System and Method of Processing PIN-Based Payment Transactions Via Mobile Devices

Abstract

A system and method for using a Personal Identification Number (“PIN”) to authenticate payment transactions via a mobile device coupled to a reader device is described. The reader device may be modified to not only read and encrypt first identification information from a payment medium such as a magnetic strip of a payment card, but also receive a PIN from the mobile device and encrypt the PIN. The mobile device may be configured to prompt for and receive the PIN. The PIN may be communicated to the reader device for encryption. The mobile device may receive the encrypted first identification information and encrypted PIN and communicate the encrypted data to an adaptive payment server that decrypts the encrypted data for processing the payment transaction. The system may be used to securely process PIN-based payment transactions using a mobile device that is communicably coupled to a reader device.

What is claimed is: 
     
         1 . A mobile device for processing a payment transaction, comprising:
 a processor configuring the mobile device to:
 receive, from a reader device communicably coupled to the mobile device, encrypted first identification information, wherein the first identification information identifies an account to be used for the payment transaction; 
 prompt for and receive a Personal Identification Number (“PIN”) associated with the account, the PIN being used to authenticate the payment transaction; 
 communicate the PIN to the reader device, wherein the PIN is encrypted by the reader device; 
 receive, from the reader device, an encrypted PIN; and 
 communicate the encrypted first identification information and the encrypted PIN for processing the payment transaction. 
   
     
     
         2 . The mobile device of  claim 1 , wherein the payment transaction comprises a funds transfer from one account to another account or a balance inquiry of the account. 
     
     
         3 . The mobile device of  claim 2 , wherein the funds transfer is processed via an electronic funds transfer (“EFT”) request. 
     
     
         4 . The mobile device of  claim 1 , wherein the mobile device is communicably coupled to the reader device via a wired or wireless link. 
     
     
         5 . The mobile device of  claim 1 , further comprising a headphone jack, wherein the mobile device is communicably coupled to the reader device via the headphone jack. 
     
     
         6 . The mobile device of  claim 1 , wherein the mobile device communicates the encrypted first identification information and the encrypted PIN to an adaptive payment server that processes the payment transaction. 
     
     
         7 . An adaptive payment server for processing payment transactions using a PIN received from a mobile device, comprising:
 a processor configuring the server to:
 receive, from the mobile device, an encrypted first identification information that identifies an account, an amount of funds to transfer, and an encrypted Personal Identification Number (“PIN”); 
 decrypt the encrypted first identification information and the encrypted PIN; and 
 process the payment transaction based on the decrypted first identification information and the decrypted PIN. 
   
     
     
         8 . The adaptive payment server of  claim 7 , wherein the payment transaction comprises a funds transfer or a balance inquiry. 
     
     
         9 . The adaptive payment server of  claim 7 , wherein the payment transaction comprises a funds transfer, the server further configured to:
 receive an indication of an amount of funds to be transferred and a target account identifier that identifies a target account that is to receive the amount of funds to transfer; and   process the payment transaction based on the target account and amount of funds to transfer.   
     
     
         10 . The adaptive payment server of  claim 7 , wherein the server is configured to process the payment transaction via an EFT network. 
     
     
         11 . The adaptive payment server of  claim 10 , wherein the server is configured to generate an EFT request to the EFT network. 
     
     
         12 . The adaptive payment server of  claim 7 , wherein the PIN and the first identification information are encrypted using the same encryption technique. 
     
     
         13 . The adaptive payment server of  claim 12 , wherein the PIN and the first identification information are encrypted using a single hardware encryption device communicably coupled to the mobile device. 
     
     
         14 . A reader device for processing payment transactions, comprising:
 a reader configured to read, from a tangible medium, first identification information associated with an account; and   a processor configuring the reader device to:
 encrypt the first identification information and communicate the encrypted first identification information to a mobile device; 
 receive, from the mobile device, a Personal Identification Number (“PIN”) from the mobile device; 
 encrypt the PIN; and 
 communicate the encrypted PIN to the mobile device. 
   
     
     
         15 . The reader device of  claim 14 , wherein the reader is configured to read a magnetic strip, a smart chip, a Radio Frequency Identification (“RFID”) tag, or a Near Field Communication (“NFC”) tag. 
     
     
         16 . The reader device of  claim 14 , wherein the reader device is communicably coupled to the mobile device via a wireless or wired link.