Online Debit Transaction Intermediary System
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Solution Overview
Problem
Current systems do not enable PIN debit card transactions over the Internet, as existing online payment methods are cumbersome, costly, and unfairly assign risk, particularly for online merchants who incur credit card commission costs.
Innovation Solution
A method allowing users to make real-time debit card payments online by pre-registering their PAN, encrypted PIN, and encryption key, using a debit card reader and PIN pad, and associating user names and secret IDs with these credentials, enabling standard POS transactions between payors and payees.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If PIN debit card system is used for online transactions, then transaction security is improved, but device compatibility is worsened since POS debit card equipment is not applicable for online merchants
Solution Approach 1:
The patent introduces an online payment system that acts as an intermediary between the debit card and online merchants. This system captures card details through a virtual terminal and processes transactions without requiring physical POS equipment at the merchant location, thereby enabling PIN debit functionality online while maintaining security protocols
Solution Approach 2:
The patent creates a virtual replica of the POS transaction environment by capturing card data through a virtual terminal that mimics the functionality of physical card readers. This allows the system to process debit card transactions online by copying the essential data capture and encryption functions of POS equipment without requiring the actual hardware
2Adaptability or versatility
If credit cards are used for online sales, then online transaction capability is improved, but transaction cost is worsened due to credit card commission costs
Solution Approach 1:
Instead of using credit card processing for online transactions (which incurs higher commissions), the patent inverts the approach by enabling direct debit card processing online. This reverses the traditional flow where online merchants must accept credit cards, and instead allows them to process debit transactions directly at lower cost, effectively turning the online payment model upside down
3Adaptability or versatility
If electronic purses or wallets are developed for online payments, then online payment capability is improved, but system complexity is worsened due to cumbersome procedures and trusted third party requirements
Solution Approach 1:
The patent extracts the essential payment functionality from complex electronic purse and wallet systems that require trusted third parties. By isolating the core debit card processing capability and implementing it through a virtual terminal, the system eliminates the need for separate electronic money storage and complex authentication hierarchies, reducing overall system complexity while maintaining online payment capability
Data Source
AI summary
An online payment method is disclosed which permits users to make realtime debit card payments over the Internet. The payor and payee pre-register with the system by sending their PAN, encrypted PIN and encryption key to the system database using a debit card reader, and then enter user names and secret IDs to be associated with the PAN and PIN numbers. When an online transaction is made the payor enters its user name and ID which is sent to the system along with the transaction amount and the payee user name. The system sends out a standard POS transaction using the stored PAN, encrypted PIN and encryption key. If approved it sends out a credit POS transaction to the payee in the same way.