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US-12619974-B2 - System and method for conducting secure financial transactions

US12619974B2US 12619974 B2US12619974 B2US 12619974B2US-12619974-B2

Abstract

A system and method for conducting secure card-present debit and credit card electronic financial transactions involving no swiping or inserting or imprinting a card are provided. The method includes identifying, by a computing system, a first payment source account held by a card holder; receiving, by computing system, transaction data associated with a transaction initiated by the card holder with a merchant using the first payment source account, the transaction having a transaction amount; requesting, by a computing system, via a first network a first transfer of the transaction amount from the first payment source account within a predetermined time; determining a “card-present” status; storing the meta data associated with the transaction in a database wherein the meta data includes at least the card-present status; and transferring the transaction amount to pay the merchant.

Inventors

  • Dmitriy Kolchin

Assignees

  • iWallet, Inc.

Dates

Publication Date
20260505
Application Date
20221229

Claims (15)

  1. 1 . A computer-implemented method for conducting a secure card-present transaction without physically swiping, inserting, or imprinting a card, the method executed by one or more processors of a computing system and comprising: identifying, by the computing system, a first payment source account held by a cardholder; receiving, by the computing system, transaction data associated with a transaction initiated by the cardholder with a merchant using the first payment source account, the transaction having a transaction amount; requesting, via a first network, a first transfer of the transaction amount from the first payment source account within a predetermined time; capturing, using a mobile device camera, one or more images of a payment card while concurrently obtaining, by a navigation facility of the mobile device, a first geolocation of the mobile device and embedding the first geolocation as metadata of the captured image; pre-validating the captured image by programmatically analyzing image quality to detect at least blur and glare using frequency-domain or Laplacian-based operators, and automatically re-prompting for recapture unless a predefined quality threshold is met; transmitting, from the computing system to a device of the cardholder, an electronic authentication request over a secure channel that authenticates the parties by digital certificates and establishes encrypted communications; in response, receiving from the cardholder device an electronic signature together with a second geolocation of the cardholder device at a time of signing, and decrypting the electronic signature after successful authentication; collecting and storing, as part of a transaction record, metadata associated with the signature writing process and the transaction, the metadata including at least the first geolocation, the second geolocation, and an indicator of a card-present status; determining, by the computing system, the card-present status for the transaction by computing a distance between the first and second geolocations and setting the status to “card-present” when the distance is within a predetermined threshold; and transferring, by the computing system, the transaction amount to pay the merchant.
  2. 2 . The method of claim 1 , wherein the card-present status condition is met when the card is present, or the cardholder is present, or both.
  3. 3 . The method of claim 1 , wherein the fee associated with the transaction is reduced by a predetermined amount if the card-present status condition is met.
  4. 4 . The method of claim 1 , wherein the card-present status is further determined by using a GPS location of the merchant, such that if the location of the merchant and the cardholder are within a predetermined range, the card-present condition is met.
  5. 5 . The method of claim 1 , wherein the card-present status is determined by making a video call to the cardholder if the cardholder is remotely located.
  6. 6 . The method of claim 1 , wherein the card-present status is determined by using a smartphone of the merchant or the cardholder to read special non-visible NFC markers or to write special non-visible NFC markers into an NFC memory.
  7. 7 . The method of claim 1 , wherein the card-present status is determined by taking a picture of the card by the merchant's phone or the cardholder's phone.
  8. 8 . The method of claim 1 , wherein the card-present status is determined by making a video of the card by using a camera of the merchant's phone or the cardholder's phone.
  9. 9 . The method of claim 1 , wherein the card-present status is determined by verifying any physical object in the possession of the cardholder.
  10. 10 . The method of claim 1 , wherein the card-present status is determined by the knowledge of certain information possessed by the cardholder.
  11. 11 . The method of claim 1 , wherein the card-present status is determined by at least one physical characteristic attributable to the cardholder.
  12. 12 . The method of claim 1 , wherein the card-present status is determined by a holographic image detection on the cardholder's card.
  13. 13 . The method of claim 12 , wherein the holographic image detection comprising taking multiple pictures or videos of the card at different angles and verifying that a hologram is moving.
  14. 14 . The method of claim 12 , wherein the holographic image detection comprising taking a picture or video of the card using multiple cameras at the same time in order to detect a holographic moving image with high accuracy.
  15. 15 . A system for conducting a secure card-present transaction without physically swiping, inserting, or imprinting a card, comprising: one or more processors; and one or more memories storing instructions which, when executed by the one or more processors, cause the one or more processors to: identify a first payment source account held by a cardholder; receive transaction data associated with a transaction initiated by the cardholder with a merchant using the first payment source account, the transaction having a transaction amount; request, via a first network, a first transfer of the transaction amount from the first payment source account within a predetermined time; receive from a mobile device one or more images of a payment card captured by a mobile device camera and a first geolocation obtained by a navigation facility concurrently with the capture, the first geolocation being embedded as metadata of the captured image; pre-validate the captured image by detecting blur and glare using frequency-domain or Laplacian-based operators and request recapture unless a predefined quality threshold is met; transmit, to a device of the cardholder, an authentication request over a secure channel that authenticates the parties by digital certificates and establishes encrypted communications, and receive, in response, an electronic signature together with a second geolocation of the cardholder device at a time of signing, the system being configured to decrypt the electronic signature after successful authentication; store, in a database, a transaction record including metadata comprising at least the first geolocation, the second geolocation, and an indicator of a card-present status; determine the card-present status by computing a distance between the first and second geolocations and setting the status to “card-present” when the distance is within a predetermined threshold; and transfer the transaction amount to pay the merchant.

