Method and System for a Virtual Safe

CROSS REFERENCE

0001This application is a continuation of U.S. patent application Ser. No. 11/175,767 filed on Jul. 6, 2005, which is a continuation of U.S. patent application Ser. No. 10/269,033 filed on Oct. 11, 2002, which is a continuation of PCT Application No. PCT/CA01/00504 filed on Apr. 17, 2001, claiming priority from Canadian Patent Application No. 2,305,247 filed on Apr. 14, 2000.

TECHNICAL FIELD

0002The invention relates to the field of electronic commerce systems, and more specifically to secure electronic commerce systems employing virtual smart cards.

BACKGROUND OF THE INVENTION

0003With the rapid increase in the number of consumers having access to the World Wide Web, a corresponding need for, conducting commerce over the Internet has emerged. However, concerns with online security have undermined the evolution of electronic commerce as security issues have affected the required level of trust between online retailers and consumers. In traditional business transactions, trust is established face-to-face and supported by documentation that reduces liability. Today, traditional business transactions are being transformed. In particular, the use of smart cards is expanding, further affecting the level of trust retailers and consumers have in electronic commerce.

0004A smart card, also called a chip card, integrated circuit card, memory card or processor card, is typically a credit card-sized plastic card that includes one or more integrated circuits. A smart card can interface with a point of sale terminal, an ATM, or with a card reader integrated with a computer, telephone, vending machine, or, a variety of other devices. A smart card may be programmed with various types of functionality such as stored-value applications, credit or debit applications, loyalty applications, cardholder information, etc. Although a plastic card is currently the medium of choice for smart cards, it is possible to implement these cards using a smaller form factor. For example, a smart card could be attached to a key chain or it could be as small as a single integrated circuit chip. A smart card may also be implemented as part of a personal digital assistant telephone, or some other, form.

0005Typically, to increase user trust, a smart card contains a hardware encryption module for performing a variety of encryption algorithms. Encryption may also be performed in software. A typical process for issuing smart cards and for reconciling transactions performed with these cards in the consumer context may be described as follows. A terminal supplier builds the equipment used by a service provider to provide goods and/or services to consumers via smart card and service payment terminal. A card supplier contracts with an integrated circuit manufacturer and a card manufacturer for integrated circuits and plastic card bodies, respectively. The card supplier then embeds the integrated circuits in the cards and initializes them with a serial number. The card supplier then delivers these cards to a card issuer. In conjunction with a clearing and administration system, the card issuer, personalizes new cards and then transfers these cards to individual cardholders (i.e. consumers). A cardholder may then charge the card with value prior to use. Alternatively, the card may be delivered with value pre-loaded. The cardholder may then use the card at a service payment terminal to purchase goods and/or services from the service provider. Upon purchase, the terminal debits the value of the purchase from the card, thus creating a service payment The system may be implemented, for example, using Visa, MasterCard, American Express, Discovery, Players Card International, bank and financial institution debit cards, and other cards.

0006In this typical process, all transactions are sent in a data file from the service payment terminal, via an acquirer, to a clearing and administration system. Accumulated service payment batches from other terminals are also sent to the clearing and administration system. Based upon this collection data, the clearing and administration system receives money from the card issuer. The money received from the card issuer, of course, originates from the cardholder. The clearing and administration system then transfers a lump sum to the acquirer using a suitable settlement service (e.g. Visa, MasterCard American Express, Discovery, Players Card International, etc.) to pay the various service providers having a relationship with the acquirer. Based upon the collection data, the acquirer then transfers an appropriate amount of money to each service provider reflecting the value of the goods and services that that service provider provided to cardholders that period (e.g. day). The value of the goods and services provided is based on deductions from cardholders' smart cards.

0007A consumer typically uses a service payment terminal in a face-to-face context in order to purchase goods at a store or directly from the terminal itself. The service payment terminal can be an attended device or it can be integrated into a self-service device such as a vending machine or public telephone. For example, the service payment terminal may be incorporated into a soda machine in order to dispense sodas to a customer where the customer pays by inserting a smart card. Or, the service payment terminal may be a point-of-sale (POS) terminal typically found at the check-out counter or a store.

0008In general, service payment terminals allow consumers to use smart cards for the payment of goods and services. A service payment terminal generates a payment result from a transaction and bundles individual payment results into a collection for transfer to a clearing and administration system. The service payment terminal then transfers funds debited from consumers' smart card to the merchant whose goods and services were purchased through the terminal. Thus, a variety of goods and services may be purchased using a smart card from a merchant having a service payment terminal on premises. In addition, a consumer with a smart card may purchase goods or services from a merchant over the Internet.

0009Now, in order to purchase a product or service with a smart card, the card must first be loaded with value or with an identity. Typically, “stored-value” cards are loaded with value while “debit” and “credit” smart cards are loaded with the identity of the card holder. With respect to stored-value cards, value can be loaded onto the card in a variety of ways. For example, while inconvenient for the consumer, the consumer, may physically travel to a bank or other institution that has an automated teller machine (ATM), or other similar device, in order to load value onto the smart card. With respect to loading value onto a smart card, the consumer may insert money into a value loading machine and have a corresponding value loaded onto the card. Or, the consumer may use a debit card to deduct value from the consumer's bank account for transfer to the card. Additionally, a credit card can be used as the source of value. In these examples, the consumer must travel to the bank to load value. A further inconvenience exists in that not all banks have value loading machines. To overcome this inconvenience, a method by which consumers may load value onto their smart cards via the Internet has been proposed and is described in U.S. patent application Ser. No. 09/070,488 (Davis, et al.), filed Apr. 30, 1998, and entitled “Internet Loading System Using Smart Card”, which is incorporated herein by reference.

0010One disadvantage of current smart card systems is that they are dependent on the use of two hardware components new to the mass consumer market: smart cards and smart card readers. Without having large numbers of smart cards and card readers in use, there is little demand for them from consumers, which in turn makes it difficult to convince merchants to adopt these systems.

0011A need therefore exists for an electronic commerce system that does not require the prior deployment of physical smart cards and smart card readers. Such a system would allow merchants and issuers to establish a market presence that would in turn facilitate the acceptance of physical smart cards and card readers as they become more widely available.

0012With respect to the issue of trust, for electronic commerce, trust must be established in seconds between strangers who are physically separated. Effective security is based on the unequivocal authentication of authorized parties.

0013Methods for providing authentication include digital signatures, the public key infrastructure (PKI), and electronic payment policies such as X9.59. However, the traditional digital signature model is a complex and computationally expensive process when applied to mainstream business transactions over the Internet. The traditional digital signature model was not developed specifically for today's business transactions or a secure means to conduct electronic commerce that takes into account the infrastructure and business processes already in place within the financial sector to ensure trust in financial transactions. On the other hand, the PKI model does provide strong authentication. In addition, the financial industry's X9.59 policy, is a light-weight, high integrity, strong authentication payment protocol targeted for all methods of electronic payment including, but not limited to, set-top boxes, point of sale terminals with online authorization, and merchant web servers. With the appropriate smart card, X9.59 can work at point-of-sale, even improving the integrity of the current POS infrastructure, while eliminating the necessity for any identity information in payment transactions.

0014A need therefore exists for an electronic commerce system with effective authentication suitable for today's business transactions.

0015Finally, in addition to being secure, modern electronic commerce systems must protect individual privacy without impeding legitimate inquiries by law enforcement and government agencies. Typically, to improve privacy, a modern electronic commerce system must be relatively anonymous for the user.

0016In summary, smart cards require information be recorded on them. In the case of stored-value cards, a monetary value must be downloaded to the card. In the case of a debit or credit cards, an identity must be securely transferred to the card. Hence, a need exists for an electronic commerce a system that has effective online authentication and that includes the benefits of physical smart card but that operates in a virtual environment. In addition, a need exists for an electronic commerce system that provides the benefits of card-present transactions in the context of remote networks and the internet. Furthermore, a need exists for an electronic commerce system that can reduce costs associated with current systems with respect to card distribution, reader distribution, and connectivity. Moreover, a need exists for an electronic commerce system that provides effective authentication, security, and privacy.

0017A need therefore exists for an improved electronic commerce system. Consequently, it is an object of the present invention to obviate or, mitigate at least some of the above-mentioned disadvantages.

SUMMARY OF THE INVENTION

0018The invention provides a system for conducting secure electronic commerce transactions over networks with virtual smart cards.

