Note: Descriptions are shown in the official language in which they were submitted.
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CA 02329226 2000-12-20
1 "PDA WITH INTEGRATED E-COMMERCE
2 FOR FINANCIAL TRANSACTIONS"
3
4 FIELD OF THE INVENTION
The invention relates to portable computers which integrate smart
6 card technology and cellular telecommunications for on-line e-commerce and
the
7 improved functionality achieved thereby.
8
9 BACKGROUND OF THE INVENTION
Personal Digital Assistants (PDA) are highly portable
11 microprocessor-based computers which emphasize their small size and
personal
12 information management capabilities. PDA's have enough processing power to
13 handle CPU intensive operations including voice telephony applications,
cellular
14 communications, data management programs and access the Internet. PDA's
enable combination of all functions into a single device.
16 Electronic commerce ("e-commerce") is liberating individuals from
17 the need to issue checks or to carry paper currency and coinage. Most
banking
18 functions can now be performed online by direct dialing a banking network
or
19 through the Internet for review of an account's status or even moving value
between linked accounts including other person's accounts. So far however, in
a
21 world of paper currency exchange, there is substantially no way to make a
22 withdrawal of value from your own account and only limited ability to
handle
23 vendor and purchaser transactions.
24 Usually, to conduct a commercial transaction over the Internet, a
purchaser uses a credit card. To avoid illegal use of your credit card through
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CA 02329226 2000-12-20
1 interception of the card information number, e-commerce sites either use
2 separate phone line access or use secure server software through the
Internet
3 which encrypts personal information, including the credit card number,
4 identification and passwords. The user of a credit card accesses a line of
credit
with the card issuer. The user defers payment at the time of transaction in
favor
6 of repaying the card issuers at a .later date, often associated with a card
issuing
7 charge or an interest charge.
8 Another form of e-commerce is the increasing use of the so-called
9 "smart cards". More like a debit card than a credit card, a commercial
transaction results in a point-of-sale reduction of your financial worth: A
user can
11 pay for a purchase at a merchant terminal (like a debit or credit card) or
transfer
12 value directly to another smart card.
13 Physically, a smart card is a plastic' card having an integrated
14 ~ circuit card embedded therein. The construction and interface for smart
cards
adheres to International Standards Organization (ISO 7816) for integrated
circuit
16 cards. The details of this standard are available through the American
National
17 Standards Institute (ANSI) located in New York, NY. The standard, ISO 7816,
18 sets standards for the physical characteristics of the card and inter-
industry
19 interchange criteria for security and identification purposes.
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1 Smart card use has been predominantly as a fixed value card
2 wherein, once the value is depleted, the card's life ends. With newer smart
3 cards, the on-board microprocessor allows writing and rewriting of card
secure
4 memory, enabling online updating of the financial value stored on the card.
Updating is usually performed at an automated teller machine (ATM) fitted with
6 smart card interfacing apparatus.
7 Unlike a debit card however, which acts to authorize account to
8 account transfers, a smart card is typically used as an independent and
9 intermediate repository of a small amount of value or virtual cash;
withdrawn
from a bank account in an online transaction and stored thereon for later use
in
11 offline transactions.
12 Where a merchant is equipped with a terminal, both smart cards
13 and debit cards obviate the reliance on credit cards, even when the user is
14 unable to access an ATM or bank for cash. If the vendor or cash recipient
is not
a merchant, or the merchant is not equipped with a debit terminal, then debit
16 cards are non-functional and transactions are limited to off-line, smart
card-to-
17 card transactions. Even smart card reader equipped merchants will face
18 difficulties if the customer's smart card has insufficient funds or the
value of
19 transaction exceeds either the customer's or the merchant's card limit. The
issuer of the smart card typically imposes a limit on how much value a card
can
21 store. While not actually technologically limited, the issuer usually
imposes
22 upper programmed limits of about $500 to lessen the consequences of loss of
23 the card (akin to losing cash). So with higher amounts and lacking access
to the
24 purchaser's financial institution, the user usually turns to a credit card.
However,
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CA 02329226 2000-12-20
1 when the vendor does not accept credit cards, or for online instances, where
a
2 vendor is not physically able to verify the credit card user's identity and
signature
3 (really the only verification of the card holder's authorization for the use
of the
4 card) then the transaction is at risk of misuse or is barred altogether.
