magnetic strip may be
configured such that the information written therein decays after
a relatively long period of time, for example 2 to 4 weeks or
more; this would be particularly advantageous in the situation
where a card is issued for a vacation or other extended trip, but
which is desired to be cancelled or otherwise rendered unusable
at the end of the trip.
The use of a TMC-type magnetic strip is particularly
advantageous in the context of MCR 9 to the extent such a receipt
is left in the hands of a merchant; hence, the merchant may use
MCR 9 for accounting and other administrative purposes, but would
be unable to use the card to authorize another transaction once
the information contained within the magnetic strip is eroded.
In accordance with a further aspect of the invention, Module
3 may be figured to display instructions, prompts, announcements,
and the like to permit expanded functionality and flexibility for
the user. For example, Module 3 may be configured to disclose a
-12-
WO94/17498 2 ~ 5 ~1~ 8 PCT~S94/00715
.
message to the user when it is time to replace or recharge power
source 26 (e.q., batteries).
In this regard, Module 3 may be configured to execute various
accounting features, for example by storing data pertaining to
various transactions so that the status of the various accounts
maintained by Module 3 may be conveniently displayed for the
user. For example, each time a transaction is closed for a
particular account (e q., a VISA credit card), an on-going
balance of payments and charges for the user's VISA account may
be maintained within RAM 24, such that the user may display his
current available credit prior to effecting a transaction with
his VISA card.
In accordance with a further embodiment of the invention,
Module 3 may be adapted to include additional security apparatus,
for example including a fingerprint detection circuit, a voice
recognition circuit, and other security measures for the purpose
of unambiguously identifying an authorized user.
Although the invention has been described herein in
conjunction with the appended drawings and figures, the scope of
the invention as set forth in the Appended Claims is not so
limited. For example, although the apparatus and method of this
invention has been described in the context of transaction cards,
the invention may be utilized in the context of virtually any
application wherein information is desired to be stored and
retrieved in magnetic form. Various other modifications in the
selection in the arrangement of the various components and method
steps discussed herein may be made without departing from the
spirit of the invention as set forth in the Appended Claims.
-13-
