Method and system for verifying use of a financial instrument

Abstract

Methods and systems for verifying that a registrant is authorized to use a particular payment instrument are presented. A registering service initiates one or more verifying transactions involving the instrument. The registrant contacts the issuing financial institution to dispute the transaction and verifies his or her identity to the issuing financial institution, resulting in the registering service being contacted and verifying to the registering service that the registrant owns or controls the payment instrument.

Description

BACKGROUND OF THE INVENTION[0001]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.[0002]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.[0003]One method known in the art to reduce these risks is to require the use of a secondary verificatio...

AI Technical Summary

Benefits of technology

This system effectively verifies the authority to use a payment instrument, reducing fraudulent transactions and minimizing inconvenience, while being applicable to both remote and face-to-face transactions.

Problems solved by technology

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.

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.

This is inconvenient, however, as a particular instrument holder may have to remember multiple PINs for multiple payment instruments.

One problem with this method is that an actual transfer of value may take place, or multiple transactions may be required.

Another problem is that, in theory, the amount of the transaction or transactions could be guessed or otherwise predicted.

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