Digital Wallet Tokenization for IoT Payment Credential Management

The patent introduces a digital wallet as an intermediary layer between payment cards and merchants/devices. The wallet stores payment credentials and distributes them securely to authorized third parties through tokenization, eliminating the need for users to directly manage credentials across multiple systems. This mediator approach resolves the contradiction by simplifying user operations while maintaining secure centralized control.

The patent uses tokenization to create digital copies of payment credentials that can be safely distributed to multiple merchants and devices. Instead of sharing actual card information, the system generates token representations that function identically for transactions but cannot be used for fraud if compromised. This copying mechanism enables widespread payment convenience while maintaining security.

The patent implements disposable virtual card numbers that can be generated for specific transactions or time periods. These temporary credentials enable efficient transactions with third parties but become invalid after use or expiration, automatically neutralizing any fraud risk. The disposable nature of these credentials resolves the contradiction between transaction efficiency and fraud prevention.

The patent dynamically changes credential parameters such as validity periods, spending limits, and authorized merchants through tokenization. Credentials can be activated or deactivated remotely based on transaction needs, allowing efficient third-party integration while maintaining control over fraud exposure through parameter adjustment.

The patent implements preliminary authentication where users verify their identity once with the digital wallet provider, and this authentication result is cached and reused for subsequent transactions. The wallet maintains secure session tokens that automatically handle authentication for multiple transactions, eliminating repeated authentication requirements while preserving security through the initial verification.

The patent separates authentication into two distinct segments: initial identity verification with the wallet provider, and subsequent transaction authorization using stored tokens. This segmentation allows security-critical authentication to occur once, while time-critical transactions proceed rapidly using pre-established credentials, resolving the contradiction between security and speed.