Further, despite secure server software, online credit card
6 transactions which do not require a signature are more subject to fraud.
Smart
7 cards provide improved security wherein only the user having authorization,
such
8 as a personal identification number or PIN, can access the information on
the
9 card and access the value contained thereon. There is a greater comfort
afforded to a holder and user of a card which can only be accessed by the
11 authorized user.
12 Smart cards require an interface to enable inquiries and
13 transactions to occur. Usually this interface is an ATM or a merchant
terminal.
14 Some "Super" smart cards have capabilities such as LCD displays and a
rudimentary user input interface. However, these types of cards are rare and
16 add significantly to the cost of the card. Accordingly, a variety of
handheld smart
17 card readers are available for accepting one or two smart cards, provide a
18 calculator-type keyboard and a small visual display permitting input values
to be
19 visually verified before completing a transaction. Coupled with an
application
program for manipulating the smart card, these handheld terminals act like an
21 ATM interface which enables online transactions and updating.
4
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CA 02329226 2000-12-20
1 Accordingly, while smarts cards are secure, convenient, and paper
2 currency-free, the value of the transaction is usually limited, even with re-
writable
3 cards, and a vendor or merchant may not have an electronic link to the
banking
4 network.
More particularly:
6 ~ should a large transaction be required, then the purchaser may
7 be required to seek other forms of payment (cash) or directly
8 attend at a banking institution;
9 ~ a smart card-equipped merchant may not have a debit/credit
terminal and if they do; the electronic link to the banking
11 network may be temporarily inoperative which tends to occur
12 from time to time;
13 ~ typically an ATM is required for an online updating of the card's
14 value;
~ access to a telephone network is required to provided online
16 access to an account; and
17 ~ an ongoing record of transactions is only available through a
18 periodically issued statement or through online banking.
19
Accordingly, there is a need to provide a method of further
21 enhancing the functionality of e-commerce so as to permit greater freedom
to
22 conduct transactions, be they small or large, provide greater
accountability and
23 to do so whether the transacting parties are electronically linked for
online
24 access or not.
5
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CA 02329226 2000-12-20
1 SUMMARY OF THE INVENTION
2 A system and a method is provided for integrating a cellular phone,
3 a portable computer, vendor and purchaser smart cards and online financial
4 access to enable financial transactions to take place with greater security,
flexibility and greater values than is currently available using debit, credit
or
6 smart cards.
7 In a preferred embodiment , a system is provided which accepts
8 two smart cards and enables two smart card users to transfer funds between
the
9 holders. Transactions beyond off-line card to card transfers are now
possible.
Further, the usual transaction limit on a smart card is no longer a barrier as
the
11 present invention is capable of online access to the smart card holders'
12 accounts. This access is secure as the holder actually has the smart , card
in
13 - their possession and must have the access authorization or PIN. Using a
built-in
14 cellular transceiver, a withdrawing holder A can connect through an online
access port to account A to access larger values of funds which can be
16 transferred to a depositing holder's smart card or account. If sufficient
funds are
17 in smart card A, the transfer can be from card A and directly to the
depositing
18 holder's account.
19 Broadly then, a method for transferring funds between first and
second holders is provided. The holders possess first and second re-writable
21 smart cards A and B wherein each card A,B is capable of electronic deposit
and
22 withdrawal from bank accounts A and B respectively through an online access
23 port. The steps comprise:
6
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1 ~ providing a computer having a display, an input interface, first
2 and second readers for interfacing with the first and second smart
3 cards A,B. The holders insert the first and second smart cards in
4 the first and second readers respectively
~ validating holder A's right to withdraw funds without accessing
6 the online access port;
7 . validating holder B's right to deposit funds without accessing
8 the online access port;
9 ~ determining a source and value of the funds to be transferred,
be it from the smart card A or the account A;
11 . determining a target for the funds, be it the smart card B or the
12 account B; and
13 ~ communicating with the online access port so as to
14 communicate holder validation and transfer the funds from holder
A to holder B, at least one of the source or target being account A
16 or account B.