0019According to one aspect of the invention, a method for performing a secure electronic commerce transaction over a network using a smart card is provided. With respect to the method: the network has a client terminal, a merchant server, a payment server, and an authentication server; the smart card being a physical smart card or a virtual smart card; the smart card being associated with a user at the client terminal; the smart card having associated smart card information; the smart card information including an account balance; and, the smart card information being stored at the client terminal and at the authentication server. The method includes the steps of:

0020sending a transaction request message from the client terminal to the merchant server identifying a product for the transaction, the product having associated product information, the product information being displayed on a first web page supported by the merchant server, the user being able to view the web page at the client terminal using a browser;

0021sending transaction information from the merchant server to the client terminal in response to the transaction request message, the transaction information being contained in a second web page generated by the merchant server and displayable to the user through the browser, the transaction information including a price for the product, an IP address of the payment server; a transaction identifier, and a merchant identifier, the transaction identifier for tracking the transaction by the merchant server and by the payment server, the merchant identifier for tracking the transaction by the client terminal and the payment server;

0022receiving a user identifier and a PIN from the user at the client terminal for authorizing the transaction;

0023sending the user identifier, the PIN, and the transaction information from the client terminal to the authentication server;

0024comparing the price of the product to the account balance for the smart card at the a authentication server to determine if the transaction can proceed, the account balance being stored at the authentication server and being accessed using the user identifier and the PIN, the transaction being terminated and a first termination message being sent from the authentication server to the client terminal for display to the user if the price exceeds the account balance by a predetermined amount;

0025sending a draw request message from the authentication server to the payment server using the IP address of the payment server; the draw request message containing the transaction information;

0026sending the draw request message from the payment server to the client terminal;

0027sending a debit request message from the client terminal to the payment server in response to the draw request message, the debit request message including a first digital signature, the first digital signature for verifying that the debit request message originated from the client terminal, the first digital signature being generated at the client terminal using the smart card information stored at the client terminal;

0028sending the debit request message from the payment server to the authentication server;

0029comparing at the authentication server the first digital signature contained in the debit request message to a first check digital signature generated at the authentication server using the smart card information stored at the authentication server to determine if the transaction can proceed, the transaction being terminated and a second termination message being sent from the authentication server to the client terminal for display to the user if the first digital signature does not match the first check digital signature;

0030updating the smart card information by debiting the account balance by the price to produce an updated account balance and storing the updated account balance at the authentication server; sending a debit response message from the authentication server, to the payment server, the debit response message including a second digital signature, the second digital signature for verifying that the debit response message originated from the authentication server and for verifying that the account balance has been debited, the second digital signature being generated at the authentication server using the smart card information stored at the authentication server;

0031sending the debit response message from the payment server, to the client terminal;

0032comparing at the client terminal the second digital signature contained in the debit response message to a second check digital signature generated at the client terminal using the smart card information stored at the client terminal, the smart card information stored at the client terminal including an expected updated account balance, to determine if the transaction can proceed, the transaction being terminated and a third termination message being displayed to the user if the second digital signature does not match the second check digital signature;

0033updating the smart card information by debiting the account balance by the price to produce an updated account balance and storing the updated account balance at the client terminal;

0034sending a verification response message from the client terminal to the payment server, the verification response message including an indication that the second digital signature matches the second check digital signature and that the transaction can proceed;

0035logging the indication and the transaction information at the payment server;

0036sending a debit result message from the payment server, to the authentication server, the debit result message for confirming that the transaction has been logged and that the transaction can proceed, the debit result message including the indication and the transaction information;

0037logging the debit result message at the authentication server;

0038sending the debit result message from the authentication server to the client terminal to confirm that the transaction has been logged and that the transaction can proceed;

0039sending the debit result message from the client terminal to the merchant server, to confirm that the transaction has been logged and that the product can be released to the user; and,

0040sending a purchase receipt message from the merchant server to the client terminal, the purchase receipt message indicating that the product has been released to the user, thereby completing the secure electronic commerce transaction

0041According to another aspect of the invention, the network is the Internet.

0042According to another aspect of the invention, the debit result message is encrypted.

0043According to another aspect of the invention a transaction server is provided for performing a transaction over a network using a virtual smart card. The server includes:

0044a) a virtual smart card database having a plurality of records each record including a virtual card identification and a value corresponding to a single virtual smart card;

0045b) a security module;

0046c) an emulator for emulating a smart card, the emulator for receiving smart card commands and processing the commands in conjunction with the virtual smart card database and the security module; and

0047d) a virtual card reader module for receiving the smart card commands and relaying the commands to the smart card emulator whereby transactions are performed over the network using one or more the records and the virtual smart card database.

0048According to another, aspect of the invention, a method for performing a transaction over a network using a virtual smart card and a server is provided. The method includes the steps of:

0049a) creating a plurality of records on a virtual smart card database, each record including a virtual card identifier and a value corresponding to a single virtual smart card;

0050b) receiving smart card commands via a smart card emulator and processing the commands in conjunction with the virtual smart card database and a security module; and

0051c) receiving the smart card commands via a virtual card reader module and relaying the commands to the smart card emulator whereby transactions are performed over the network using the server and one or more of the records in the virtual smart card database.

0052According to another aspect of the invention, the server's security module includes a plurality of encryption algorithms.

0053To the accomplishment of the foregoing and related ends the invention, then, comprises the features hereinafter fully described and particularly pointed out in the claims, the following description and the annexed drawings setting forth in detail certain illustrative embodiments of the invention, these being indicative, however, of but a few of the various ways in which the principles of the invention may be employed.

BRIEF DESCRIPTION OF THE DRAWINGS

0054Embodiments of the invention may best be understood by referring to the following description and accompanying drawings. In the description and drawings, like numerals refer to like structures or processes. In the drawings:

0055<figref idref="DRAWINGS">FIG. 1</figref> is a block diagram illustrating VirtualSAFE software modules in accordance with an embodiment of the invention;

0056<figref idref="DRAWINGS">FIG. 2</figref> is a flowchart illustrating the operation of the secure remote pointer, component of VirtualSAFE in accordance with an embodiment of the invention;

0057<figref idref="DRAWINGS">FIG. 3</figref> is a flowchart illustrating the steps for user enrollment in VirtualSAFE in the general case in accordance with an embodiment of the invention;

0058<figref idref="DRAWINGS">FIG. 4</figref> is a flowchart illustrating the steps for user enrollment in VirtualSAFE in a second case in accordance with an embodiment of the invention;

0059<figref idref="DRAWINGS">FIG. 5</figref> is a flowchart illustrating the steps for user enrollment in VirtualSAFE in a third case in accordance with an embodiment of the invention;

0060<figref idref="DRAWINGS">FIG. 6</figref> is a flowchart illustrating the steps for user enrollment in VirtualSAFE in a fourth case in accordance with an embodiment of the invention;

0061<figref idref="DRAWINGS">FIG. 7</figref> is a flowchart illustrating the steps for user enrollment in VirtualSAFE in a fifth case in accordance with an embodiment of the invention;

0062<figref idref="DRAWINGS">FIG. 8</figref> is a flowchart illustrating the steps for user enrollment in VirtualSAFE in a sixth case in accordance with an embodiment of the invention;

0063<figref idref="DRAWINGS">FIG. 9</figref> is a flowchart illustrating the steps for user enrollment in VirtualSAFE in a seventh case in accordance with an embodiment of the invention;

0064<figref idref="DRAWINGS">FIG. 10</figref> is a flowchart illustrating the steps for user enrollment in VirtualSAFE in an eighth case in accordance with an embodiment of the invention;

0065<figref idref="DRAWINGS">FIG. 11</figref> is a flowchart illustrating the steps for user enrollment in VirtualSAFE in a ninth case in accordance with an embodiment of the invention;

0066<figref idref="DRAWINGS">FIG. 12</figref> is a flowchart illustrating CA process steps in VirtualSAFE in accordance with an embodiment of the invention;

0067<figref idref="DRAWINGS">FIG. 13</figref> is a block diagram illustrating participants and their contractual relationships in VirtualSAFE in accordance with an embodiment of the invention;

0068<figref idref="DRAWINGS">FIG. 14</figref> is a block diagram illustrating the enrollment process in VirtualSAFE in accordance with an embodiment of the invention;

0069<figref idref="DRAWINGS">FIG. 15</figref> is a block diagram illustrating the online transaction process in VirtualSAFE in accordance with an embodiment of the invention;

0070<figref idref="DRAWINGS">FIG. 16</figref> is a block diagram illustrating the server authentication process in VirtualSAFE in accordance with an embodiment of the invention;

0071<figref idref="DRAWINGS">FIG. 17</figref> is a block diagram illustrating the computer authentication process in VirtualSAFE in accordance with an embodiment of the invention;

0072<figref idref="DRAWINGS">FIG. 18</figref> is a block diagram illustrating the user authentication process in VirtualSAFE in accordance with an embodiment of the invention;

0073<figref idref="DRAWINGS">FIG. 19</figref> is a block diagram illustrating the back-end authentication process in VirtualSAFE in accordance with an embodiment of the invention;

0074<figref idref="DRAWINGS">FIG. 20</figref> is a block diagram illustrating the fulfillment process in VirtualSAFE in accordance with an embodiment of the invention;

0075<figref idref="DRAWINGS">FIG. 21</figref> is a block diagram illustrating the attribute authentication authority process in VirtualSAFE in accordance with an embodiment of the invention;

0076<figref idref="DRAWINGS">FIG. 22</figref> is a block diagram illustrating the virtual identity (VI) process in VirtualSAFE in accordance with an embodiment of the invention;

0077<figref idref="DRAWINGS">FIG. 23</figref> is a block diagram illustrating the virtual smart card (VSC) process in VirtualSAFE in accordance with an embodiment of the invention;

