CA2329226A1 - Pda with integrated e-commerce for financial transactions - Google Patents

Abstract

A system and a method is provided comprising a portable computer for accepting two smart cards and having a cellular transceiver for effecting online financial access to both smart cards user's accounts. A first withdrawing holder A can connect through the online access port for accessing their account A or the second depositing holder B's account B for accessing larger values of funds which can be transferred to a depositing holder's smart card B or account B. If sufficient funds are available at smart card A, the transfer can be from card A and directly to the depositing holder's account. The card readers are arranged so that when the cards A and B are inserted, they project over a touch-screen display. This arrangement permits touch-screen displayed instructions to be associated with the appropriate card and thereby minimize risk of a incorrect transaction.

Description

i 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.

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 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.

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, 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.

i 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.

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 i 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:

i 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, 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.

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.

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.

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 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.

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 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.

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 i 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 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.

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.

Claims (5)

THE EMBODIMENTS OF THE INVENTION IN WHICH AN
EXCLUSIVE PROPERTY OR PRIVILEGE IS CLALMED ARE DEFINED AS
FOLLOWS:

1. A portable financial transaction system for transferring funds between first and second holders of first and second re-writable smart cards A
and B, each card capable of electronic deposit and withdrawal from bank accounts A and B respectively through an online access port, the system comprising:
(a) a computer having a display, an input interface, and having means for communicating with accounts A and B through the online access port;
(b) a first reader for interfacing between the computer and the first smart card A;
(c) a second reader for interfacing between the computer and the second smart card B; and (d) an application program which runs on the computer and which, through the display and input interface, interacts with holders A and B for i) validating holder A's right to withdraw funds, such validation occurring locally at the computer and without accessing the online access port, ii) validating holder B's right to deposit funds, such validation occurring locally at the computer and without accessing the online access port, iii) determining a source and value of the funds to be transferred, be it from the smart card A or the account A, iv) determining a target for the funds, be it the smart card B or the account B, and v) communicating with the online access port so as to communicate holder validation and transfer the funds from holder A
to holder B, at least one of the source or target being account A or account B.

2. The portable financial transaction system as recited in claim 1 wherein the means far communicating with accounts A and B comprises a cellular transceiver operated by the computer.

3. The portable financial transaction system as recited in claim 2 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 of funds in the first smart card A and if the transfer value is greater than the stored value then the program interacts with the holders to select account A.

4. The portable financial transaction system as recited in claim 1 further comprising an ergonomic interface for reduced incidence of transaction error comprising:
(a) the first reader is located so that the first smart card projects partially over the display;
(b) the second reader is located so that the second smart card projects partially over the display; and (c) the program causes information to be presented on the display so that instructions regarding the first smart card A are displayed adjacent the projecting smart card A and instructions regarding the second smart card B are displayed adjacent the projecting smart card B:

5. A method for transferring funds between first and second holders of first and second re-writable smart cards A and B wherein each card A,B is capable of electronic deposit and withdrawal from bank accounts A and B
respectively through an online access port, the method comprising the steps of:
(a) providing a computer having a display, an input interface, first and second readers for interfacing with the first and second smart cards A,B;
(b) inserting the first and second smart cards in the first and second readers respectively;
(c) validating holder A's right to withdraw funds without accessing the online access port;
(d) validating holder B's right to deposit funds without accessing the online access port;
(e) determining a source and value of the funds to be transferred, be it from the smart card A or the account A;
(f) determining a target for the funds, be it the smart card B or the account B; and (g) communicating with the online access port so as to communicate holder validation and transfer the funds from holder A to holder B, at least one of the source or target being account A or account B.