Description

CROSS-REFERENCE TO RELATED APPLICATIONS This application is a continuation-in-part of U.S. non-provisional patent application Ser. No. 17/398,590 filed on August 10, 202, U.S. non-provisional patent application Ser. No. 17/882,916 filed on Aug. 8, 2022, and U.S. non-provisional patent application Ser. No. 17/985,419 filed on Nov. 11, 2022, the contents of which are incorporated by reference in their entirety. TECHNICAL FIELD The present invention relates to a system and computer-implemented methods for conducting secure electronic financial transactions. BACKGROUND ART Electronic transactions make it possible to conduct a payment efficiently and with minimal physical interaction between a consumer and a merchant. However, electronic transactions come with a number of risks to both the merchant and the consumer. Since surcharge fees laws changed, a consumer can be responsible for paying the processing fee. These processing fees can vary depending on the card chosen for the transaction, meaning that a consumer could pay a high fee when a lower fee was possible. In addition, surcharging does not work for tips collected at a restaurant because a restaurant cannot add a fee on top of the tips on the check after the consumer has left the building. Also commonly used are automated clearing house (ACH) transactions. ACH is a form of electronic payment. Specifically, ACH is an electronic fund transfer through an ACH network including the Federal Reserve Bank from one account to another account, such as to a checking or savings account. ACH is typically used to process payments for settlement within a period of time, such as a few business days. ACH transactions are settled in a manner similar to the way checks are settled. The clearinghouse takes all ACH files received daily from its member banks, sorts them by the originating bank (the bank where the check was cashed or deposited) and the paying bank (the bank against which the check was drawn), totals the accounts, and credits or debits appropriate accounts accordingly. When the transaction is an automated clearing house (ACH) transaction, there is a risk that the transaction will not finalize because it takes days to process an ACH transaction. The use of applications on computing devices allow for these electronic transactions to be calculated in real-time meaning that tips can be calculated in real-time on the customer's phone. This is further possible because information from the bank identification number (BIN) and other data make it possible to detect the fee in real time. Therefore, there is a need for a system that calculates electronic transactions and their respective surcharges in real-time as well as a system that secures payment when the original payment does not go through. SUMMARY OF THE EMBODIMENTS The present invention relates to conducting electronic transactions through a computing device between a consumer and a merchant. The present invention proposes to introduce a novel process to conduct electronic transactions in real-time. This novel process will allow a consumer to determine the total payment including the exact surcharge before processing the electronic payment. In addition, this novel process will allow a merchant to receive a final electronic payment in real-time because this system mandates a primary e-check payment and a back-up credit card payment. The back-up credit card payment is a pre-authorized feature that secures the e-check. This means if the e-check payment bounces, the credit card payment can be immediately charged. If the e-check does not bounce, then the credit card payment will be released. This system will give the merchant the ability to recoup losses by the use any connected payment source in case the original ACH transaction has failed. The transactions may include, but are not limited to credit cards, debit cards, and automated clearing house (ACH). A consumer will be able to automatically choose payment method based on merchant type and payment source type. In order to utilize this invention, a consumer will need to set up a consumer account by visiting a website. Once the account is set, a consumer will need to connect a bank checking account to fund the iWallet account and add a credit card. In some embodiments the electronic transaction will be conducted on a consumer's mobile phone. The mobile phone possesses capabilities of GPS location identification, radio and near-frequency communication capabilities, mobile data/internet functionality, optical scanning capabilities, and have a mobile payment application that scans a QR code. QR codes can be printed on paper, stickers, or any other physical media. The electronic payment will initiate when the merchant sends a payment by email, text, or QR-code. Use of this system will help to resolve disputes for ACH and CC payments because this novel system will provide more context in terms of GPS location, description of the business, and notes of the transactions. In