Patent Application
20090099857
In the modern world, payment instruments are more and more taking the place of cash in commercial transactions. Additionally, an increasing percentage of commerce and commercial transactions is taking place at a distance, over untrusted networks such as the Internet.
While the use of such payment instruments and such networks makes it increasingly convenient to engage in commerce at any place and time, these instruments are subject to theft and fraudulent use. A thief may, by obtaining physical access to a payment instrument such as a credit card or cancelled check, often obtain sufficient information so as to allow him or her to engage in fraudulent transactions. It is often possible for a thief to engage in such fraudulent transactions before the rightful owner of the payment instrument is even aware that the instrument has been compromised.
One method known in the art to reduce these risks is to require the use of a secondary verification method, such as a password or “PIN” known only to the rightful instrument holder, with every transaction. This is inconvenient, however, as a particular instrument holder may have to remember multiple PINs for multiple payment instruments. It may also require payment systems to be redesigned.
Another method known in the art is for the desired target of a payment instrument transaction to initiate a verifying transaction using the instrument, for example, a de minimis deposit or debit of unpredictable amount. Only by contacting the financial or other institution associated with the payment instrument and authenticating one's identity can one learn the nature and amount of the “test” transaction. The user of the payment instrument submits this information back to the desired target of the payment instrument transaction, who then can be certain that other party is authorized to use the payment instrument. One problem with this method is that an actual transfer of value may take place, or multiple transactions may be required. This method may require financial institutions to perform systems integration, process changes, and retraining of customer service staff. Another problem is that, in theory, the amount of the transaction or transactions could be guessed or otherwise predicted.
It would be desirable to have methods and systems for verifying a party's authority to use a payment instrument or financial account.
The present disclosure is directed to solving or overcoming one or more of the problems described above in the context of remote transactions, though much of the distinct functionality of the described methods and systems also has unique value in face-to-face transactions.
Before the present methods are described, it is to be understood that this invention is not limited to the particular methodologies or protocols described, as these may vary. It is also to be understood that the terminology used herein is for the purpose of describing particular embodiments only, and is not intended to limit the scope of the present disclosure, which will be limited only by the appended claims.
It must be noted that as used herein and in the appended claims, the singular forms “a,” “an,” and “the” include plural reference unless the context clearly dictates otherwise. Thus, for example, reference to a “transaction” is a reference to one or more transactions and equivalents thereof known to those skilled in the art, and so forth. Unless defined otherwise, all technical and scientific terms used herein have the same meanings as commonly understood by one of ordinary skill in the art. Although any methods and materials similar or equivalent to those described herein can be used in the practice or testing of the present invention, the preferred methods, devices, and materials are now described. All publications mentioned herein are incorporated herein by reference. Nothing herein is to be construed as an admission that the invention is not entitled to antedate such disclosure by virtue of prior invention.
In an embodiment, a registering party which verifies the authority of a registrant party to use a particular payment instrument or financial account may debit or credit the instrument or account. The claimed instrument holder then may dispute the transaction with the relevant financial institution, which may notify the registering party that the registrant is authorized to use the instrument.
Aspects, features, benefits and advantages of the present invention will be apparent with regard to the following description and accompanying drawing, of which:
A payment instrument is a financial instrument or account which can be used for financial transactions. For example, and without limitation, a payment instrument may be a credit card, a bank account, or an electronic check.
A registrant is a party claiming to have authority to engage in financial transactions using a payment instrument. For example, and without limitation, a registrant may be a customer.
A registering service is a party to whom the registrant represents that the registrant has authority to use the payment instrument. The registering service is interested in verifying that the registrant has authority to use the payment instrument. For example, and without limitation, a registering service may be a payment service provider.
A financial institution is the issuer or verifying authority associated with a particular payment instrument. For example, and without limitation, a financial institution may be a bank.
Upon receiving the account information, the registering service may proceed to debit or credit the payment instrument by performing one or more transactions. These transactions may be performed, for example, over a payment network or using other appropriate means.
The registrant may then be instructed to contact his or her financial institution to dispute the one or more transactions. The disputed amount may be either the full amount, or the registering service may request that the registrant dispute a specified fraction of the transaction. The registrant may contact the financial institution using a website, phone, in person, or by any other means permitted by the particular financial institution. The financial institution may perform authentication of the registrant prior to processing the transaction dispute, using whatever methods it normally uses for processing transaction disputes.
In processing the dispute, the financial institution may reverse or partially reverse the one or more transactions, according to the disputed amount. The registering service may be notified of this reversal, or of the request for reversal, by the financial institution or by the payment network. If the registering service receives notification that the one or more transactions have been fully or partially reversed, or that a request has been made to fully or partially reverse the transaction by the appropriate amount, the registering service may permit the user to use the payment instrument.
It will be appreciated that various of the above-disclosed and other features and functions, or alternatives thereof, may be desirably combined into many other different systems or applications. It will also be appreciated that various presently unforeseen or unanticipated alternatives, modifications, variations or improvements therein may be subsequently made by those skilled in the art which are also intended to be encompassed by the disclosed embodiments.
