Smart Chip Payment Acceptance for Offline IoT Vending
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Solution Overview
Problem
Original equipment manufacturers face challenges in providing interoperable contactless payment solutions for IoT devices due to proprietary mobile applications and fragmented ecosystems, leading to high deployment and maintenance costs, inefficiencies, and unreliable payment acceptance.
Innovation Solution
A smart chip payment acceptance module enables secure, contactless payment transactions using near-field communication between IoT devices and mobile user devices, leveraging cloud-based EMV kernels and companion mobile applications to facilitate transactions in both online and offline environments, reducing the need for costly EMV compliant terminals.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of manufacture
If proprietary mobile applications and protocols are used to provide indirect Internet connectivity, then the payment acceptance solution can be implemented, but the ecosystem becomes fragmented and interoperability is reduced
Solution Approach 1:
The patent implements a universal payment acceptance module that supports multiple payment protocols and communication modes (online and offline) within a single system. The module can interface with different mobile devices and payment systems through standardized EMV chip technology, enabling one hardware platform to serve multiple ecosystem partners without requiring device-specific proprietary applications.
2Reliability
If OEM hardware undergoes certification for meeting payment industry standards, then payment acceptance reliability is improved, but deployment and maintenance costs increase
Solution Approach 1:
The patent uses software-based emulation of EMV chip functionality through a payment acceptance module that replicates the security and transaction processing capabilities of certified hardware terminals. Instead of physically certifying each hardware device against expensive payment industry standards, the system uses software that emulates compliant behavior, reducing certification costs while maintaining transaction security and reliability.
3Reliability
If cloud-based payment processing is used, then payment security and standards compliance are improved, but offline payment capability is lost
Solution Approach 1:
The patent implements a dynamic payment processing system that automatically adapts its operation mode based on network availability. The payment acceptance module detects whether online or offline mode is appropriate and switches between them seamlessly. In offline mode, the system processes payments locally using cached authentication data and cryptographic operations, while automatically synchronizing with the cloud when connectivity is restored, thus maintaining both security and offline capability.
4Ease of operation
If a downloaded version of merchant vending application is required, then transaction functionality is complete, but user convenience is reduced
Solution Approach 1:
The patent extracts the essential payment transaction functionality from the traditional downloaded merchant application and relocates it to a universal payment acceptance module. This allows users to access complete transaction capabilities through the mobile device's existing payment wallet application without requiring separate merchant-specific downloads. The system pulls transaction details and processing capabilities dynamically from the payment module, eliminating the need for users to install multiple applications while maintaining full functional parity.
Applied Scientific Principles
This section explains which scientific principles are used to turn an abstract innovation direction into a practical engineering solution.
Function Achieved in This Case
This solution enhances usability and reduces costs by allowing IoT devices to accept digital payments without internet connectivity, improving customer convenience and reducing resource usage while maintaining security and flexibility for merchants and consumers.
Implementation Method 1
A payment acceptance module associated with a vend device is communicatively coupled to a mobile user device via a near-field communications device providing a short-range communication channel
Data Source
AI summary
A system and method for processing digital payments using a smart chip payment acceptance module associated with an Internet of Things (IoT) or vending device via a virtual EMV terminal process for cloud-based digital payment transactions. A short-range communication channel is provided between a mobile user device and the payment acceptance module. The mobile user device includes a wallet application with an integrated merchant application used to create a payment transaction. An unlock device enables digital secure remote payments (DSRP). A smart chip server connected to a payment gateway can generate an encrypted proof of payment (POP) message indicating completion of the payment transaction. The user can complete the payment transaction using the integrated wallet application within the user device in an online or offline mode of the vend device for seamless interaction with the system by a new user as well as improved flexibility for merchants and consumers.