Token-Based Payment System for Secure Non-Cash Transactions
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Solution Overview
Problem
Current consumer payment methodologies are inherently insecure, leading to financial loss and identity theft due to the recording and storage of credit/debit and account data during transactions, making them vulnerable to theft.
Innovation Solution
A token-based system that facilitates non-cash payments without using personally identifiable information, utilizing a trusted third-party framework to generate and manage Immutable-IDs for entities, enabling secure transactions through Digital Debt Obligations (DDOs) that are digitally signed and verified, ensuring privacy and trust within the payment process.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If credit/debit card data is recorded and stored during transactions, then transaction processing is enabled, but security is compromised leading to identity theft and financial loss
Solution Approach 1:
The patent extracts and removes personally identifiable information (PII) from the transaction data structure. Instead of storing actual card numbers, names, and other PII, the system uses tokenized representations that preserve transaction functionality while eliminating the harmful information elements that enable identity theft and fraud.
Solution Approach 2:
The patent introduces an intermediary tokenization layer between the payment card data and the transaction processing system. Tokens act as mediators that enable secure transactions without exposing actual cardholder information, thereby breaking the direct link between transaction data and personally identifiable information.
2Ease of operation
If personal identifiable information is used in transactions, then payment verification is achieved, but vulnerability to theft and fraud increases
Solution Approach 1:
The patent creates cryptographic copies of payment verification data in the form of tokens. These token copies contain sufficient information to verify payments and authorize transactions but are mathematically derived representations that cannot be reverse-engineered to reveal the original personally identifiable information, thus enabling verification while preventing theft.
Solution Approach 2:
The patent transforms the parameters of payment data from human-readable personally identifiable information into cryptographic token parameters. This parameter transformation maintains the essential verification functionality while changing the data format into a form that is useless to fraudsters who intercept the data.
3Productivity
If traditional payment systems store account data, then transaction processing is simplified, but the system becomes a target for criminal activity
Solution Approach 1:
The patent segments the payment processing system into distinct functional layers: token generation, token storage, token processing, and redemption. This segmentation isolates the sensitive information handling from the transaction processing, allowing efficient transactions to proceed using tokens while the actual personal data remains protected in separate secure environments.
Data Source
AI summary
A system and method for token-based transactions to facilitate non-cash payments without using personally identifiable information data is disclosed. The system generally includes at least one computer processor and a module, which when executed by the at least one computer processor, causes the computer processor to exchange data representative of a request for identification with a computing device of a Payer Entity. The computer processor generates a signed Digital Debt Obligation, including purchase metadata comprising currency and at least one preferred payment provider, and sends the signed digital debt to the computing device of the Payer Entity. The computer processor receives data representing an approved Digital Debt Obligation from the computing device of the Payer Entity and verifies the approved Digital Debt Obligation. The computer processor sends data representative of the approved Digital Debt Obligation to a Payment Processor and queries the Payment Processor for supported payment methods. The computer processor then submits the approved Digital Debt Obligation to a payment provider's service entry point to complete the transaction.