Digital Transaction Authorization With Real-Time Passcode Exchange
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Solution Overview
Problem
Traditional financial instruments such as credit cards, debit cards, and checks are easily stolen and fabricated, leading to significant fraud and financial losses, and online transactions lack effective identity verification, resulting in substantial monetary losses for individuals, organizations, and financial institutions.
Innovation Solution
A computer system that uses a user's personal identification information and official identification document to authenticate transactions without relying on physical cards, employing real-time pass codes and partial personal identification data to secure financial transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If traditional financial instruments (credit cards, debit cards, checks) are used for transactions, then ease of operation is improved, but security and reliability deteriorate due to easy theft and fabrication
Solution Approach 1:
The patent replaces physical financial instruments with their digital counterparts. Instead of using physical cards or checks that can be stolen, the system uses electronic account identifiers and digital authorization codes that are transmitted securely through communication networks. The authorization code serves as a digital copy of the authentication mechanism, eliminating the need for physical carriers while maintaining transactional convenience.
Solution Approach 2:
The patent substitutes the mechanical/physical system of card-based transactions with an electronic/digital system. Rather than physically presenting a card or check, the system uses electronic communication to transmit account information and authorization codes. This replacement of physical mechanisms with electronic processes eliminates theft and fabrication risks associated with physical instruments.
2Ease of operation
If physical financial instruments are mailed to customers, then ease of operation is improved, but loss of substance increases due to theft during mailing and resource consumption
Solution Approach 1:
The patent eliminates the need to physically mail financial instruments by using digital copies of account information. Instead of sending physical cards through the mail, the system transmits electronic authorization codes and account identifiers through secure communication channels, eliminating mailing-related theft and resource consumption.
Solution Approach 2:
The patent extracts the essential authentication function from the physical financial instrument itself. Rather than mailing the entire card or check, the system separates the authentication mechanism into a standalone electronic authorization code that is generated and transmitted independently, eliminating the need for physical mailing infrastructure.
3Ease of operation
If user ID, PIN, and password are used for identification, then ease of operation is improved, but reliability deteriorates due to easy theft and unauthorized access
Solution Approach 1:
The patent transforms the static authentication credentials (fixed PIN and password) into a dynamic authorization code that is generated in real-time for each transaction. This dynamic code changes with each use and is valid only for a specific transaction window, making stolen credentials useless for future transactions. The system updates the authorization code based on transaction context, adding temporal and situational dimensions to authentication.
Solution Approach 2:
The patent performs preliminary authentication verification before generating the authorization code. The system first verifies the user's identity through standard credentials (user ID, PIN, password), then issues a time-limited authorization code for the specific transaction. This two-stage approach ensures that even if the authorization code is stolen, it cannot be used without the original account credentials, providing layered security.
Data Source
AI summary
A digital authorization system enables two parties who mistrust each other to complete a transaction. The digital authorization system issues a new pass code for the transaction. The pass code is sent to a first party of the transaction. The first party demonstrates its consent to the transaction by transferring the pass code to a second party. The second party demonstrates its consent to the transaction by transferring the pass code back to the digital authorization system. The digital authorization system approves the transaction when it receives the pass code from the second party.