0078<figref idref="DRAWINGS">FIG. 24</figref> is a block diagram illustrating the VirtualSAFE deposit box (VSDB) process in VirtualSAFE in accordance with an embodiment of the invention;

0079<figref idref="DRAWINGS">FIG. 25</figref> is a block diagram illustrating the points-of-sale (POS) and virtual smart card (VSC) emulation process in VirtualSAFE in accordance with an embodiment of the invention;

0080<figref idref="DRAWINGS">FIG. 26</figref> is a block diagram illustrating the ATM and virtual smart card (VSC) emulation process in VirtualSAFE in accordance with an embodiment of the Invention;

0081<figref idref="DRAWINGS">FIG. 27</figref> is a block diagram illustrating the wireless POS and ATM process In VirtualSAFE in accordance with an embodiment of the invention;

0082<figref idref="DRAWINGS">FIG. 28</figref> is a block diagram illustrating the SAFEcheck process in VirtualSAFE in accordance with an embodiment of the invention;

0083<figref idref="DRAWINGS">FIG. 29</figref> is a black diagram illustrating physical access control in VirtualSAFE in accordance with an embodiment of the invention;

0084<figref idref="DRAWINGS">FIG. 30</figref> is a block diagram illustrating VirtualSAFE from a business-to-business perspective, and including an e-portal, in accordance with an embodiment of the invention; and,

0085<figref idref="DRAWINGS">FIG. 31</figref> is a block diagram illustrating VirtualSAFE from a business-to-consumer perspective, and including a merchant, in accordance with an embodiment of the invention.

DETAILED DESCRIPTION OF THE INVENTION

0086In the following description, numerous specific details are set forth to provide a thorough understanding of the invention. However, it is understood that the invention may be practiced without these specific details. In other instances, well-known software, circuits, structures and processes have not been described or shown in detail in order not to obscure the invention. In the description and drawings, like numerals refer to like structures or processes.

0087The term ‘VirtualSAFE’ is used herein to refer to a system, including software, for secure electronic commerce using virtual smart cards in accordance with an embodiment of the invention. VirtualSAFE may include machines for processing data, including the computer systems and network arrangements described herein.

0088System. VirtualSAFE is an electronic commerce system which includes a client terminal, a merchant server, a payment server, and a VirtualSAFE authentication server. The client terminal, merchant server, payment server, and VirtualSAFE authentication server are in communication over a network, typically, the Internet. Using a web browser, a user at the client terminal browses through product and service web pages presented by a merchant through the merchant server. The user may purchase products and services from the merchant using a virtual smart card. The VirtualSAFE authentication server authenticates the user through the software modules and method described below. In general, the payment server fulfills the e-commerce transaction. VirtualSAFE has stored therein data representing sequences of instructions which when executed cause the method described herein to be performed. Of course, VirtualSAFE may contain additional software and hardware a description of which is not necessary for understanding the invention.

0089Modules. Referring to <figref idref="DRAWINGS">FIG. 1</figref>, there is shown a block diagram illustrating VirtualSAFE software modules <b>100</b> in accordance with an embodiment of the invention. VirtualSAFE software modules <b>100</b> include the following: Public Key Infrastructure (PKI) <b>101</b>; Redirection U-ink (RL) <b>102</b>; Secure Remote Pointer (SRP) <b>103</b>; Attribute Authority (AA) <b>104</b>; Virtual Identity (VI) <b>105</b>; Virtual Smart Card (VSC) <b>106</b>; Secure Data Repository <b>107</b>; VirtualSAFE (or Authentication Authority) Server <b>108</b>; Crypto-Engine (CEV) <b>109</b>; Payment Processing Engine <b>110</b>; Risk Management Engine <b>111</b>; Transaction Fulfillment Mechanism (TFM) <b>112</b>; Insurance Module <b>113</b>; Secure Transaction Repository <b>114</b>; and VirtualSAFE Deposit Box (VSDB) <b>115</b>.

0090These modules are described in detail in the following beginning with the VirtualSAFE server <b>108</b> and Crypto-Engine (CEV) <b>109</b>.

0091VirtualSAFE Server <b>108</b>. Advantageously, the VirtualSAFE server <b>108</b> (or authentication server) dispenses with the need for physical smart cards and card readers. In the following, physical smart card transactions are contrasted with virtual smart card transactions as coordinated by the VirtualSAFE server <b>108</b>.

0092Physical Smart Card Transactions. Typically, local cardholder functions include a consumer card interface. Display and accept/cancel options are performed at the client terminal. Payment functions, including security card control, data storage, and the use of a concentration point, are performed by a payment server. The presentation and eventual delivery of goods and services by a merchant are performed under the control of a merchant server. The Internet performs routing functions between each entity. It should be appreciated that the Internet may include its present form or it may include any other open network implemented using a combination of computer, telephone, microwave, satellite, or cable networks.

0093The client terminal controls the interaction with a consumer and interfaces to the card reader that accepts a smart card having a stored-value application. The payment server communicates directly with a terminal or through a concentrator that handles a number of terminals each having a security card. The payment server, also communicates with the concentration point for transmission of transaction data to a clearing and settlement system. The database stores all the appropriate information passing through the payment server for each transaction. Use of such a database allows any number of merchants (or merchant servers) to use the payment server for transactions. The payment server, controls payment functions such as handling attached terminals, managing the database, and collection functions. The merchant server is typically a site that has contracted with an acquirer to accept smart card transactions as payments for goods and services purchased over the Internet.

0094As discussed above, the smart card may take a variety of forms and is useful in many situations where it is desirable to store monetary value on a card that a consumer may use. Generally speaking, the smart card is any card or similar device able to store a value and decrement that value when the card is used. The card may be purchased complete with a stored value or a given value may be added to the card later. Such cards may also have their value replenished. The smart card may also perform a variety of functions in addition to simply storing value, for example, debit, credit, prepayment and other functions. Such a card typically includes information such as a bank identifier number, a sequence number, a purchase key, a load key, an update key, an expiration date, a transaction ID, and a running balance.

0095The smart card may include an encryption module in order to provide a variety of security features. For example, security features may include simple PIN numbers, biometrics, simple algorithms, or sophisticated algorithms such as the Data Encryption Standard (DES) or Rivest Shamir Adelman (RSA) encryption. Typically, a smart card is able to use these features to verify consumers and card readers, to validate security cards, and to provide a unique digital signature. A smart card may include any number of keys which are known to the card issuer and that are used during the course of a payment or load transaction to generate digital signatures for validation of the stored-value card, security card or module, or the system itself.

0096The client terminal may be any suitable device for interacting with the card and for communicating over a network with a payment server and a merchant server. For example, the client terminal may be a mainframe computer, a workstation, a personal computer, a set top box, a kiosk, or any type of service payment terminal that a consumer might use to purchase goods and services. The client terminal may also be embodied in any portable device including a laptop computer, a cellular telephone (including GSM telephones), or a personal digital assistant (PDA). The card reader, may be any suitable interface device that is capable of transferring information and commands between the client terminal and the card.

0097Typically, the client terminal includes a “client code module” and a “card reader module”. The card reader module may be implemented using any suitable software and libraries for communicating with the card reader. Its actual implementation will depend upon the type of card reader used. The client code module controls communications between the client terminal, the card reader, the payment server, and the merchant server. The client code module may be implemented using any suitable software. For example, the client code module may be implemented using a combination of “C” code and a Java applet. The applet may be supplemented with parameters from an HTML page sent from the merchant server. The client code module is also responsible for controlling displays presented to consumers and for the interaction between the card and the card reader. This module also builds the draw request message after, receiving all of the start-up information from the card and the amount of the purchase from the merchant server.

0098Typically, the payment server includes a payment code module and a terminal interface. As with the client terminal, the payment server may be implemented using any suitable computer, for example, a personal computer. There may be one payment server for each merchant server or, a single payment server may service any number of merchant servers. There may be multiple payment servers for a single merchant. In addition, the payment server need not be remote from the merchant server but may be located at the same site and have a different Internet address. Or, the payment server and the merchant server, may be implemented on the same computer. The payment server is designed to facilitate communications between the consumer's smart card and a terminal's security card.

0099The payment module may be implemented using any suitable code. For example, the payment module may be implemented using a combination of “C” code, “C++” code, and Java code. The payment module may be a multi-threaded process that can service multiple concurrent client applet transactions on demand. The module is responsible for controlling all interactions with terminals including the transaction collection function. For individual transactions, the payment module controls message flow and logs interim results. When an applet connects with the payment server, it creates a transaction thread to support the transaction through its life cycle. Each thread, in turn, assigns a terminal for communications. A one to-one correspondence between transaction threads and terminals may provide good results.

0100Typically, the terminal interface is any suitable set of software and libraries for communications with a terminal either directly or through a terminal concentrator. The actual implementation of the terminal interface will depend upon the type of terminal used. For example, an IQ Delta 2010 terminal made by Schlumberger may be used. Such a terminal supports a variety of commands originating from the terminal interface. These commands emulate the normal responses from a smart card to a security card should both be located in the same service payment terminal. The actual security card commands are held in the terminal while the terminal performs the tasks necessary to simulate the presence of a smart card. The emulation of the card commands can be done by the payment server using the terminal as a card reader, or may even be performed by the client terminal.

