CA 02353308 2001-07-18
I
Electronic Transaction System and Method
Field of the Invention
s
The present invention relates to financial transactions, and more
particularly to an electronic transaction system and method.
Background of the Invention
io
Potential online consumers have been vary of shopping online largely
due to an unease regarding the provision of personal information over the
Internet. Typically, with existing e-Commerce systems financial information is
centrally stored, providing an opportunity for a single unauthorized person to
is gain access to a large volume of customer information.
Existing systems provide merchant sites with an ability to procure user
information from the system, thereby allouving merchant impersonation
attacks and unauthorized use of user account;>. Credit card fraud has grown
ao exponentially over the past several years, spawning the need for newer,
more
secure methods and cards.
Financial transactions over the Internet that use centrally stored
detailed transaction records are open to intrusive data mining techniques that
Zs are subject to potential misuse, either by unscrupulous merchants or by
unauthorized persons. Existing methods do not provide users with purchase
authorization requests or acknowledgements, allowing access without
requiring persona identification.
3o Typically, customers using existing systems have to register with the
merchant's site, providing required personal information each time that makes
the process tedious and complex. Existing methods attempt to perform
banking duties, but are ill equipped to do so since financial management is a
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highly specialized environment. Consumers typically have to use their
personal credit card account to make purchases, undesirable for security
reasons and limiting in that other forms of payment, such as "electronic
cash",
are unavailable.
s
For the foregoing reasons, there is a reed for an improved financial
transaction method.
Summary of the Invention
io
The present invention is directed to an electronic transaction system
and method. The system, leveraging existing online or fixed infrastructure,
includes a financial transaction facilitation domain, located at the existing
infrastructure's financial transaction facilitation end, a consumer domain
is located at the existing infrastructure's consumer end and a merchant domain
located at the existing infrastructure's merchant end, the merchant domain
having a merchant integrator for integration with the consumer domain and
the financial transaction facilitation domain.
ao The financial transaction facilitation domain, brokering financial
transactions, includes a purchasing server having an authenticated
registration processor for authenticating merchants and consumers registering
with the system, a transaction broker for managing financial transactions of
registered consumers and merchants and a consumerlmerchant authenticator
as for authenticating consumers and merchants involved in financial
transactions.
The consumer domain includes a digital wallet for storing financial
information, a digital wallet password for unlocking the digital wallet and a
3o consumer agent for securely processing financial transactions between the
consumer domain and the financial transaction facilitation domain, using
financial information stored within the digital walllet.
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In an aspect of the present invention, the system further includes one
or more financial institutions integrated into the system to facilitate
transactions.
s The invention provides advantages to all parties involved in
transactions. First, by limiting the sharing of financial information to the
consumer and his or her financial institution, the consumer avoids having to
provide confidential financial information online. Second, financial
institutions'
revenues are increased due to additional debit transaction fees and their
io losses due to fraud decreased.
As well, the merchant is alleviated from having to store consumer's
financial information in their computer systems, thereby reducing overhead
and avoiding the potential disaster of unscrupulous individuals gaining access
is to confidential customer information.
For consumers, in addition to removing the need to give out financial
information directly to the merchant, they haven the convenience of having a
single card/account that is completely portable and usable for all bricks and
zo mortar or e-commerce financial transaction applications.
Other aspects and features of the present invention will become
apparent to those ordinarily skilled in the art upon review of the following
description of specific embodiments of the invention in conjunction with the
2s accompanying figures.
Brief Description of the Drawings
These and other features, aspects, and advantages of the present
3o invention will become better understood with regard to the following
description, appended claims, and accompanying drawings where:
Figure 1 is an overview of an electronic; transaction system according
to the present invention.
