GB2385186A

GB2385186A - User identification in electronic financial transactions

Info

Publication number: GB2385186A
Application number: GB0202805A
Authority: GB
Inventors: Andrew Robert Byde
Original assignee: Hewlett Packard Co
Current assignee: HP Inc
Priority date: 2002-02-07
Filing date: 2002-02-07
Publication date: 2003-08-13
Also published as: GB0202805D0

Abstract

A card is read by an appropriate extraction means 42, 43, which can establish communication with a processor unit with access to a database of personal identification details 44, at least one detail corresponding to a personal detail of the holder of the card which cannot be determined from an inspection of the card for example signature. The processor unit then transmits the item of personal data corresponding to the cardholder to a point of sale device 45, where the personal detail is displayed to the merchant 46.

Description

IMPROVEMENTS RELATING TO ELECTRONIC FINANCIAL TRANSACTIONS This invention relates to improvements in methods and apparatus for effecting an electronic financial transaction. It especially relates to an improvement in the security of electronic card purchases at a point of sale such as in stores, hotels, garages and the like.

In this text the term"electronic financial transaction"is to be interpreted broadly to cover any transaction in which a card holder provides a card containing account details to a merchant (i. e. a shopkeeper) in order for that merchant to electronically transfer money to or from the account of the cardholder. By use of the term"account"it is to be understood that we may mean a bank account or a building society account or any other similar kind of account from which money can be paid from or paid in to.

It is now more common for account holders to make purchases of goods or services at a point of sale by providing the merchant with a card containing details of their bank or building society account than actually handing over currency. Indeed, such a form of payment offers many advantages to both the cardholder and the merchant. The customer does not need to carry money around with them and so is less likely to be robbed. The merchant, on the other hand, need not worry about receiving forged currency or a stolen cheque.

For security, it is most common for the account details to be provided to a merchant by physically handing over the card. Almost without exception these cards include a magnetic strip, which defines an area of machinereadable memory. The memory stores the account details of the cardholder and may also store other security information. To read the card the merchant needs a card reader which is connected across a network to a server provided by the card issuer (i. e. a bank). The reader extracts account

details from the magnetic strip and sends them, along with details of the amount of money to be taken from or paid into the account, to the server. The bank then sends a confirmation back to the merchant that the transaction has been allowed. The card readers do not allow the merchant to read all of the information on the card. This keeps the transaction secure.

In order to ensure that only the authorised holder of the account card is able to make a purchase using the card it is current practise to provide a portion of the card upon which the holder of the card writes his/her signature when the card is issued. This signature should match a copy of the signature held by the card issuer.

Whenever a purchase is made with the card the cardholder is asked to provide a signature-typically on a receipt-which the merchant then checks against the signature on the card. Depending upon the credit limit of the cardholder and/or the merchant, the merchant must send a signal to the server across the network confirming that they have checked the signature of the cardholder. Only when this signal is sent will the server complete the transaction requested and authorise payment.

If the signature provided by the cardholder and that on the card do not match the merchant should not accept the payment and refuse the transaction. A copy of the signed receipt may also then be sent to the card issuer where it can again be checked for authenticity, or sent to the police for investigation if it is found to be a forgery.

An example of a widely used and respected system of effecting electronic transactions at a point of sale within the United Kingdom is the Switch network operated by many of the United Kingdom banks and building societies.

The applicant has appreciated that the presence of the signature on the credit card itself limits the security of the present system in that it is possible for a thief to steal a card and to forge the signature at the point of sale. If the card has not been reported stolen by the user a merchant will reasonably assume that the forged signature is the authentic signature of the cardholder in many circumstances unless it is a very poor forgery.

It is an object of the present invention at least partially to ameliorate the security problems presented by the system described above.

