Certified POS Terminal for Secure Mobile Commerce
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Solution Overview
Problem
Current mobile commerce transactions are considered Card Not Present (CNP) transactions, leading to higher processing fees and increased fraud risk due to the lack of secure verification of the cardholder's presence and card usage, as they do not utilize certified tamper-proof POS terminals.
Innovation Solution
Integrating a Payment Card Industry (PCI) certified POS terminal into consumer devices, such as smartphones or tablets, using NFC, magnetic, or optical card readers to verify the presence of a card and cardholder, enabling secure online transactions akin to Card Present (CP) transactions by encrypting communications and dynamically binding the secure element with the payment service provider.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If mobile commerce transactions are conducted remotely without physical card verification, then transaction convenience is improved, but fraud risk and processing fees increase
Solution Approach 1:
The system performs preliminary verification by requiring the physical card to be present and scanned at a certified POS terminal before the online transaction can proceed. This preliminary action of verifying card presence and authenticity at a secure location prevents fraud while enabling convenient remote transactions, as the cardholder must physically visit a certified terminal to initiate the online purchase.
Solution Approach 2:
A certified POS terminal acts as an intermediary between the cardholder and the online merchant. The terminal verifies the physical card's authenticity and establishes a secure connection, serving as a trusted mediator that enables remote transactions with the same security level as in-person payments, thereby reducing fraud risk while maintaining convenience.
2Reliability
If physical card verification at certified POS terminals is required for online transactions, then fraud risk is reduced, but device complexity increases
Solution Approach 1:
The certified POS terminal is designed to perform multiple functions: it serves as a physical card reader, a secure communication gateway, and an authentication server. By consolidating these functions into a single universal device, the system reduces overall complexity while maintaining high security standards for verifying card presence and enabling online transactions.
Solution Approach 2:
The system uses the cardholder's own physical card as the verification medium, eliminating the need for separate authentication devices or complex biometric systems. The card itself contains all necessary security elements, and the certified terminal automatically verifies its authenticity, making the process simple and reducing system complexity.
3Productivity
If remote card-not-present transactions are processed, then processing speed is improved, but processing fees increase
Solution Approach 1:
The system performs preliminary verification at a certified POS terminal before the online transaction is processed. This preliminary authentication of card presence and validity prevents fraud and enables the transaction to be processed with the same low fees as in-person transactions, rather than incurring higher card-not-present fees, while maintaining fast processing speed.
Data Source
AI summary
Logic to perform a point of sale (POS) transaction as Card Present. Logic may communicate with a web site of an online vendor to process a payment to the online vendor as a certified POS device. Logic may communicate with a payment service provider associated with the online vendor to process the payment in response to communicating with the web site. Logic may interact with a card reader to obtain a packet to process the payment with a payment instrument to verify the presence of the payment instrument. Logic may encrypt communications to transmit an authorization request to the payment service provider to process the payment with encrypted communications via a secure element agent of the certified POS device, the authorization request to comprise the packet to verify that the payment instrument is present for the transaction. And logic may receive an approval of the authorization request for the payment.