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Detailed Description of the Presently Preferred Embodiment
As shown in Figure 1, the present invention is directed to an electronic
s transaction system and method. The system, leveraging existing online or
fixed infrastructure, includes a financial tran;>action facilitation domain
12,
located at the existing infrastructure's financial transaction facilitation
end, a
consumer domain 14 located at the existing infrastructure's consumer end
and a merchant domain 16 located at the existing infrastructure's merchant
to end, the merchant domain having a merchant integrator 32 for integration
with
the consumer domain and the financial transaction facilitation domain:
The financial transaction facilitation domain 12, brokering financial
transactions, includes a purchasing server 18 having an authenticated
is registration processor 20 for authenticating merchants and consumers
registering with the system, a transaction broker 22 for managing financial
transactions of registered consumers and merchants and a
consumerlmerchant authenticator 24 for authenticating consumers and
merchants involved in financial transactions.
The consumer domain 14 includes a digital wallet 26 for storing
financial information, a digital wallet password 28 for unlocking the digital
wallet and a consumer agent 30 for securely processing financial transactions
between the consumer domain 14 and the financial transaction facilitation
2s domain 12, using financial information stored within the digital wallet 26.
The existing infrastructure's consumer end can include wired or
wireless devices.
3o A typical scenario involving the use of the invention would see a user
browsing a merchant's website, shopping for items in a normal fashion, such
as placing items in a shopping cart and checking out. The consumer can then
select the invention as a method of payment from a list of payment methods
CA 02353308 2001-07-18
presented by the merchant.
The user is prompted for a card number, and in an embodiment of the
present invention, if the merchant has setup non-impersonation authentication
s the user is prompted for a non-impersonation password. The merchant then
forwards a digitally signed and encrypted purchase request containing the
purchase details and the users ID and non-impersonation password.
The financial transaction facilitation domain provides the merchant with
io a list of preferred shipping addresses, which they can display to the user.
After selecting a shipping method, the user asks the merchant to process the
purchase. The facilitation domain verifies that the merchant is a valid
merchant and verifies that the user is a valid user. The facilitation domain
then
looks up the location of the agent and provides the user with purchase
details,
is presenting the purchase to the user and asking for verification. If the
purchase
is verified, the agent asks the user for their digital wallet password and
loads
their digital wallet. The agent then steps the user through the purchase.
After the user has selected a method of payment, the agent
2o communicates securely with the facilitation domain to complete the
transaction with appropriate financial institutions. The facilitation domain
acts
as a broker, never handling "cash" flow into or out of accounts; instead
transferring funds from the user's account to the merchant's account without
storing any of the user's account information. The facilitation domain only
Zs uses the account information for the duration of the transaction,
subsequently
erasing it from memory.
If any errors occur during the transaction, the facilitation domain
notifies both the merchant and the agent <appropriately and attempts to
3o reconcile any problems. Communicating with the agent and merchant and
prompting for alternative action, the facilitation domain reconciles problems
such as an agent being turned off, insufficient funds, financial institution
unavailable and network connection lost.
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If a hostile attacker manages to penetirate a consumer domain, they
would still require both the persona identification password and the digital
wallet password to make unauthorized use of a consumer's account
s
The system provides a consumer with a more familiar financial
transaction environment than existing online methods. In providing an
increased level of comfort to the consumer, rnerchants can benefit from an
increase in business.
io
The merchant is alleviated from having to store consumer's financial
information in their computer systems, thereby reducing overhead and
avoiding the potential disaster of unscrupulous individuals gaining access to
confidential customer information. Consumers do not have to be concerned
is that they may be providing financial information to unscrupulous or
careless
vendors, since the invention provides a high level of assurance that the
merchants are duly authorized by the system.
Since the consumer receives a purchase authorization, purchases by
2o additional cardholders such as children can be monitored andlor declined by
the primary cardholder. Since the only password used online is the persona
verification password, which is incapable of providing access to a digital
wallet, the invention minimizes risks such as the growing problem of "identity
theft".
2s
In an embodiment of the present invention, the system further includes
one or more financial institutions 32 integrated into the system to facilitate
transactions.
so In an embodiment of the present invention, the purchasing server 18
further includes a real-time data miner 34 for providing information valuable
to
the merchant, yet still protecting consumer priv<~cy.
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Although the present invention has been described in considerable
detail with reference to certain preferred embodiments thereof, other versions
are possible. Therefore, the spirit and scope of the appended claims should
not be limited to the description of the preferred embodiments contained
s herein.