In accordance with a first aspect the invention provides apparatus for use in making an electronic financial transaction between an card holder and a merchant comprising: a card issued to a cardholder, which includes at least one identification feature; a card information extraction means which is adapted to extract the identification feature from the card; a processing unit which includes a database of personal identification details, at least one detail corresponding to a personal detail of the holder of the card which cannot be determined from an inspection of the card; communication means which permits the card information extraction means to interrogate the database and permits the central storage unit to transmit the item of personal data corresponding to the cardholder to the point of sale device; and display means upon which the personal detail is displayed to the merchant.

By providing for a database of personal details which are accessed at the point of sale the merchant is provided with information which they can ask the cardholder to supply before the transaction is effected. Because the information is personal to the cardholder and cannot be determined by a

thief from the card then the security of the transaction is considerably improved compared with a request for a signature printed on a card.

It is most preferred that the personal detail is unique to the cardholder, and it is especially preferred that it is a detail that cannot be supplied by anyone other than the cardholder.

In a most preferred arrangement the personal detail may comprise a sample of the cardholders signature. The display may reproduce this sample. It is then possible for the merchant to ask the cardholder to sign a receipt or other document in the normal way and use this signature to verify that the true cardholder is using the card.

Of course, other details could be used. For example, the personal detail may comprise a photograph of the cardholder.

The card information extraction device may comprise an area of memory and a keypad which the merchant can use to enter the card information into the memory. However, it is envisaged that the information extraction device will comprise an electronic card reader which is adapted to extract information stored in a memory provided on the card.

A suitable card reader may be a magnetic swipe card reader which extracts information from a magnetic strip provided on at least one side of the card as it is swiped through the reader. Such devices are well known in the art and are widely in use at the time of filing of this patent application as a reliable means of extracting information from magnetic strips provided on magnetic cards.

The communication means most conveniently comprises a modem or other means of permitting the card reader at the point of sale to transmit and receive information to/from the central storage unit.

It is considered most likely that in a practical embodiment of the present invention the central storage unit will be located some distance from the point of sale. This will typically comprise one or more servers which will be maintained by an acquirer for or on behalf of a card issuer and will provide secure storage of the personal details held in the database. It may include at least one server which is connected to an area of electronic memory that stores the database of details. The acquirer is an organisation responsible for collecting authentication requests from merchants and in many cases for providing a payment guarantee to the merchant.

The apparatus may include a large number, possibly many thousands or hundreds of thousands of cards with each card issued to a different cardholder. Of course, a single cardholder may have more than one card.

Also, the apparatus may include many card readers which are supplied to different merchants. All of the readers may be connected to the central storage unit which may contain details in the database for every cardholder.

In some arrangements, the central storage unit may be duplicated many times with each central storage unit storing or having access to a common database. For example, two storage units may be provided with each unit being connected to a subset of the total number of card readers depending upon their distance from the units. For example, one unit may be located in the north of a country (i. e. Newcastle, England) with the other in the south (London, England) or possibly in a different country. The card readers in the north would then communicate with the unit in Newcastle and those in the South with the unit in London. In the event of a failure of one unit the readers could be diverted to the remaining functioning central storage unit.

Of course, the precise implementation details may vary greatly depending upon the resources of the provider of the apparatus and upon the desired topography of the network connecting the units to the card readers. The

skilled man is again referred to the example of the United Kingdom Switch network as an example of a suitable topography.

The display may be arranged to present a graphical image of the personal detail to the merchant. This may be an image of a signature or a photograph and may optionally be a coloured image. The exact image displayed will be determined in part at least by the format in which the information is stored in the database. It is expected that a wide variety of image storage formats may be used. Examples of suitable image formats are Tiff, gif, Jpeg ( anymore). The format in which the images are sent over the network may be the same as that in which they are stored in the database or may be a different format. The image may be displayed on a screen or additionally or alternatively it may be printed.

In accordance with a second aspect the invention provides a method of effecting a transaction at a point of sale, the method comprising the steps of : providing a card to a cardholder which includes at least one identification feature; providing a merchant with a card reader located at the point of sale which is adapted to read the identification feature from the card; transmitting the identification feature from the merchant to a central processing unit which includes a database of personal identification details, at least one detail corresponding to a personal detail of the holder of the card which is not determinable from an inspection of the card; transmitting the requested personal detail from the remote storage unit back to the merchant; displaying the requested personal detail to the merchant; and verifying that the cardholder is the person that matches the displayed personal detail.