17 The process can be effectively applied using apparatus and system
18 which broadly comprises a computer having a display, an input interface,
and
19 having means for communicating with accounts A and B through the online
access port, preferably through a cellular transceiver. The system further
21 comprises, first and second readers for interfacing between the computer
and
22 the first and second smart cards and an application program which interacts
with
23 holders A and B for validating holder A's right to withdraw funds, such
validation
24 occurring locally at the computer and without accessing the online access
port,
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1 validating holder B's right to deposit funds, such validation occurring
locally at
2 the computer and without accessing the online access port, determining a
3 source and value of the funds to be transferred, be it from the smart card A
or
4 the account A, determining a target for the funds; be it the smart card B or
the
account B, and communicating with the online access port so as to communicate
6 holder validation and transfer the funds from holder A to holder B, at least
one of
7 the source or target being account A or account B.
8 The portable financial transaction system as recited in claim 2
9 wherein if the source of the funds is determined to be the first smart card
A, the
program compares the value of the funds to be transferred with the stored
value
11 of funds in the first smart card A and if the transfer value is greater
than the
12 stored value then the program interacts with the holders to select account
A.
13 Preferably, the display and input interface comprise a touch-screen
14 and the first and second readers are located so that the smart cards
projects
partially over the display and the program causes information to be presented
on
16 the display so that instructions and user input is displayed adjacent the
17 respective projecting smart card.
18
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CA 02329226 2000-12-20
1 BRIEF DESCRIPTION OF THE DRAWINGS
2 Figure 1 is an overall schematic of a touch screen PDA having an
3 onboard cellular transceiver and two smart card readers which interface with
a
4 online banking access according to an embodiment of the invention;
Figure 2 illustrates three possible transfers of value from smart
6 card holder A to holder B being card A to account B, account A to account B
or
7 account A to card B;
8 Figures 3 - 7 are flow charts which illustrate an outline of the
9 application program which manages the financial transactions according to
the
invention. More particularly:
11 Figure 3 illustrates the beginning of a financial transaction between
12 two smart card holders, specifically to obtain a value of the funds to
transfer from
13 holder A to holder B;
14 Figure 4 illustrates validation of holder A's right and financial
solvency to effect the transfer;
16 Figure 5 illustrates the validation process for establishing that
17 holder B is the valid card owner and whether the fund transfer is to card B
or to
18 account B;
19 Figure 6 illustrates deposit of the funds to holder B and a
withdrawal from holder A; and
21 Figure 7 demonstrates how one can avoid re-validation of holder
22 A's right to withdraw funds from card A or account A for repeated and
transfers
23 to other card B holders.
24
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1 DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT
2 Having reference to Fig. 1, a personal digital assistant or PDA
3 computer 7 is provided. The PDA has a central processing unit (CPU) 8,
4 memory (RAM) 9, and a bus 10 through which is accessed disk storage 11, a
comprehensive display 12 and an ergonomic touch-screen input interface 13.
6 The bus 10 further supports a phone interface such as a cellular transceiver
14,
7 two smart card readers 15, 16. The PDA brings sufficient processing power
for
8 operating application programs for interfacing with smart cards and their
9 respective holder's accounts.
Two smart card individuals or holders each possess a smart card,
11 card A and card B, and their own accounts, account A and account B
12 respectively. Holder A is deemed to be the transferor of funds ($) (e.g.
13 purchaser) and holder B is the transferee or recipient of funds (e.g.
vendor).
14 Having reference to Fig. 2, a financial transaction system is shown
in which an application program (Figs. 3 - 7), running on the PDA 7, manages
16 the transfer of funds from holder A to holder B. Excluding the known prior
art of
17 a smart card A-to-smart card B transfer, three novel transfers are
illustrated.
18 Holder A may withdraw and transfer funds from smart card A or from account
A
19 to holder B. Holder B may receive or deposit the transferred funds to smart
card
B or to account B.
CA 02329226 2000-12-20
1 Ln other words holder A, by providing authorization through smart
2 card A, can transfer funds from:
3 ~ smart card A to account B (17);
4 ~ account A to account B (18); or
~ account A to smart card B (19).
6 Simply, having the option to transfer either from an account, or to
7 another account, provides novel transaction flexibility 17,18,19 to the use
of
8 smart cards.