0101Typically, the security card is any suitable security card such as those that are known in the art (often referred to as a Purchase Secure Application Module or PSAM). The functionality of the security card may be replaced by a crypto-engine (as is done in VirtualSAFE), may be implemented in hardware within the payment server, or may be implemented in software. For example, the security card may be a removable credit card-sized smart card that is programmed to process and store data relating to financial transactions. The security card may contain a microchip embedded in the card that enables the card to authenticate and to validate the consumers smart card. If the consumer smart card is acceptable to the security card, and if the smart card contains sufficient value, then the security card guarantees that the merchant providing goods and services will receive payment in the amount deducted from the smart card. The security card may also contains DES and public key purchase security keys, may authenticate the smart card during a purchase transaction, and may secure the payment and collection totals. A security card may also store digital signature algorithms for all smart cards in use. A security card may also contain a transaction identifier for the current transaction, a financial sum of all transactions remaining to be settled, a session key, and master keys for all smart cards in use. Further, the security card may contain generations of keys, blocked card indicators, dates of last update, multiple card programs, different currency rates, and additional security.

0102The concentration point is typically a staging computer that communicates with a payment server to collect batches of purchase transactions. The concentration point then sends these transaction batches to a clearing and settlement system for processing. Once processed, batch acknowledgments, along with other system updates, are returned.

0103Typically, the merchant server includes a merchant code module. The merchant server may be implemented on any suitable computer capable of communicating with and presenting information to consumers over the Internet. The merchant code module may be implemented using any suitable code. For example, the merchant module may be implemented using a combination of Perl, HTML, and Java code. The merchant server is typically a generic web server customized for the merchant's business. The merchant server may include databases, CGI scripts, and back-office programs that produce HTML pages for an Internet user.

0104During a financial transaction, the client terminal and the merchant server exchange information via the Internet. Each transaction initiated by a consumer has a transaction identifier created at the merchant server. A merchant identifier unique to the payment server is also available from the merchant server. The client code module and the payment server also use this unique transaction identifier for, tracking and logging information about the transaction. The merchant server generates a unique identification for the transaction, completes other required parameters, encrypts as appropriate, and builds an HTML page and sends it to the client terminal. The client code module interacts with the smart card and builds a “draw request message” containing related card information, the purchase amount, and other information supplied by the merchant server.

0105Next, the client terminal communicates with the payment server by first forwarding the draw request to the payment server. The payment server verifies the transaction to determine if it is a valid transaction from a known merchant. The transaction is logged in the payment server's transaction database. Upon completion of a transaction, the payment server builds a result message containing the identification of the transaction and signs it. The message is then routed to the merchant server via the client terminal. The merchant server then validates the result message. After determining that the transaction was successful, the merchant server creates an HTML page for the purchased information and sends it to the client terminal. The merchant may also deliver purchased goods and services to the consumer at this point. It is also possible for the payment server and the merchant server to communicate information directly between them. As the client terminal has already established communication with the merchant server and the payment server, links are used to exchange information between the payment server and the merchant server, rather than establishing a new link.

0106Virtual Smart Card Transactions. Similar to transactions with physical smart cards, the system includes the client terminal, the payment server, and the merchant server. However, the system dispenses with the need for the physical smart cards and card readers as their functionality is contained within the VirtualSAfE server <b>108</b>. In VirtualSAFE, the client code module is functionally part of the VirtualSAFE server <b>100</b> instead of being part of the client terminal. And, the functionality of the card reader module for transactions with physical smart cards is included in the client code module to allow communication with a “pseudo technology process module” (see below). Also, the user interface functionality of the client code module is transferred to a client terminal module in the client terminal. In this embodiment, a “pass through” client code module serves to “pass through” communications between the merchant server and the VirtualSAFE server <b>108</b>.

0107Again, the VirtualSAFE server <b>108</b> effectively replaces the need for physical smart cards and card readers. To achieve this, the server <b>108</b> implements a “pseudo technology process module” and smart card emulator in software. A card database stores information representing “virtual” smart cards <b>106</b> (see below) in use within the system. The card emulator interacts with the card database and a crypto-engine (CEV) <b>109</b> (see below) to effectively replace physical smart cards and card readers. Thus, the client code module may be implemented as before unaware that it is interacting with a software emulation of a smart card rather then with a physical smart card.

0108The VirtualSAFE server <b>108</b> stores the same data used with physical cards in its database and handles incoming commands from initiation or payment servers to increment or decrement a “card” balance as appropriate. Important data is stored in encrypted form and all functions that require a change to important data or the generation or, checking of digital signatures is performed by the CEV <b>109</b> (see below). The VirtualSAFE server <b>108</b> is typically located at an issuer's site. One such server may support multiple issuers provided appropriate safeguards are in place to partition data.

0109Furthermore, to support interoperability with existing financial networks, including different credit card vendors, financial institutions, and processing gateways, the VirtualSAFE server <b>108</b> may be located at an acquirers site. This configuration does not change existing transaction flows and does not require additional investment to secure the financial network.

0110In an alternative embodiment, the client terminal includes a card reader and a smart card. In this embodiment, the client terminal includes a client code module with “pass through” functionality. The system may operate in either of two modes. The system may operate without using a physical smart card by using the emulation contained within the VirtualSAFE server <b>108</b>. Concurrently, or at a later date when smart cards and readers are more common, the system may be upgraded to make use of a physical card and reader attached to the client terminal.

0111The VirtualSAFE server <b>108</b> communicates with the client terminal through a “user verification module” and with the payment server over a link. The server <b>108</b> emulates a physical smart card through the use of the pseudo technology process module, a “smart card emulator”, the crypto engine (CEV) <b>109</b>, and the database <b>105</b>, <b>106</b>, <b>107</b>, <b>114</b>, <b>115</b>.

0112The user verification module allows the VirtualSAFE server <b>108</b> to identify which user is logged on to the system and desires access to a virtual card in the database. The module provides a login procedure that requires a secret user identifier, and PIN from each user. A combination of this user identifier and PIN is then used as an index into the database to identify the record that represents the virtual smart card <b>106</b> for that user. The user verification module may also include the card identifier (digital certificate digital signature) for the user, the funding account and its expiration date, and address information for address verification during the funding portion of the initiation transaction. An address verification system may compare billing information from an authorization to that on file to assure that the real cardholder is making the transaction.

0113The pseudo technology process module is a software module that performs the functionality of a physical card reader so that the emulation of a smart card is transparent to the client code module. The card reader module accepts the actual card reader commands from the client code module and, instead of using them to drive a physical card reader, places them into a format to communicate with the smart card emulator that is emulating a smart card. Thus, an existing application programming interface (API) used by the client code module to communicate with a smart card may continue to be used. In an alter-native embodiment, the card reader module and the emulator may be collapsed into a single functional block although this may require modification of the commands issued by the client code module.

0114The smart card emulator emulates a physical smart card by accepting and passing the incoming card commands from the card reader module and determining actions to perform. In the course of performing these actions, the emulator handles the interface to the CEV <b>109</b>, fetches data from, and stores data to, the database. For example, upon receiving a command to debit a card, the emulator fetches the balance from the appropriate record in the database and transfers the encrypted balance to the CEV <b>109</b> to be decrypted and decremented. Once the new balance is encrypted by the CEV <b>109</b>, the emulator receives the new balance and stores it back in the transaction secure database.

0115Once an action has been performed, the emulator generates a simulated smart card response that is then relayed via the card reader module and the client code module to the payment server. The emulator generates card commands that appear as if they have been generated by a physical smart card, thus making emulation of the smart card transparent to the rest of the system. The emulator also updates the secure transaction database <b>114</b> at appropriate steps in the processing of a debit or an initiation.

0116In addition to debiting or initiating a virtual card in the card database, the server <b>108</b> is able to credit a virtual card if the card was debited by mistake. In other words, once a card has been debited to make a payment, the server <b>108</b> is able to recover that value and credit the virtual card in the card database, if necessary. For example, if a transaction fails and value has been taken off the card, but no value has been credited to a particular payment server, the system is able to credit the virtual card in the card database to replace the lost value. Such an operation is different from a formal initiation command in that a user's card is credited for a value that had earlier been taken off the card.

0117VirtualSAFE's databases <b>105</b>, <b>106</b>, <b>107</b>, <b>114</b>, <b>115</b> may be implemented in any suitable format and contain records for each virtual smart card in use within the system. A secure transaction repository <b>114</b> and a secure data repository <b>107</b> include the information for each virtual smart card in use and thus assists in the simulation of physical smart cards. An identifier such as a user name, PIN, or, combination thereof. Is used as an index into the database in order to identify the appropriate virtual smart card <b>106</b> for initiating, debiting, or authentication. Advantageously, the information contained in the database is typically stored in an encrypted form for security. In one embodiment, the database are implemented in Sybase.

