POS Terminal Virtual Card Transaction Security
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Solution Overview
Problem
Conventional point-of-sale (POS) terminals for credit card transactions are limited in their ability to handle internet-based instructions and secure financial information, particularly in generating and managing virtual credit card transactions efficiently, which can lead to vulnerabilities in data security and transaction processing.
Innovation Solution
Implementing a POS terminal system that establishes a trust relationship with financial institutions, generates virtual card numbers (VCNs) for secure transactions, and omits VCNs from communications between customer and supplier systems, using encryption and tokenization to protect sensitive information, allowing for internet-based instruction processing and secure transaction execution.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If conventional POS terminals process credit card transactions directly, then transaction processing is simple and direct, but security vulnerabilities increase and internet-based instruction handling capability is limited
Solution Approach 1:
The patent introduces a financial institution device as an intermediary between the customer device and POS terminal. This intermediary receives internet-based payment instructions, generates secure virtual card numbers (VCNs), and communicates with the POS terminal, thereby enhancing security while managing system complexity through specialized intermediate components
Solution Approach 2:
The transaction processing system is segmented into distinct functional components: customer device for initiating payments, financial institution device for generating VCNs and managing security, and POS terminal for processing transactions. This segmentation allows each component to specialize in specific security functions, improving overall reliability
2Reliability
If virtual card numbers (VCNs) are communicated between customer and supplier systems, then transaction processing is straightforward, but data security and risk of data breaches decrease
Solution Approach 1:
The patent extracts the sensitive virtual card number (VCN) from the communication path between customer and supplier systems. Instead of transmitting VCNs directly, the system uses the financial institution device to generate and manage VCNs, communicating only transaction authorization information between customer and supplier, thereby enhancing data security while maintaining operational simplicity
Solution Approach 2:
The system creates a functional copy of the card transaction process using virtual card numbers generated by the financial institution device, rather than transmitting actual card details. This copying approach allows straightforward transaction processing while protecting sensitive data through the use of generated virtual identifiers
3Adaptability or versatility
If POS terminals handle only traditional card transactions, then device functionality is simple, but adaptability to internet-based payments and modern transaction methods is limited
Solution Approach 1:
The POS terminal is enhanced with multi-functionality to handle both traditional card transactions and internet-based payment instructions. The terminal can process conventional swipe/tap transactions while also receiving and processing electronic payment authorizations from the financial institution device, providing universal payment processing capability without excessive complexity
Solution Approach 2:
The financial institution device serves as an intermediary that bridges traditional POS functionality with modern internet-based payment systems. It translates electronic payment instructions into formats compatible with conventional POS terminals, enabling adaptability without requiring complete terminal redesign
Data Source
AI summary
Techniques for managing secure virtual card number (VCN) transactions are disclosed. A POS terminal that processes payments receives an instruction in a secure digital communication over a network to process a payment from a customer to a supplier. Based on receiving a payment request via a network, the POS terminal identifies a VCN associated with the request. The POS terminal validates the VCN and processes the payment request. The POS terminal communicates the VCN to the supplier's bank to initiate a funds transfer between the supplier's bank and the customer's bank that issued the VCN. Upon completion of the transaction, the banks confirm the transaction to the customer and the POS terminal.