The step of verification will depend upon the type of personal detail displayed to the merchant. In a most preferred method the personal detail may comprise a signature, the step of providing the card to the card holder preferably comprise providing a card which is not to be signed and the verification step comprises asking the card holder to provide a sample of their signature.

Of course, other personal details may be provided such as a photograph of the cardholder. In this case, the verification step will simply comprise comparing the appearance of the cardholder with the displayed photograph.

In accordance with a third aspect the invention provides apparatus for use by a merchant at a point of sale comprising: a card reader adapted to extract an identification feature from a credit card presented by a purchaser; a communication means which transmits a request across a network from the apparatus to a remotely located database which contains at least one personal detail of the purchaser and receives a reply from the remotely located database including at least one personal detail extracted from the database that corresponds to the identification feature; and a display for presenting a copy of the received personal detail to the merchant.

The display may comprise a liquid crystal display panel.

The apparatus may comprise a single housing which supports the display and includes the card reader, a processor, and a modem which transmits and receives information across the network to the remote database.

It is preferred that a shield is provided around the display such that the information presented on the display can only be seen by the merchant and not by the purchaser. Of course, this can be achieved without a screen by

providing a suitable barrier between the display and the purchaser, which does not have to be integral to the apparatus.

The card reader may comprise a magnetic card reader, which is adapted to extract information stored in a magnetic strip provided on the purchaser's card. However, other types of card reader could be provided which extract information from other types of storage such as an optical card reader.

In accordance with a fourth aspect the invention provides a method of verifying the identity of a cardholder at a point of sale comprising the steps of : extracting an identification feature from a credit card presented by a cardholder; transmitting a request across a network from the merchant to a remotely located database which contains at least one personal detail of the purchaser and receiving a reply from the remotely located database including at least one personal detail extracted from the database that corresponds to the identification feature; displaying a copy of the received personal detail to the merchant; and verifying that the displayed details correspond to the person presenting the credit card.

In accordance with a fifth aspect the invention provides a credit/debit card for use in combination with the apparatus of the first and third aspect of the invention or for use in carrying out the method of the second or fourth aspects of the invention.

There will now be described, by way of example only, one embodiment of the present invention with reference to the accompanying drawings of which:

Figure 1 is a general schematic of the elements required to make a transaction in accordance with one aspect of the present invention; Figure 2 is a perspective view of the front and (b) of the back of a typical card, which is to be issued to a cardholder; Figure 3 is a perspective view of a card reader for use by a merchant to read the cards of Figure 2; and Figure 4 is a flow diagram presenting the various steps carried out during the making of a transaction using the apparatus of Figures 1 to 4.

An apparatus for making purchases and verifying the identity of the person making a purchase comprises three key elements. These are shown in block form in Figure 1 of the accompanying drawings. A first element is a plastic card 10, which is issued to a cardholder by a card issuing authority such as a bank. A typical card 10 is illustrated in more detail in Figures 2 (a) and (b) of the accompanying drawings. It comprises a plastic body 12, which has on a rear face (shown in Figure 2 (b) ) an elongate strip 13 of magnetic storage material made up of tiny iron-based magnetic particles in a plasticlike film. This strip 13 stores information about the cardholder, which is written into the strip by the card issuer. Information is stored by magnetising the particles in the strip in either north or south pole direction. As such, the strip can be considered to work in much the same way as a cassette tape.

The information stored in the strip is separated into three tracks, each. 110 inches wide in accordance with ISO/IEC Standard 7811. It will typically include the number of the bank account held by the card issuer at the bank that issued the card. This account number may also be embossed upon the front of the card (as shown in Figure 2 (a) ) of the accompanying drawings.

It may also be printed onto the rear face as shown in Figure 2 (b).

Other optional features include a hologram 14 which makes it much harder for a forger to produce a fake card. It is important in the context of this embodiment that the card does not carry a facsimile of the cardholders signature.