0118Records in the database store a variety of data for, each virtual smart card <b>106</b>. This information includes initiation and purchase key identifiers, card and issuer certificates, initiation algorithms, initiation key versions, purchase algorithms, purchase key versions, a bank identification number (BIN), a VirtualSAFE Deposit Box (VSDB) <b>115</b> number, a transaction ID, a balance, a currency and exponent, an expiration date, and a maximum balance. Initiation and business public keys indicate which keys should be used. Although all keys may be stored within CEV <b>109</b>, in one embodiment, the keys are stored within the secure data repository <b>107</b> as well, with the exception of the CEV master key that is stored in the CEV <b>109</b>.

0119The secure transaction repository <b>114</b> stores information regarding transactions that occur such as a debit or an initiation and may be implemented in a similar fashion as the other databases. Also referred to as a history database, the secure transaction repository <b>114</b> includes a purchase table (i.e. log full of transactions and timestamps) and an initiation table (i.e. log full of transactions, funding request/response, and timestamps).

0120Crypto-Engine (CEV) <b>109</b>. The CEV module <b>109</b> is used to facilitate cryptographic processing. As will be described below, the CEV <b>109</b> stores secret keys and encryption algorithms, performs cryptographic functions on secret data and generates digital signatures. Typically, the CEV <b>109</b> is a tamper proof device that employs a level of physical security as means to protect the sensitive information contained therein. The CEV <b>109</b> may be suitable security module, for example, it may be similar to the security box typically attached to automatic teller machines. In another embodiment, the CEV <b>109</b> may be implemented on a smart card within a card reader, on a series of smart cards, on any suitably secure computer, or, in software.

0121In addition to other tasks, the CEV <b>109</b> performs encryption for physical smart cards. For a physical smart card, various data elements such as balance and currency are contained securely within the card. However, such data elements are not stored within the CEV <b>109</b> but are stored in the server is <b>108</b> database. Typically, important information is stored in an encrypted form in the database. The CEV <b>109</b> performs the task of receiving encrypted card data from the database via an emulator, decrypting the card data, performing required cryptographic functions on the data, and then encrypting the data and sending it back out to be stored in the financial information database <b>114</b> and secure data repository <b>107</b>. For example, if the card balance is to be reduced, the encrypted balance is sent from the database to the CEV <b>109</b> where it is decrypted, reduced, and then finally encrypted again before it is returned to the database.

0122The CEV <b>109</b> also performs cryptograph functions related to digital signatures used within the system. Digital signatures are used during the initiation operation and typically are generated by the smart card. Some digital signatures are used during an initiation or purchase operation and are generated by the issuer or the payment server. Some digital signatures are generated by the smart card on occurrence of an initiation or debit and are considered the final digital signature after the card has either, initiated value onto, or debited value from, itself. In VirtualSAFE, the CEV <b>109</b> performs these functions which are normally handled by a smart card as no physical smart card need be present with VirtualSAFE. The CEV <b>109</b> is used to generate digital signatures and verify digital signatures for an initiation operation, and is used to verify digital signatures and generate digital signatures for a purchase operation. The CEV <b>109</b> may also perform other cryptographic functions that would normally be performed by a physical smart card.

0123Initiation algorithms are identifiers that identify which cryptographic algorithm of the CEV <b>109</b> is to be used for the verification and generation of digital signatures during an initiation. The initiation key version is an identifier identifying which version of a key will be used for the generation or verification of a particular digital signature. Purchase algorithms and purchase key versions perform a similar function during a purchase.

0124A six-digit BIN in combination with the ten-digit TEP forms a sixteen-digit “identification number” that uniquely identifies a particular virtual smart card <b>106</b>. This identification number may also be referred to as a “card identifier”. Each BIN, or card range, has a single maximum balance and currency for, all of its virtual cards. The balance keeps track of the value for the particular card. Currency and exponent information provide further details concerning the balance. An expiration date provides an expiration date for the card. The maximum balance provides a maximum for the virtual card, or could also indicate a maximum balance for all virtual cards associated with a BIN.

0125Public-Key Infrastructure (PKI) <b>101</b>. VirtualSAFE is compliant with PKI standards for X.509 v1 and v3 certificates, RSA cryptography, PKCS #11 certificates, S/MIME certificates, PKIX v3 extensions, and Secure Electronic Transactions (SET). The PKI process <b>101</b> consists of multi-tiered and distinct Certificate Authorities (CA) defined as follows:

01261. An External Certification Authority (ECA) designated to issue web certificates to user client computers. Each user has an ECA key pair as follows:

0127ECA Public Key (ECApub)

0128ECA Private Key (ECApriv)

01292. An internal VirtualSAFE Certification Authority (VCA) designated to issue corresponding internal VirtualSAFE certificates for each external user web certificate. Each user has a VCA key pair as follows:

0130VGA Public Key (VCApub)

0131VCA Private Key (VCApriv)

01323. The VGA issues an encryption certificate to the VirtualSAFE Web Server (VWS) with the following key pair:

0133VSW Public Key (VSWpub)

0134VSW Private Key (VSWpriv)

0135As will be described below, VirtualSAFE has an Attribute Authority (AA) <b>104</b> designated for managing access and network permission attributes for users.

0136Redirection Link (RL) <b>102</b>. The redirection link <b>102</b> allows non-repudiation by using digital certificates and a secure algorithm and protocol residing on a remote merchant or business site. The redirection link <b>102</b> enables an online e-commerce process to access VirtualSAFE's secure transaction environment. The associated process consists of the following steps:

01371. The user completes the required conditions for executing a transaction, or request for a resource, by selecting and retrieving the appropriate access query page from a merchant server.

01382. The access query will be in the form “buy now” for a payment transaction or “access now” for a secure resource access or retrieval.

01393. The redirection link <b>102</b> will capture the relevant data from the merchant server and redirect the contents of the request to VirtualSAFE. In the case of any transaction/access any amount/session unique identifier may be transferred. In the case of a resource access request, user attributes may be transferred to Virtual SAFE.

0140The redirection link <b>102</b> allows non-repudiation by using X.509 certificates and a secure algorithm and protocol residing on a remote merchant, business, or resource site. The redirection request, once processed, initiates the Secure Remote Pointer, (SRP) <b>103</b> process for encrypting, signing, and hashing transferred data. The SRP <b>103</b> is described below. The merchant and/or, user can digitally sign the transaction.

0141Secure Remote Pointer (SRP) <b>103</b>. The SRP <b>103</b> is a composite secure algorithm and protocol residing on a remote site (i.e., VirtualSAFE, merchant, user or, any other entity) that provides encrypt/decrypt and digital signing timestamp functionality for communicating with VirtualSAFE. The SRP <b>103</b> is a VirtualSAFE compatible application that runs as a web browser plug-in, applet, or standard application. The client browser, to conduct secure communications with VirtualSAFE, uses the SRP <b>103</b>. The process is initiated when the user clicks on a redirection link (RL) <b>102</b> that requires an authentication and authorization check. Clicking on this RL <b>102</b>, as described above, implies a commitment to access a resource, for example, a payment transaction or a secure database. In order to execute a transaction, authentication of the user is required. The process requires authentication of the user computer via an X.509 Digital Certificate or other standard PKI format. Once authenticated with a digital certificate the user, application, or browser will always communicate with VirtualSAFE via the secure web browser plug-in or the SRP <b>103</b> or application. The security approach to the SRP <b>103</b> includes multi-layer security via encryption and enveloping techniques. The SRP <b>103</b> functions include encryption of data that will be packaged and then encrypted via secure sessions in addition to an SSL communication channel with the VirtualSAFE database to complete transactions and store operational data, or for other accesses purposes.

0142Referring to <figref idref="DRAWINGS">FIG. 2</figref>, there is shown a flowchart illustrating the operation of the secure remote pointer (SRP) <b>103</b> in accordance with an embodiment of the invention. In order to securely capture and store data from the customer, the following steps and requirements are incorporated in the SRP <b>103</b>:

01431. The entire communication will take place over a client-server in addition to an authenticated SSL channel. Two-way authentication is established using the digital certificate distribution method described above.

0144a) The SRP <b>103</b> will encrypt data being transmitted to VirtualSAFE prior to being placed in an electronic envelope. The envelope in turn will be transmitted over the secure session in addition to an SSL channel protocol. (Encrypted data is sent in accordance with VirtualSAFE policy through the SSL.)

0145b) The VCA Public-key, VCApub, of the user that is stored in the browser, application, message, or cookie is used to encrypt data once, creating C<b>1</b><b>201</b>.

0146c) A time stamp is concatenated to the encrypted data package C<b>1</b><b>201</b>, the ECA private key, ECApriv, belonging to the user, signs the data to create C<b>2</b><b>202</b>,

0147d) The result is encrypted with the VirtualSAFE Web Server Public-key (VSWpub) to create C<b>3</b><b>203</b>. This key can be obtained by the SRP <b>103</b> or in the case of dynamic application that will be transmitted with an ActiveX Control/Java Applet/Application, etc., at the time of page initiation.

