Cryptographic Tokenization with Merchant Identity Binding
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Solution Overview
Problem
Current tokenization methods in payment transactions lack additional security and customization features, which can lead to potential fraud and limited transaction control for merchants and customers.
Innovation Solution
A cryptographic method for tokenized transactions that involves a payment accepting party providing a merchant identity and transaction seed data to the payment offering party, allowing for the generation of a cryptogram for authorization, while ensuring security through a merchant certificate and unpredictable numbers, and enabling channel locking for specific merchant use.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional tokenization methods are used for payment transactions, then transaction processing is simplified, but security against fraud is insufficient and transaction control is limited
Solution Approach 1:
The patent applies preliminary action by pre-establishing cryptographic credentials (public-private key pairs) for both the payment offering party and payment accepting party before the transaction occurs. The payment offering party's public key is embedded in their device, and the payment accepting party receives cryptographic credentials from the transaction scheme provider in advance. This preliminary setup enables secure authentication and channel locking without adding complexity during the actual transaction processing.
Solution Approach 2:
The patent introduces cryptographic intermediaries in the form of digitally signed messages and cryptograms that mediate between the payment offering party and payment accepting party. The transaction scheme provider acts as a trusted intermediary by issuing certificates and enabling services that facilitate secure tokenization. These cryptographic intermediaries verify identities and establish secure channels without requiring the parties to directly trust each other.
2Adaptability or versatility
If cryptographic authentication with merchant certificates is implemented, then fraud is reduced and channel locking is enabled, but the authentication process becomes more complex
Solution Approach 1:
The patent applies local quality by implementing specific cryptographic functionalities at appropriate locations in the transaction flow. Channel locking is applied locally to bind tokens to specific merchants or transaction types, while cryptographic authentication is applied locally at the point of transaction initiation. This selective application of cryptographic measures provides customization and adaptability without requiring complex cryptographic processes throughout the entire system.
Data Source
AI summary
A cryptographic method of performing a tokenised transaction between a payment offering party and a payment accepting party is described. The tokenised transaction is mediated by a transaction scheme. The payment accepting party is provided with a merchant identity and a merchant certificate associated with that identity by the transaction scheme provider. The payment accepting party provides the merchant identity and transaction seed data to the payment offering party. The payment offering party validates the merchant identity and uses the merchant identity and the transaction seed data to generate a cryptogram for the tokenised transaction. The payment offering party provides the cryptogram to the payment accepting party for transmission to the transaction scheme provider for authorisation of the tokenised transaction. A suitable user computing device and merchant computing device for acting as payment offering party and payment accepting party respectively are also described.