The second element comprises a card reading apparatus 20, which is located at the point of a sale for use by a merchant. The card reading apparatus 20 is also shown in more detail in Figure 3 of the accompanying drawings. It comprises a housing 21, which contains a processor (CPU 22), an area of electronic memory 23, a modem 24 that transmits signals from the processor 22 to a network and receives signals from the network to the processor. The area of memory 22 contains programme instructions which are executed on the CPU.

A magnetic strip reader 25 is located at the top of the housing of the card reading apparatus. The reader includes a sensing element located in a side wall at one end of a slot. The slot is dimensioned to receive the card 1 with the magnetic slot on the card alongside the sensing element. The card can then be swiped through the slot and the sensing element reads the information from the stripe in a known manner. This information is retrieved by the processor and written to the area of memory 23.

The housing also contains a modem that transmits signals from the processor to a network and receives signals from the network to the processor.

A keypad 27 is also provided on the front of the housing for use by a merchant. The keypad includes the numerical keys 0-9 and further keys to denote the start of a transaction and to confirm the validity of a transaction. Finally, a display is mounted on the front of the housing below the card reader with a keypad provided below the card reader.

The card reading apparatus 20 will usually be located on a counter at a sale point in a store, and may be mounted alongside or even form an integral part of a cash register. The card reader allows the merchant to extract details from the card. This will be given by the user to the merchant in order to make a purchase. The extracted information will include account details, which identify the cardholder to the issuer of the card.

Once the details have been extracted the merchant presses one of the keys on the keypad which initiates a transaction. The processor detects the key press and retrieves a telephone number form the memory. The modem dials the telephone number which connects the apparatus across a network to a modem 34 of a remote database 30 provided by the card issuer (i. e. the bank) or by a company that provides data management services to the card issuer. This may be located at a central site where it can be accessed by the apparatus of many different merchants.

The database is accessed and managed by a server which in this embodiment has the architecture commonly referred to as a PC architecture based around the Intel X86 series of chips and compatibles. The server includes a processor 31 which is connected via a bus to a memory 32 and a hard drive. The memory stores programme instructions for the processor.

The hard drive is used to store a database 33 of personal identification details for a large number of cardholders. The personal details are indexed by the account details of the cardholders, which are stored in the magnetic strip on the card 10. Although many types of personal details are suitable, the personal details stored in this embodiment comprise a sample of a cardholders signature.

After the merchant has read a card 10, and the modem has dialled up and connected to the server 30, the apparatus 20 sends the cardholders details across the network to the server 30. The server in turn searches the

database on the hard drive for the personal details for that cardholder and sends the details back across the network to the merchants card reader.

Once received by the card reader 20 the personal details are stored in the memory and subsequently the card reader displays the sample signature on a display screen 26 located at the top of the housing. At this point the merchant can ask the cardholder to provide a fresh signature as verification of their identity. Only if this fresh signature matches the displayed signature should the merchant accept the transaction.

Once the merchant has verified the identity of the cardholder, he/she enters the amount of the transaction via the keypad and presses a further key on the keypad to indicate that the transaction should be accepted. A further signal is then sent by the modem to the card issuers server along with details of the amount of the transaction. The cardholder's account is then automatically debited by the cardholder's bank in the usual way.

In operation, the manner in which the three elements of the system are used to make a transaction can be summarised as follows: merchant presses key on keypad to indicate a new transaction 40; cardholder presents card to merchant 41; merchant swipes card through card reader 42; card reader extracts identification details 43; modem sends details to remote database 44; personal details located in database and sent back to merchant 45; personal details presented on display screen 46; cardholder presents signature 47; merchant checks details correct 48; merchant enters amount of transaction using keypad; merchant indicates transaction is valid using enter key on keypad 48; and modem sends transaction details to card issuer across network.

If the signature does not match the merchant rejects 49 the transaction.

