Token-Based Payment Security for Virtual Currency
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Solution Overview
Problem
Existing transaction systems expose account holders to potential account misappropriation as account information is shared among multiple parties during transactions, lacking effective security measures.
Innovation Solution
Implementing a token-based system where virtual payment instruments, associated with payment devices or digital wallets, replace actual account information for transactions, providing enhanced security and flexibility through the use of tokens that can be single-use or multi-use, and enabling standard unauthorized transaction protections.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If account information is shared among multiple parties to complete transactions, then transaction processing is enabled, but account security deteriorates due to potential account misappropriation
Solution Approach 1:
The patent introduces tokens as intermediary elements that represent account information without exposing the actual account details. These tokens are shared among multiple parties (merchants, payment processors) to enable transactions while the real account information remains protected on the issuing financial institution's servers. The token acts as a mediator that allows transaction processing while maintaining account security.
Solution Approach 2:
The patent creates token copies that represent the original account information. Instead of sharing the actual account number and details, the system generates token representations (such as tokenized card numbers) that can be used for transactions. These token copies function identically to the original account information for transaction purposes but cannot be used to access or misappropriate the actual account.
2Productivity
If actual account information is used for transactions, then direct payment processing is achieved, but security protections against unauthorized transactions are lost
Solution Approach 1:
Tokens serve as intermediary representations that enable payment processing efficiency while providing built-in security protections. The tokenization system maintains the efficiency of direct payment processing by allowing seamless transaction flow, while simultaneously providing unauthorized transaction protection through token validation mechanisms and the ability to revoke or limit token usage without affecting the underlying account security.
3Adaptability or versatility
If virtual currency is used for transactions, then alternative payment method is provided, but unauthorized transaction protections are not available
Solution Approach 1:
The patent creates a universal token system that can represent both traditional fiat currency accounts and virtual currency accounts. The same tokenization infrastructure and security protections apply regardless of the underlying currency type. This allows the system to provide adaptability for different payment methods (virtual currency, traditional banking) while maintaining consistent unauthorized transaction protections through the token framework.
Data Source
AI summary
Embodiments of the present invention are used in a token based financial transaction system, whereby individual tokens associated with one or more financial accounts provided to one or more third parties. Embodiments credit an amount of a virtual currency in at least one bank account of a customer, wherein the at least one bank account has an associated amount of funds that is increased by the credit of the amount of virtual currency; generate a payment token associated with the at least one bank account of the customer; receive a transaction request to process a transaction using the token; determine that the transaction request is associated with a transaction having a transaction amount less than or equal to the amount of funds associated with the at least one bank account; and approve and settle the transaction.