System and Method for Distributed Real Time Authorization of Payment Transactions

Abstract

Systems and methods enable the real-time authorization of payment transactions initiated by personal and mobile computing devices. In one embodiment, a financial account server associated with a payment recipient, or payee, is configured to receive a payment data envelope from a payee computing device. The payment data envelope can further include information that allows for the authentication of the payee and payer identities as well as payment restrictions or instructions. The payee financial account server processes the payment data envelope and transmits the envelope to a financial account server associated with the payer. The payer financial server authenticates the payer identification, authorizes the payment transaction, and transmits a transaction status message to the payee financial server, which in turn transmits the message to the payee computing device.

What is claimed is: 
     
         1 . A computer-implemented method of authorizing payment transactions comprising:
 (a) storing, by a first server, payee data and associating, by the first server, the payee data with payee transaction data;   (b) receiving, by the first server, a first payment data envelope associated with a payment transaction from a payee device, the payment data envelope comprising a payer alias, a payee alias, a payee shared secret, and crypto data including encrypted payee data and encrypted payee transaction data;   (c) decrypting, by the first server, the encrypted payee data and payee transaction data from the payment data envelope using the payee shared secret, and retrieving, by the first server, the stored payee data using the decrypted payee transaction data and comparing, by the first server, the decrypted payee data with the retrieved payee data;   (d) validating, by the first server, a payee identity based on the comparison;   (e) based on validating the payee identity, transmitting, by the first server, the payer alias to an RKM server;   (f) receiving, by the first server, a second server IP address from the RKM server; and   (g) transmitting, by the first server, the first payment data envelope to a second server using the second server IP address.   
     
     
         2 . The computer-implemented method of  claim 1  wherein the first payment data envelope further comprises an instruction data array and the method further comprises the steps of:
 (a) receiving, by the first server, from the second server, a transaction status message having a transaction flag with a value of authorized or declined, wherein:
 (i) when the transaction flag has a value of authorized, the first server creates a temporary database record of the payment transaction that is used to update a payee account balance; and 
 (ii) when the transaction flag has a value of declined, the first server transmits the first payment data envelope to a third server based on the instruction data array. 
 
 
     
     
         3 . The computer-implemented method of  claim 1  further comprising the steps of:
 (a) storing, by the second server, a consumer PIN and biometric information and associating, by the second server, the consumer PIN and biometric information with consumer payment information; 
 (b) receiving, by the second server, the first payment data envelope from the first server, the first payment data envelope further comprising a consumer shared secret and consumer crypto data including encrypted biometric data, encrypted PIN and encrypted payment information; 
 (c) decrypting, by the second server, the encrypted PIN, biometric information and payment information from the payment data envelope using the consumer shared secret, retrieving, by the second server, the stored consumer PIN and biometric information using the decrypted payment information and comparing, by the second server, the decrypted consumer PIN and biometric information with the retrieved consumer PIN and biometric information; 
 (d) authorizing, by the second server, the payment transaction based on the comparison of the decrypted consumer PIN and biometric information with the retrieved consumer PIN and biometric information; 
 (e) based on authorizing the payment transaction, generating, by the first server, a transaction status message corresponding to the authorization; 
 (f) transmitting, by the second server, the payee alias to the RKM server; 
 (g) receiving, by the second server, an first server IP address from the RKM server; and 
 (h) transmitting, by the second server, the transaction status message to the first server using the first server IP address. 
 
     
     
         4 . The method of  claim 3  further comprising the steps of:
 (a) receiving, by the second server, a second payment data envelope from an identity management server; 
 (b) storing, by the second server, payer data and associating, by the second server, the payer data with the customer payment information; and wherein 
 (c) the step of authorizing, by the second server, the payment transaction further comprises the operations of (i) retrieving, by the second server, the payer data, (ii) verifying a payer identity by comparing, by the second server, payer data in the first payment data envelope with payer data in the second payment data envelope. 
 
     
     
         5 . The method of  claim 3  further comprising the steps of:
 (a) receiving, by the second server, a second payment data envelope from an identity management server; 
 (b) storing, by the second server, payer data and associating, by the second server, the payer data with the customer payment information; and wherein 
 (c) the step of authorizing the payment transaction, by the second server, comprises the operations of (i) retrieving, by the second server, the payer data, (ii) verifying a payer identity by comparing, by the second server, payer data in the second payment data envelope with the retrieved payer data. 
 
     
     
         6 . The method of  claim 3 , wherein determining whether the payment transaction is authorized further comprises:
 (a) storing, by the second server, one or more payment restrictions to a database;   (b) associating, by the second server, the one or more payment restrictions with the payer; and   (c) determining, by the second server, whether data in the first payment data envelope or a second payment data envelope complies with the one or more payment restrictions.   
     
     
         7 . The method of  claim 6 , wherein the payment restrictions comprise a predetermined upper limit on the payment amount. 
     
     
         8 . The method of  claim 6 , wherein the one or more payment restrictions comprise a geographic limitation on the location of the payment transaction. 
     
     
         9 . The method of  claim 6 , wherein the one or more payment restrictions comprise a limitation on the types of products subject to a payment transaction. 
     
     
         10 . The method of  claim 3 , wherein:
 (a) the first payment data envelope further comprises payment instructions;   (b) the payment information comprises a cost amount; and   (c) the second server is further configured to perform the operations of (i) determining a payment amount based on the payment instructions and the cost amount, and (ii) incorporating the payment amount into the transaction status message.   
     
     
         11 . The system of  claim 10 , wherein the payment instructions include a gratuity amount and determining the payment amount comprises the operation of adding the gratuity amount to the cost amount. 
     
     
         12 . The system of  claim 10 , wherein the payment instructions include a discount amount and determining the payment amount comprises the operation of subtracting the discount amount from the cost amount.