By displaying to the merchant a personal detail (such as a signature) which cannot be determined by looking at or reading the card a high level of security is provided. It is no longer easy for a thief or forger to copy a cardholder's signature, as they do not have access to a sample of the signature to practise from. It is therefore envisaged that the increase in security will provide a useful tool in the reduction of card fraud, which will benefit the genuine cardholder, the card issuer and the merchant.

Claims

CLAIMS 1. Apparatus for use in making an electronic financial transaction between a card holder and a merchant comprising: a card issued to a cardholder, which includes at least one identification feature; a point of sale device which is adapted to extract the identification feature from the card; a remote processing unit which includes a database of personal identification details, at least one detail corresponding to a personal detail of the holder of the card which cannot be determined from an inspection of the card; communication means which permits the card information extraction means to interrogate the database and permits the remote processing unit to transmit the item of personal data corresponding to the cardholder to the point of sale device; and display means upon which the personal detail is displayed to the merchant.
2. Apparatus according to claim 1 in which the personal detail is unique to the cardholder.
3. Apparatus according to claim 2 in which the personal detail comprises a detail that cannot be supplied by anyone other than the cardholder.
4. Apparatus according to claim 3 in which the detail comprises a sample of the cardholder's signature.

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5. Apparatus according to any preceding claim in which the point of sale device comprises an electronic card reader which is adapted to extract information stored in a memory provided on the card.
6. Apparatus according to claim 5 in which the electronic card reader comprises a magnetic swipe card reader which extracts information from a magnetic strip provided on at least one side of the card as it is swiped through the reader.
7. Apparatus according to any preceding claim in which the communication means comprises a modem.
8. Apparatus according to any preceding claim in which the remote processing unit comprises one or more servers which are maintained by the card issuer or on behalf of a card issuer and provide secure storage of the personal details held in the database.
9. Apparatus according to any preceding claim in which the display may is arranged to present a graphical image of the personal detail to the merchant.
10. A method of effecting a transaction at a point of sale, the method comprising the steps of : providing a card to a cardholder which includes at least one identification feature; providing a merchant with a card reader located at the point of sale which is adapted to read the identification feature from the card; transmitting the identification feature from the merchant to a remote processing unit which includes a database of personal identification details, at least one detail corresponding to a personal detail of the holder of the card which is not determinable from an inspection of the card;

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transmitting the requested personal detail from the remote processing unit back to the merchant; displaying the requested personal detail to the merchant; and verifying that the cardholder is the person that matches the displayed personal detail.
11. The method of claim 10 in which the personal detail comprises a signature, the step of providing the card to the card holder comprises providing a card which is not to be signed and the verification step comprises asking the card holder to provide a sample of their signature.
12. Apparatus for use by a merchant at a point of sale comprising: a card reader adapted to extract an identification feature from an electronic card presented by a card holder; a communication means which transmits a request across a network from the apparatus to a remotely located database which contains at least one personal detail of the purchaser and receives a reply from the remotely located database including at least one personal detail extracted from the database that corresponds to the identification feature; and a display for presenting an image of the received personal detail to the merchant.
13. The apparatus of claim 12 which comprises a housing which supports the display and includes the card reader, a processor, and a modem which transmits and receives information across the network to the remote database.
14. Apparatus according to claim 12 or claim 13 in which a shield is provided around the display such that the information presented on the display can only be seen by the merchant and not by the purchaser.

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15. Apparatus according to any one of claims 12 to 14 in which the card reader comprises a magnetic card reader, which is adapted to extract information stored in a magnetic strip provided on the purchaser's card.
16. A method of verifying the identity of a card holder at a point of sale comprising the steps of : extracting an identification feature from a credit card presented by a card holder; transmitting a request across a network from the merchant to a remotely located database which contains at least one personal detail of the card holder and receiving a reply from the remotely located database including at least one personal detail extracted from the database that corresponds to the identification feature; displaying a copy of the received personal detail to the merchant; and verifying that the displayed details correspond to the person presenting the card.
17. A card for use in combination with the apparatus of any of claims 12 to 15 or or for use in carrying out the method of any of claims 10,11 or 16.