Registers – Systems controlled by data bearing records – Banking systems
Reexamination Certificate
1999-10-14
2002-05-28
Le, Thien M. (Department: 2876)
Registers
Systems controlled by data bearing records
Banking systems
C235S380000, C235S492000
Reexamination Certificate
active
06394343
ABSTRACT:
BACKGROUND OF THE INVENTION
1. Field of the Invention
The present invention is in the field of electronic transfer of monetary values using smart card technology wherein a credit card sized card includes internal electronics or other circuitry enabling the card to receive and store data representing monetary values and to selectively transfer data to another device to effect the transfer of all or a portion of the stored monetary values.
2. Description of the Related Art
Credit cards are commonly used in monetary transactions wherein the owner of a credit card presents the card to a vendor (either a person or a machine), and the vendor provides the credit card owner with something of value (e.g., a product, airline tickets, a room in a hotel, a meal, etc.). The typical credit card is a passive device that includes human readable characters embossed or printed on one side to identify the credit card owner and the owner's account number. Generally, credit cards also have a magnetic stripe on an opposite side. The magnetic stripe can be automatically “read” by a credit card reader so that the credit card information (i.e., the owner's name and account number) can be transferred from the card to a data processing system (e.g., to the credit company via a telecommunications system). After verifying that the credit card information is valid, that the credit card owner has an acceptable account balance, and that the credit card has not been reported stolen, the data processing system typically sends an authorization message to the vendor informing the vendor that the transaction can proceed. Eventually, the credit card owner receives a bill from the credit card company that includes the amounts of completed transactions that the credit card owner must pay to the credit card company. During the entire process, the credit card itself is not modified, nor is the information on the magnetic stripe modified.
Unlike credit cards, “smart cards” include electronic circuitry or other circuitry that enable the smart card to actively participate in a financial transaction. A smart card can include an electrical connection, an optical coupler, a magnetic coupler, an RF coupler, or other data transfer interface, to enable the smart card to transfer data to and receive data from another transaction device, such as a vendor's point of sale (POS) terminal, an automatic teller machine (ATM), a computer interface, a telephone interface, an internet connection, or the like. Typically, a smart card includes internal memory for storage of data and includes an interface for transferring data to and from the memory. In addition, the smart card may include internal processing capability to enable the smart card to engage in more complicated data transfer transactions, such as, for example, transactions which require the smart card owner to enter a personal identification number (PIN) or transactions which require the smart card and the other transaction device to perform a security algorithm (e.g., an exchange of passwords) before proceeding with a transaction. The smart card may advantageously include a keyboard to enable the smart card owner to enter identification information and to enter transaction amounts. For a more detailed discussion and overview of smart card technology, see, for example, P. L. Hawkes, et al. (Eds.),
Integrated Circuits Cards, Tags and Tokens, New Technology and Applications
, BSP Professional Books, (ISBN 0-632-01935-2), 1990.
One typical use for a smart card is as a replacement for cash. Rather than entering into a number of credit card transactions and then receiving a consolidated bill from the credit card company on a monthly basis, the owner of a smart card purchases finds (i.e., monetary values) that are stored in the memory of the smart card. Then, when the smart card owner engages in a financial transaction (e.g., a product purchase, or the like), a portion of the monetary values is electronically transferred to another device (e.g., a point of sale terminal), and the transferred monetary values are deducted from the smart card memory. Thus, the smart card is used in a similar manner to the use of cash. Depleting the monetary value in the smart card memory has the same effect as depleting the cash in a wallet or purse. When the monetary value is low or is entirely depleted, the smart card owner must return to a bank or to an appropriate terminal (e.g., an ATM terminal) to have the smart card recharged with the data equivalent of cash just as the user of cash must return to the bank or ATM to obtain more cash. See, for example, U.S. Pat. No. 5,884,292, which is incorporated by reference herein.
Although smart cards have the advantage of providing a convenient way of engaging in cash-free financial transactions, the smart cards have the disadvantage of not being as flexible as cash. In particular, a business person, a shopper or a traveler operating on a cash basis has the benefit of obtaining cash in many denominations. When a large amount of cash is desired, a portion of the cash is obtained in large denominations and a portion of the cash is obtained in smaller denominations. Furthermore, unless the cash holder is expecting a particularly large cash transaction on a particular day, the cash holder will likely keep only a portion of the available cash on his or her person so that all the cash will not be subject to being lost or stolen at the same time. The remaining portion can be kept in a home, office or hotel safe until needed. The owner of a typical smart card does not have this advantage. If a smart card having a stored data value representing a large monetary amount is lost or stolen, the entire amount is gone, as if the smart card owner had lost a wallet with all the cash in the wallet. The smart card owner could decide to carry a number of smart cards with varying cash values stored therein, but such a decision basically returns the smart card owner to the previous situation of having a large number of monetary devices rather than being able to carry only a single device. Another option is to carry a smart card having a smaller monetary value, but this option requires the smart card owner to return to the bank or ATM more frequently and does not provide the smart card owner with the flexibility of varying the monetary value in the smart card in response to varying needs (e.g., a last minute purchase of a ticket, car repairs while on vacation, etc.).
In view of the foregoing, there is a need for a smart card system that would enable the smart card owner to have the benefit and flexibility of cash while retaining the small size, convenience and security of the smart card technology.
SUMMARY OF THE INVENTION
The present invention is directed to a system which provides the convenience and flexibility of cash and which also provides the security and ease of carrying a smart card. In particular, the present invention permits the owner of a smart card to vary the monetary value stored in a particular smart card without requiring the owner to return to a bank, an ATM, or the like. The smart card system in accordance with the present invention provides the ease and immediacy of use of cash and allows transactions to occur between two smart cards. The system described herein uses smart cards capable of both credit and debit functions.
The present system is based upon a smart card capable of immediately effecting monetary transactions between individuals or between two cards owned by the same individual by crediting monetary value to the memory of a first smart card while debiting monetary value from the memory of a second smart card. The monetary transaction preferably occurs by directly interfacing the first smart card with the second smart card. By providing this capability of transferring the monetary value directly from one smart card to another smart card, a system of such cards provides the equivalent of cash and can replace the use of cash for many transactions. In particular, by engaging the first smart card with the second smart card, a predetermi
Berg Jon N.
Nelson Eric L.
Fureman Jared J.
Knobbe Martens Olson & Bear LLP
Le Thien M.
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