9 It is understood that a system for off-line local transfer of funds
between two smart cards is known. The novel system provides an online
11 transaction which permits transfer of funds between at least one of holder
A's
12 account and holder B's account.
13 Interacting with the holders A,B through the PDA input interface 13
14 and by monitoring the progress on the display 12, the program (Figs. 3-7)
is
activated to establish communications, via the cellular transceiver 14, with a
16 dedicated phone line or with an Internet service provider, either of which
form an
17 online access port 20. The online access port, enables regulated access .to
18 account A and account B, whether they are accounts in the same financial
19 institution or not. '
Both cellular transmissions and the Internet are notorious for being
21 unsecured and usually encryption algorithms are employed for conducting
22 financial transactions as described above. Due to the use of smart cards
23 however, the communications need not be secured across the online access
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1 port 20. The smart cards ensure verification of both the holder's identities
and
2 their right to conduct the transaction locally at the PDA and smart cards
A,B.
3
4 THE TRANSACTION
Having reference to Fig. 3, a holder, usually holder A initiates the
6 transaction by activating the application program 30.
7 The application program 30 enables the PDA to interface with the
8 smart card reader 15 and reader 16 for reading and writing to cards A and B.
9 Once the program is running, the readers 15,16 are interrogated
31 and if card A is missing, then a holder is prompted 32 to insert card A in
11 reader 15. Once card A is present, the holder of the inserted card,
presumably
12 holder A, is challenged 33 locally to validate the holder's right to use
card A.
13 Usually this validation 34 comprises entering of a PIN. Card A's processor
14 validates the PIN without a need for an online inquiry.
The holder is given several PIN entry retries 35 before failing and
16 booting the holder out and restarting the application program 30.
17 Once the holder has been validated 40 as the holder A of card A,
18 then holder A is prompted for a type of transaction 36 such as a card
inquiry 37
19 or a withdrawal 38. If merely an inquiry 37, then the status of card A is
displayed
39 in an appropriate format on display 13 and the program awaits another
21 transaction 31. After establishing the holder has the right to use the
inserted
22 card, for security purposes, an inactivity timer 40 is set. Accordingly, if
the
23 holder A waits too long - e.g. forgets - then the timer 40 expires 41 and
requires
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1 the holder to re-run the application program 30 to re-access the smart
card's
2 functions.
3 At several points during the transaction, the status of the activity is
4 recorded in a database 42 for later review by the user, typically holder A.
The
program 30 and a database 42 can record information including type and time of
6 an access attempt, any transaction failures, successes and identities of the
7 holders. Not all possible recorded activities are illustrated on Figs. 2-7.
8 If a withdrawal 38 is selected, such as to transfer funds to a second
9 holder - holder B, then it becomes germane to get the value 50 of the funds
to be
transferred. As it is necessary to have holder B's card B and validation to
11 proceed, it is clear that obtaining the value of the transaction and the
validation
12 of holder B may be conducted in either order. However, as a check of the
13 financial solvency of holder A could render a transfer to holder B a moot
point, it
14 would be preferable to check the entered value against holder A's card or
account balances before requiring holder B to validate.
16 Having reference to Fig. 4, holder A enters 51 the value of the
17 funds which are to be withdrawn and deposited with holder B. The program
18 automatically checks the card for sufficient funds 52, displays the amount
and
19 prompts for confirmation whether holder A selects the source of the
withdrawal
53 to be card A or account A. If card A is selected, it is checked for
sufficient
21 funds 54. If in fact card A has insufficient stored funds, holder A is
invited to try
22 account A 55 or re-enter the transaction value 51. If holder A selects a
23 withdrawal 56 from account A then the PDA places a cellular call (e-
connects) 57
24 to account A through the online access port 20.
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1 The program 30 conducts handshaking between the program 30,
2 smart card A, online access port and financial institutions (accounts A or
B).
3 Account A is accessed and interrogated 58. If account A has
4 insufficient funds then holder A is again invited to re-enter the
transaction value
51. A transaction log of the transaction failure is recorded in the database
42 for
6 later review by holder A.
7 Once a valid transaction value is obtained from holder A, and
8 turning now to Fig. 5, the program 30 checks for a target 60 for the funds.