01482. Encryption and signing of the data package is completed entirely within the secure confines of the SRP <b>103</b>. The following steps are carried out to securely communicate with VirtualSAFE.

0149a) C<b>3</b><b>203</b> is transmitted as C<b>4</b><b>204</b> overt SSL or other secured channel encrypted with the appropriate session keys

0150b) The data package C<b>4</b><b>204</b> is decrypted <b>205</b> by the reciprocal SSL, or secure channel session keys, at the VirtualSAFE Web Server, to reveal C<b>3</b><b>203</b>.

0151c) The VirtualSAFE Web Server/Application will decrypt <b>206</b> the data package with its private key VSWpriv locally on the Web Server to reveal C<b>2</b><b>202</b>. Optionally, this may be performed by a VirtualSAFE Application behind the Web Server,

0152d) The data is now ready to be used locally within VirtualSAFE.

0153e) The data package C<b>2</b><b>202</b> is passed <b>207</b> to the user's VirtualSAFE Deposit Box <b>115</b>.

01543. The data package in its new form may now be used by VirtualSAFE for various different operations including:

0155a) Authentication. Data received for authentication is treated as an encrypted quantity that does not need to be decrypted. The encrypted data is compared with a database of encrypted PINs in the Virtual SAFE.

0156b) Transaction. The VirtualSAFE private-key VCApriv of the customer is used to decrypt the transaction data received at the time of purchase. The encrypted private information of the customer in the customer repository is decrypted and hashed or encrypted, or digitally signed and sent to the payment processor, or other transaction engine. The VirtualSAFE Private-key (VCApriv) is used to decrypt the local customer credit information for the transaction. The credit information will then be passed to the payment processor or other transaction engine. The information may be optionally signed by the customer, hashed or encrypted by an administrator. The payment configuration will determine future processing and the necessary encryption or digital signing for the data.

0157Attribute Authentication Authority (AA) <b>104</b>. The AA <b>104</b> is an internal and external VirtualSAFE module that enables the assignment of authorization to users and applications to access network resources, and remote non-repudiation providing valid digital signature and verification mechanisms for new or existing financial and other information infrastructures.

0158The implementation of a remote electronic commerce application requires managing access to electronic resources. The core value of an e-commerce application lies in the ability to manage identities and the associated privileges attached to these identities. In traditional approaches to PKI, a Certification Authority (CA) issues and revokes certificates used to bind a name to a public key. However, the existing certificate structure requires an existing name space where each individual is uniquely identified with a unique name and often a unique number. In e-commerce transactions, the merchant server may be assured of the customer's identity by means of digital certificate verification. However, the authorization of the customer identity to actually perform the transaction (or other access privilege) is not necessarily a given. Advantageously, VirtualSAFE provides a means for the merchant to be certain that the actions to be undertaken are legally binding and the signer indeed has the authority to execute them.

0159In VirtualSAFE, digital certificates are enhanced by including attributes that provide or, grant a privilege to its owner. The benefit of this approach makes the attribute certificate well suited for system access control or authorization control.

0160By definition, access control entails the limiting of activities of a user on the system. Enforcement of such controls is accomplished by maintaining a reference monitor that mediates access attempts by consulting an authorization base to determine if the user attempting the access is authorized to gain access. A distinction is made here between authentication and access control; authentication confirms the identity of the user, while access control establishes identity privileges on the basis of successful authentication.

0161Access control may be deployed in one of two modes, namely, an activity-based mode or a group-based mode. In the activity-based mode, user access control is managed according to activity monitoring where each access is checked against an authorization table and permissions are granted or denied on that basis. In the group-based mode, user access control is based on the group to which a user belongs. Users of the same group are authorized to perform a specific set of system tasks or actions. Instead of specifying all the individual user authorizations, actions are assigned according to the group such that an individual user may perform the tasks assigned to the users group.

0162Group-based access control is characterized by the following:

01631. Authorizations are defined according to classes of objects or resources where a member of a group may be authorized to access a particular resource. This enables a class of resources to be accessible to a group of users without specifying individual resource access privileges.

01642. Access to specific resources are defined by the activities required by a particular group. A group is defined by its authorizations and a user may be afforded access rights according to a group designation.

01653. Groups may be nested in a hierarchical order wherein higher-class groups may inherit lower-class group authorizations.

01664. Minimum access may be granted on the basis of a minimum group characteristic. Access for lower risk resources may be afforded by assigning a lower class role.

01675. Access privileges can be specified according to Boolean constructs wherein several group authorizations may be afforded to a user to achieve a composite access portfolio.

0168A group-based model is advantageous on several levels. For example, overall administration is shifted to the group level from the individual user level.

0169A user may have several authentications including the following:

0170User authentication as described with respect to the authentication authority module <b>104</b> below. In addition, an enrolment value is exchanged between VirtualSAFE and a secure portal with a resource group. Any transaction/access session is performed by a minimum of two channels simultaneously (e.g. SSL and VPN, etc.), combining enroll value and session value digitally signed by all parties based on a digital identity group (i.e. secret, shared-secret, physical material).

0171Account/Resource digital signature authentication based a digital signature verified by a user public key attached to the account/resource.

0172The digital certificate infrastructure is well suited for this approach to access control. In the standard digital certificate, a public key is signed by a Certification Authority (CA) and distributed for authentication purposes. The same principle is applied to group-based access control. In this method, a group is described by a set of attributes that enable the members of the group to perform a common functions. The attributes are bound together by a digital signature by a CA, creating an Attribute Certificate (AC), which is consequently unalterable until a new set of attributes is designated and signed. The Attribute Certificate may contain the following fields:

0173Version: Designates format of the AC currently in use.

0174Subject: Context of the AC usage in terms of the given application.

0175Issuer: Issuer of the certified AC.

0176Digital signature: Digital signature of the AC data by the Issuer.

0177Issuer Unique ID

0178Serial Number; A unique identifier of the AC.

0179Expiry: Defines the validity period of the AC.

0180Attributes: Access control definitions for the AC.

0181The attribute authentication authority (AA) <b>104</b> is advantageous for authentication and authorization of business processes. Typically, existing business processes use some means of account-based protocol to evaluate attributes. However, these methods are reliant on knowledge factor authentication where the user divulges a previously agreed secret. That is, typical business processes supporting authentication are primarily “shared-secret” based (e.g. PINs, mother's maiden name, SIN#, SSN#, etc.). The “shared-secret” has the disadvantage that the shared secret can both originate as well as authenticate a transaction (i.e. existing business infrastructures need extra levels of security to prevent divulging the shared secret). Upgrading these existing authentication business infrastructures to PKI is straightforward and eliminates the vulnerability associated with divulging the authenticating value.

0182Advantageously, VirtualSAFE Includes a straightforward upgrade to existing “shared-secret” authentication processes to a “secret”, “shared-secret”, and “physical material” authentication process using existing business processes. By including an Attribute Certificate in a transaction, the authentication of the user is enhanced Consider the following access control system, which is in accordance with an embodiment of the invention:

01831. A Trusted-Third Party Certification Authority CA(x)

01842. An Authentication Authority AA(y)

01853. Organization Resource R(<b>1</b>), R(<b>2</b>), R(<b>3</b>), R(<b>4</b>), . . . R(n)

01864. Groups described by attributes G(<b>1</b>), G(<b>2</b>), . . . G(n)

01875. Users designated as U(<b>1</b>), U(<b>2</b>), . . . U(n)

0188The Certification Authority CA(x) is capable of issuing public key certificates and of signing the root issuing certificate of the Authentication Authority AA(y), Resources are classed and labeled such that access to resource R(<b>1</b>) is distinct and non-connected with R(<b>2</b>), or any other resource R(n). Each group G(n) is assigned authorization to access a particular set of resources based on policy, for example, G(<b>1</b>) may access R(<b>1</b>), R(<b>3</b>), and R(<b>4</b>).

0189In this embodiment, a method by which an authorization environment for resource access is made instantaneous, may include the following steps:

01901. The root certificate CA(x) is distributed to all users U(n) and resources R(n).

01912. The root certificate AA(y) is also made publicly available.

01923. Authentication Authority AA(y) is able to issue ACs to all users U(n) in G(n).

0193To exercise a resource access authorization, the following steps may now be followed:

01941. An access request to resource R(<b>1</b>) is made by a user member U(<b>1</b>) of group G(<b>1</b>), where G(<b>1</b>) is granted access to R(<b>1</b>), R(<b>2</b>), and R(<b>4</b>), and is digitally signed by the user.

01952. Resource R(<b>1</b>) verifies the digital signature of U(<b>1</b>) with U(<b>1</b>)'s public-key certificate.

01963. Resource R(<b>1</b>) checks the validity of U(<b>1</b>)'s certificate by verifying the digital signature with CA(x)'s root certificate.

01974. The AC of U(<b>1</b>) is verified using AA(y)'s root certificate.

01985. The attributes in U(<b>1</b>)'s certificate are then used to grant access, according to the group membership of U(<b>1</b>), to G(<b>1</b>) which includes R(<b>1</b>) access:

0199Given the successful verification of these queries on U(1)'s AC, then the result will be either to deny access or to grant access on the basis of identity authentication and appropriate access authorization.

