Consumer Device Payment Terminal Conversion via NFC

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Solution Overview

Problem

Card not present (CnP) transactions pose a higher risk of fraud and incur higher processing fees compared to card present (CP) transactions, making it advantageous for remote sellers to convert CnP transactions into CP transactions for reduced risk and lower fees.

Innovation Solution

A method and system that enables a consumer device, such as a mobile phone, to act as a payment device for the seller, allowing online transactions to be processed as CP transactions by receiving a payment request, determining the buyer's device, transmitting data to request payment instrument data via NFC or mobile wallet, and completing the transaction securely.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Ease of operation

If CnP transactions are used for remote transactions, then transaction convenience is improved, but fraud risk increases and processing fees are higher

Engineering Contradiction:

Improvetransaction convenienceVSAvoidfraud risk

Core Design Contradiction:

Ease of operationVSReliability

Solution Approach 1:

The patent inverts the traditional payment model by enabling the buyer's device to act as the payment terminal. Instead of the seller's terminal reading the buyer's card remotely (CnP), the buyer's device securely stores and transmits payment instrument data to complete the transaction, effectively converting CnP to CP transaction semantics while maintaining remote convenience

Inventive Principle:

Principle #13The other way round (Inversion)

Solution Approach 2:

The patent introduces a payment service as an intermediary that mediates between the buyer's device and the seller's device. The payment service verifies the buyer's device, manages payment instrument data securely, and facilitates the transaction, enabling CP-level security in a remote CnP context

Inventive Principle:

Principle #24Intermediary (Mediator)

2Ease of operation

If CnP transactions are used for remote transactions, then transaction convenience is improved, but processing fees increase

Engineering Contradiction:

Improvetransaction convenienceVSAvoidprocessing fees

Core Design Contradiction:

Ease of operationVSLoss of energy

Solution Approach 1:

Inventive Principle:

Principle #13The other way round (Inversion)

Solution Approach 2:

The patent changes the transaction type parameter from CnP to CP by modifying how payment instrument data is obtained and transmitted. The buyer's device acts as a payment terminal, using NFC or other contactless technologies to read the payment instrument, thereby changing the transaction classification and associated fees

Inventive Principle:

Principle #35Parameter changes

3Reliability

If buyer's device acts as payment device, then CP transaction security is achieved, but device complexity increases

Engineering Contradiction:

Improvetransaction securityVSAvoiddevice functionality

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent makes the buyer's device universal by enabling it to function both as a regular consumer device and as a payment terminal. The same device that the buyer uses for everyday tasks can also securely store payment instruments and initiate transactions, eliminating the need for separate payment terminals

Inventive Principle:

Principle #6Universality (Multi-functionality)

Solution Approach 2:

The patent enables the buyer's device to serve itself as a payment terminal. The device automatically manages payment instrument data, performs verification, and completes transactions without requiring external payment terminal hardware, reducing overall system complexity

Inventive Principle:

Principle #25Self-service

Applied Scientific Principles

This section explains which scientific principles are used to turn an abstract innovation direction into a practical engineering solution.

Function Achieved in This Case

This approach reduces fraud risks and processing fees associated with remote transactions by enabling secure CP transaction processing, even in online or remote environments, by utilizing NFC and mobile wallet technologies to authenticate and complete transactions.

Implementation Method 1

the payment instrument data was acquired by a near-field communication (NFC) interface of the second device communicating with the payment instrument

Methodology Applied

Scientific EffectNear-field communication (NFC):

Data Source

PatentUS20240378583A1System and method of operating a consumer device as a payment device

Publication Date: 2024.11.14 APPLE INC

AI summary

There is disclosed a method and system for performing a transaction between a buyer and a seller. A payment request may be received from a first device associated with the seller. An identifier of a second device associated with the buyer may be determined. Data corresponding to the payment request may be transmitted to the second device. The second device may request that the buyer present a payment card to the second device. Payment card data may be received, where the payment card data was read by an NFC interface of the second device communicating with the payment card. After receiving the payment card data, a request may be transmitted to complete the transaction. A notification of the transaction result may be transmitted to the first device.