Secure Payment System Using Encrypted Tokenization
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Solution Overview
Problem
Existing payment systems pose privacy and security risks to customers, as they require sharing personal and sensitive data with merchants and banks, which can lead to data theft and misuse, and customers must carry bank cards, increasing the risk of loss or theft.
Innovation Solution
A payment system utilizing a central system, a wireless device, and a payment card or bank card that allows customers to conduct private and secure transactions without sharing identity or purchasing habits, using encrypted data and eliminating the need to carry physical bank cards, thereby reducing data exposure and theft risks.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If customers use traditional bank cards for payment, then payment transactions can be conducted, but personal and sensitive data must be shared with merchants and banks, increasing privacy and security risks
Solution Approach 1:
The patent extracts sensitive personal data (name, address, card number) from the payment transaction process. Instead of sharing this data with merchants and banks, the system uses encrypted tokenization where only payment verification information is transmitted. The customer's personal identifying information remains isolated in the customer's possession, eliminating the data exposure risk while maintaining payment functionality.
Solution Approach 2:
The patent introduces an intermediary encryption layer between the customer, merchant, and bank. A unique encrypted token is generated that serves as the intermediary medium for payment verification. This token contains no personally identifiable information but can be verified by the payment system, thus mediating the transaction without exposing sensitive data to any party involved in the transaction chain.
2Productivity
If merchants retain customer sensitive data for transaction records, then payment processing can be completed, but the probability of data theft and hacking increases
Solution Approach 1:
The patent extracts sensitive customer data from the merchant's record-keeping system. Instead of storing names, addresses, and card numbers, the merchant system only retains transaction records linked to encrypted tokens. The actual personal data never enters the merchant's database, eliminating the data breach risk while preserving the ability to process and track transactions for business operations.
Solution Approach 2:
The patent creates an encrypted copy or token representation of customer payment information that can be used for transaction verification without exposing the original sensitive data. This token copy contains all necessary verification information for payment processing but is useless for identity theft or fraudulent purposes, thus enabling transaction efficiency without creating data vulnerability.
3Loss of information
If banks notify customers of each purchase through bank statements, then customers can track their spending, but customer privacy is compromised as banks may sell or use the information for their own purposes
Solution Approach 1:
The patent extracts personally identifiable information from bank statement notifications. Instead of sending statements containing customer names, merchant names, and transaction details that reveal spending habits, the system provides notification only of the encrypted token verification and amount charged. The customer can track spending through the notification system without exposing their identity or purchasing patterns to the bank or third parties.
Solution Approach 2:
The patent inverts the traditional bank statement model by having the customer control what information is revealed. Instead of the bank providing comprehensive transaction details that compromise privacy, the customer receives minimal notification information that protects their identity. The inversion shifts control from bank-centric data disclosure to customer-centric privacy protection while maintaining spending awareness.
4Ease of operation
If customers carry physical bank cards for payments, then transactions can be conducted conveniently, but the risk of card loss or theft increases
Solution Approach 1:
The patent replaces the mechanical physical bank card system with an electronic/digital system. Instead of requiring a physical card to be swiped or inserted, the system uses electronic token verification that can be accessed through digital devices or contactless methods. This substitution eliminates the physical object that can be lost or stolen while maintaining the convenience of contactless or near-contactless payment operations.
Data Source
AI summary
With the payment system 02 of the present invention, a customer 06 may conduct a private and secure payment transaction (i) with a merchant 08 using a wireless device 12, (ii) with a merchant using a payment card 100, (iii) with a merchant using a bank card 130 (iv), with a merchant using any one of the wireless device 12, a payment card 100 or a bankcard 130 (v) with a private party using a wireless device 12 and (vi) withdraw cash from an ATM machine using a wireless device 12. In all of these embodiments, a customer does not share his identity, personal sensitive data and purchasing habits with the merchants, the banks or the private party. In many of these embodiments, a customer need not carry his bankcards and or personal checks bearing personal and sensitive data with him/her avoiding the risks of theft or loss.