0200Virtual Identity (VI) <b>105</b>. The VI module <b>105</b> is a composite secure algorithm and protocol for creating a digital certificate based virtual identity based on the above described secret, shared-secret, and physical material process. VI <b>105</b> includes the use of X.509 Digital Certificates in the internal VirtualSAFE Certification Authority (VCA), as described above. VI <b>105</b> also includes the following:

02011. The Web certificate from a third party or ECA public and private key of the user:

0202Public Key (SCApub)

0203Private Key (ECApriv)

02042. The VirtualSAFE CA public and private key of the user:

0205VCA Public Key (VCApub)

0206VCA Private Key (VCApriv)

02073. The private data of the user is encrypted with the users public key (VCApub) and committed to the local database.

02084. The user's private key (VCApriv) is stored securely elsewhere in Virtual SAFE.

02095. VirtualSAFE then executes a retrieval of the information in the Virtual Identity <b>105</b> by employing a composite secure algorithm and protocol described below in conjunction with the Virtual Smart Card module <b>106</b>. The retrieval and storage of the secure data is performed on the basis of a secret, shared-secret, and physical material process.

02106. The user data stored in the Virtual Identity <b>105</b> may include the following:

0211Encrypted PIN and other access data

0212AA Reference Data

0213Personal User Data

0214Financial User Data

0215Virtual Smart Card (VSC) <b>106</b>. The Virtual Smart Card module <b>106</b> enables authentication and secure, isolated encrypt/decrypt and digital verification functionality. Remote or roaming VirtualSAFE digital certificate storage is an important part of this configuration. The VSC module <b>106</b> is an internal VirtualSAFE application that acts as a local secure proxy to an external virtual authentication token accessed via the Secure Remote Pointer (SRP) <b>103</b>. The VSC <b>106</b> authenticates, encrypts and decrypts VirtualSAFE user data using a multi-tiered Public Key Infrastructure (PKI) <b>101</b> managed service. The VSC <b>106</b> implements a multi-tiered PKI by designating a dual set of key pairs for each user. As described above, the first set is an External Public-Private key pair, issued by the External Certification Authority (ECA), which resides on the client or web browser and interoperates with the SRP <b>103</b>. The second set is a local VirtualSAFE Public-Private key pair issued by the VirtualSAFE Certification Authority (VCA) that resides securely and inaccessibly to the outside network within VirtualSAFE. The Virtual Smart Card (VSC) <b>106</b> is part of VirtualSAFE's secure backend Virtual Identity <b>105</b> management system. As described above, a system in which VirtualSAFE is deployed typically includes the following:

02161. Client Terminal. The client terminal typically includes a personal computer with network interface communication capability, and a World Wide Web browser application. The client terminal runs the Secure Remote Pointer <b>103</b> that makes a secure connection with the merchant server.

02172. Merchant Server. The merchant server (i.e. WWW server) is configured to serve web pages. The merchant server can serve pages related to an e-commerce shopping-cart application or it can serve pages relating to the access of controlled resources (e.g. documents, applications, etc.).

02183. VirtualSAFE server <b>108</b>. The VirtualSAFE server <b>108</b> includes the VSC process <b>106</b> and the requisite VirtualSAFE Deposit Box <b>115</b> (see below) containing Virtual Identities <b>105</b>

02194. Payment Server. The payment server (i.e. fulfillment resource) is in communication with VirtualSAFE and may include of any valuable or, sensitive services or systems, including but not limited to payment servers, secure data repositories, or other information.

0220The method by which the VSC <b>106</b> is accessed by the remote client terminal and by which it executes an online interaction is as follows:

02211. A communication channel is opened between the client terminal and the merchant server. The client terminal is presented with content from the merchant server. The user browses this content for, items and makes an access decision. In the case of an e-commerce application, this is equivalent to browsing an electronic shopping cart application and composing a list of items for a purchase decision.

02222. Upon making an access decision, a signal to actuate a resource access process on behalf of the user is transmitted when the customer, clicks the Redirection Link <b>102</b> on the merchant servers resource decision web page:

02233. The merchant server communicates the requirement to execute the resource access process to the VirtualSAFE server over a secure channel whereby authentication is initiated between the client terminal and VirtualSAFE.

02244. VirtualSAFE initiates Virtual Smart Card (VSC) <b>106</b> authentication by immediately downloading the Secure Remote Pointer (SRP) <b>103</b> to the client terminal.

02255. The SRP <b>103</b> requires PIN and PIN authentication from the user.

0226The VSC module <b>106</b> includes a multi-tiered authentication mechanism that consists of the elements described above with respect to PKI <b>101</b>, that is, the ECA, VCA, and AA.

0227The VSC <b>106</b> may be initiated through the following method:

02281. A User VCA Public-Private key pair is generated by VirtualSAFE and stored as follows:

0229a) The VCA public key (VCApub) is combined with the Certificate Digital Signature from the External Public Key Certificate, ECA, and used as a unique identifier or footprint.

0230b) This combined unique identifier, and digital certificate data is stored in an online application, browser cookie, or, dynamic header, of a web page, and automatically downloaded to the client terminal or web browser

0231c) The unique identifier and digital certificate data is also stored with the user's Virtual Identity (VI) <b>105</b> in the user database. As the database's user information is entirely encrypted, the unique identifier and digital certificate data, as described, is used as a search index in order to retrieve encrypted information about a particular user.

0232d) Every query communicated to the VSC <b>106</b> from the SRP <b>103</b> contains the user's unique identifier and digital certificate data for, identification purposes. Note that the data from the SRP <b>103</b> is signed and encrypted to help prevent fraud.

02332. All the user data stored in the VirtualSAFE database is encrypted with the individual user's VirtualSAFE private key (VCApriv). Any key that is external to VirtualSAFE cannot decrypt the local data, for example, the ECApriv key. The VGApriv key is stored securely in VirtualSAFE, apart from the VSDB <b>115</b>.

02343. When a query is made via the Secure Remote Pointer (SRP) <b>103</b> it can arrive in either of the following two forms (as described above with respect to the SRP module <b>103</b>):

0235a) Authentication. The SRP <b>103</b> query composed of a data package C<b>1</b> is decrypted <b>208</b> (see <figref idref="DRAWINGS">FIG. 2</figref>) and verified for use by VirtualSAFE as described above

0236I. In this case the data contained in the data package is the user footprint and the verified but still encrypted (with VCApub) Personal Identification Number (PIN) from the remote client a terminal.

0237II. The user footprint is used to locate the VirtualSAFE database Virtual Identity <b>105</b> of the particular user.

0238III. Upon retrieval of the VI <b>105</b> of the particular user, the encrypted PIN from the SRP <b>103</b> is compared to the PIN in the VI <b>105</b> record.

0239IV. If the encrypted data fields match, then an authentication is affirmed, and authorizations associated with this VI <b>105</b> are requested from the AA <b>104</b>.

0240V. The remaining authorizations are queried and verified as described above with respect to the Authentication Authority <b>104</b>.

0241b) Transaction. The SRP <b>103</b> query composed of a data package C<b>1</b> is decrypted and verified for use by the VirtualSAFE as described above

0242I. In this case, the data contained in the data package is the user footprint and the verified but still encrypted (with VCApub) resource access query C<b>1</b> from the remote client terminal.

0243II. The user, footprint is used to locate the VirtualSAFE VSC <b>106</b> and Virtual Identity <b>105</b> for the particular user.

0244III. Upon retrieval of the VI <b>105</b> for the particular user, the encrypted resource access query in C<b>1</b> from the SRP <b>103</b> is decrypted <b>209</b> (see <figref idref="DRAWINGS">FIG. 2</figref>) with VCApriv that reveals message M.

0245IV. The message M contains formatted instructions for VirtualSAFE to perform some transaction or resource access.

0246V. In order to carry out the transaction or resource access the local VI <b>105</b> data must be decrypted with VCAprlv. Upon decryption of user data, the transaction must be authorized by the AA <b>104</b>.

0247VI. The transaction authorization is queried and verified as described above with respect to the authentication authority module <b>104</b>.

0248VII. The transaction or resource access is executed.

0249VIII. The decrypted VI <b>105</b> data is destroyed, and the existing user VI <b>105</b> record remains encrypted in the VirtualSAFE Deposit Box <b>115</b>.

0250IX. Results of the transaction or resource access are returned to VirtualSAFE and the VI <b>105</b> record is updated and encrypted/hashed.

0251X. A confirmation of the transaction or resource access is communicated to the client terminal via the SRP <b>103</b> and merchant through a dedicated channel or another form of messaging.

0252The Virtual Smart Card (VSC) <b>106</b> process may be used in the context of a Point-of-Sale (POS) card-swipe terminal at a merchants store or shop, as follows. Assume that the customer maintains an account with an existing financial institution. The following steps may be included in the use of the VSC <b>106</b>:

02531. The merchant swipes the magnetic stripe customer debit or credit card at the POS terminal.

02542. The POS terminal transmits a request for authorization through the financial network. A connection is made to an intermediate smart card reader at the merchant's store or shop.