The
9 program 30 checks 61 for card B and, if it is not present, a holder is
invited to
insert it 62 into reader B. This holder, now presumably holder B, is
challenged
11 locally 63 to validate the holder's right to use card B. The holder enters
a PIN
12 and card B's processor validates the PIN as being for holder B, again
without a
13 need for an online inquiry. A failure to validate, retries and ultimate
ejection from
14 the program 30 is not shown. Note that the transaction timer 41 of Fig. C1
is still
operating in the background and if the parties (holders A,B) do not remain
active
16 then access to smart cards A and B is revoked and holders A and B will be
17 returned and have to re-enter their security access 33,63.
18 Holders A,B are prompted 64 to direct where the transaction will be
19 deposited. The target may be holder B's card B at 65 or account B at 66. If
the
target is account B, then the program e-connects 67 through the cellular
21 transceiver to confirm the account parameters.
22 Once either card or account targets are set 65,66, holders A and B
23 are interrogated once last time to confirm the value and source of the
funds 68.
24 If not confirmed then the program returns to Fig. 4 and a new value of
source is
14
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CA 02329226 2000-12-20
1 selected. If not confirmed the holders are returned to get a new value and
2 source 50. Once the source and value is confirmed, holders A and B are asked
3 to confirm the target 69. If the target is not confirmed, the holders are
returned
4 to re-select the target 60.
If the source and targets are confirmed, the e-connection 57,67
6 does the transaction 70 which communicates the necessary financial
information
7 to the online access port and the respective financial institutions for
accounts A
8 and B. The protocol for communicating the fund transfer is known and is
similar
9 to that used for terminal transactions for debit and credit cards.
Turning to Fig. 6, the appropriate withdrawal and deposits are
11 prepared 71. A record of the status quo is obtained 72 and stored so as to
12 restore the original values in both the source and the target should an
untimely
13 interruption occur: The value of the funds is deposited 73 to the target
and
14 withdrawn 74 from the source. Upon any deposit or withdrawal error 75, the
transaction is deemed unsuccessful, a transaction log is recorded in the
16 database 42, the holders A,B are informed of same through display 13, and
are
17 returned 76 to get new transaction values 50, a source 53 and a target 60.
18 If successful 80, the transaction log is recorded in the database 42 .
19 and, as shown in Fig. 7, holder A is given the option 81 of retaining his
log-on
information for performing subsequent transactions with a new holder B having
a
21 new card B.
22 In another embodiment of the present invention, and referring
23 again to Fig. 1, the arrangement of the PDA having this touch-screen
display
24 12,13 provides a significant ergonomic advantage to the users to avoid
CA 02329226 2000-12-20
1 confusion and error in conducting the transaction. More specifically, the
readers
2 15 and 16 are accessed through respective slots 115,116 in the face of the
PDA
3 and are located side-by-side. When inserted into their respective slots
115,116,
4 cards A and B continue to have a portion of the cards 215,216 projecting out
of
the slots 115,116 and extend over the display 13. The display is complementary
6 in that instruction to the holders, and holders themselves are identified
100,101
7 on the display so as to be associated with the respective card A,B. For
example;
8 on Fig. 1, holder A is identified as A or "Mary". The name could be
retrieved
9 from the smart card A. Further; holder B is identified as B or "Sue". The
name
of holder B is similarly retrieved from the smart card B. Icons, such as a "$"
and
11 arrow can clearly indicate the direction of the fund transfer from A to B.
12 Additionally, program instructions to the holders A,B are also displayed .
13 associated with the physical slots 115,116 and cards A,B, so as to prompt
the
14 appropriate holder, at the right sequence of the program 30. For example on
Fig. 1, prompts to enter a PIN are displayed adjacent the card. Other icons
can
16 also be displayed at the appropriate part of the program 30 to assist the
holder
17 with the entry of values (such as a numeric keypad 103 using stylus 104) or
to
18 assist with the selection of source and targets.
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1 Certain other advantages are realized by having smart card
2 validated online access to their account through a portable financial
system.
3 Besides the ability for the smart card holder to. conduct larger fund
transactions
4 via their account, financial institutions can also benefit by logging both
holder A
and holder B transactions for detection of fraudulent transactions and
verification
6 that the holder's in fact authorized these transactions by first possessing
the
7 smart cards and secondly for having entered valid authorizations.
17