02553. The smart card reader includes the merchants smart card.

02564. The transaction authorization request from the POS terminal prompts the smart card reader to encrypt and sign the data prior to transmission.

02575. VirtualSAFE requires a PIN identification to authenticate the customer.

02586. VirtualSAFE performs an authentication of the customer using the Virtual Smart Card process <b>106</b> (as described above).

02597. The customer is authenticated

02608. VirtualSAFE sends an encrypted or digitally hashed and signed transaction request to the financial institution or to an Interac switch.

02619. An authorization message is returned to VirtualSAFE or to the merchant

026210. The authorization message is decrypted by the smart card reader.

026311. The authorization message is returned to the POS terminal.

0264The Virtual Smart Card (VSC) <b>106</b> process may also be used in the context of check processing, as follows. Assume that the customer is already enrolled in VirtualSAFE. The following steps may be included in the use of the VSC <b>106</b>:

02651. The customer requests a payment be made to a merchant using a VirtualSAFE check by clicking the appropriate Redirection Link (RL) <b>102</b> on the merchant's web site.

02662. The customer is forwarded to VirualSAFE.

02673. VirtualSAFE performs a remote authentication of the user and passes the customer to their VSC <b>106</b>.

02684. The customer approves a check payment from their, personal financial credit portfolio.

02695. VirtualSAFE signs the data request and sends it to the financial institution.

02706. An optional printout of the check is generated inside the physically secure facilities of the financial institution.

02717. VirtualSAFE receives confirmation of check status (e.g. processed, returned, NSF, etc.).

02728. VirtualSAFE encrypts and stores the transaction data in the customer's Virtual Identity <b>105</b>.

02739. An optional message or printout of the transaction is forwarded to the customer or merchant.

0274Secure Data Repository <b>107</b>. The secure data repository <b>107</b> is an internal VirtualSAFE module that enables secure storage of dynamic and/or static application data, using a unique PKI based encryption scheme <b>101</b> and different crypto-engine security <b>109</b>, in the same database. Existing standards and business practices allow VirtualSAFE to maintain an internal secure data a repository of certificates in optimized format as long as the original certificate format can be exactly reproduced bit-for-bit. These optimizations are implementation dependent for specific operations and may contain a combination of data compression and/or, field elimination,

0275VirutalSAFE includes the following Database Repositories (DR):

02761. VSC/Customer Database. This DR is controlled by VirtualSAFE and contains customer Virtual Identities (VI) <b>105</b>.

02772. VSC/Merchant Repository. This DR is controlled by VirtualSAFE and interfaces with a designated payment server (or, other fulfillment resource).

0278The VSC/Customer and Merchant Repositories are interlinked based on the business rules and policies defined in accordance with business requirements. The VSC/Customer Repository is a composite of customers' VI <b>105</b> records. These records include all personal, financial, and credit data belonging to each customer.

0279VSC/Merchant Repository is based on a fixed schema developed for payment and contains merchant data profiles. The VSC/Merchant Repository also contains payment transactions in various states of completion with a credit payment processor. These states may include the following:

0280Validated

0281Failed

0282Settled

0283These states may be managed, voided, cancelled, etc., and queries, such as retrieving transaction history, return various responses including transaction content which may include the following:

0284Payment Server Transaction ID

0285Credit Card Number

0286Expiry Date

0287Amount

0288Transaction Date

0289Transaction Status

0290External financial systems are securely interfaced with VirtualSAFE in that transaction communications are digitally encrypted and signed.

0291Payment Processing Engine <b>110</b>. The payment processing engine <b>110</b> enables the processing of financial transactions with remote payment providers. The payment processing engine <b>110</b> may include a server and connectivity to a payment gateway that supports wherein the servers support VirtualSAFE's compatible client-server SSL authentication. Payment processing may include the following: credit card payment, debit card payment, direct debit, check processing, wire, and EFT. Payments in VirtualSAFE may be processed in several modes including batch processing and real-time processing. Each mode achieves the same set of possible results from a payment request, whether it is authorized, settled, or declined. Real-time processing is achieved by executing a single payment request in real-time while the customer is connected. VirtualSAFE's payment processing engine <b>110</b> may support several transactions including the following:

0292Credit Card Authorization

0293Address Verification

0294Payment Submission

0295Payment Settlement

0296Transaction Void

0297Transaction Credit

0298Draw Request Messages. In the follow, a detailed description of one method for processing a draw request message in conjunction with a virtual smart card is presented. Recall that draw request messages were introduced in the description of the VirtualSAFE sever <b>108</b> above.

0299Once a draw request message has been received by the payment server and passed along its terminal, the terminal parses the message back into individual responses and passes these responses sequentially to the virtual smart card. In an alternative embodiment, a dumb terminal is used and the draw request is parsed into its components and otherwise processed by the payment server, which then sends the responses to the virtual smart card itself.

0300The payment code module of the payment server edits the draw request for syntactic correctness and logs the draw request message as being received. The draw request is passed to the terminal interface of the payment server. In one embodiment, the terminal interface then requests a terminal from the payment server's terminal pool. The payment server may have a pool of terminals connected to a terminal concentrator that is established at start-up. At start-up, the payment server receives a list of all valid terminal identifiers. The payment server uses these identifiers and its knowledge of transactions in progress to determine an appropriate terminal to process the transaction. Once a terminal is determined, the terminal interface builds a terminal specific message based upon the draw request and the type of terminal.

0301The terminal specific draw request is sent to the chosen terminal over a local area network. A concentrator may act as a router between a transaction thread in the payment server, and a corresponding terminal if many terminals are attached to the payment server. The concentrator looks at a header on the draw request to determine to which terminal the transaction should be routed. In one embodiment of the invention, the concentrator is not necessary and the payment server communicates directly with the terminal.

0302The terminal parses the draw request message into its various components and processes each component in turn to emulate a card interacting with the virtual smart card in a physical terminal. Prepackaging of a variety of data into the draw request message results in fewer, exchanges over the Internet between the VirtualSAFE server <b>108</b> and the payment server. By simulating an interaction, the virtual smart card behaves as if it were in a physical terminal along with an actual smart card. A variety of responses from a smart card may be emulated. In one embodiment, the terminal sends each of the two commands “Answer to Reset” and “Initialize IE-W for Purchase” down to the virtual smart card individually and waits for a return message, “Debit IE-W,” before sending the next response. For a public key transaction, the certificates read by the client are also included as individual responses. In this way, even though all of the smart card information (the draw request) originating from the VirtualSAFE server <b>108</b> has been sent at once in prepackaged form over the Internet, the interaction between the smart card and virtual smart card in a physical terminal is simulated at the terminal in a remote location.

0303The terminal reaches a “draw amount” state, indicating that the virtual smart card is able to generate a debit command. The virtual smart card generates its virtual smart card digital signature and the command “Debit IE-W”. The digital signature and debit commands are sent to the terminal. The debit command issued by the virtual smart card may contain a wide variety of information including the virtual smart card identifier, the transaction identifier, the amount to be debited, the currency and currency exponent for the amount, the virtual smart card digital signature, the date, time, and location. The terminal in turn sends the digital signature, command, and the terminal identifier to the payment server.

0304Risk Management Engine <b>111</b>. The risk management engine <b>111</b> is determines transaction validity using detailed heuristic processes.

0305Certificate authority digital signatures are not only expensive to manage and computationally burdensome, but they place the issuer, typically a bank, in a risky position. In a Certification Authority Digital Signature (CADS) model, the compromise of a Certification Authority's (CA) private key can be catastrophic. For example, bogus certificates may be issued and fraudulent transactions initiated, all seemingly authorized by the CA. To remedy such a problem, the CA may have to re-issue certificates to every certificate holder and put every previously issued certificate on a CRL. While a breach is undetected, the CA is in a very risky position. Consequently, Certification Authorities guard their private keys with expensive physical and procedural security measures.

0306The Account Authority Digital Signatures (AADS) model, on the other hand, carries no systemic risk. Without digital certificates, there is no technical need for a bank to have a private key. Most likely, any bank involved in PKI transactions will likely have a private key, but no certificates (or hierarchy of certificates) are inherently dependent on the security of that key in the AADS model. As attractive as AADS may sound, it will never eliminate the need for digital certificates. In cases where two parties have no prior relationship, third-party certification makes sense. For example, consider a retail customer wanting to open a new account with a bank over the internet. The concept of a third-party certificate would aid the bank tremendously in making quick work of the electronic sign-up process. This resembles the role that credit bureaus play today.

0307Third-party digital certificates will exist. Account authority digital signatures do not preclude the use of CADS. They rely on the same cryptographic operations to validate digital signatures. The latter simply requires additional steps in the validation process. An account authority can easily become a certification authority by applying its digital signature to a customers public key rather than storing the public key in the account record. If an account authority wants to support trust propagation by issuing certificates, it should, but it should do so based on a conscious business decision. By requiring certificate authority digital signatures, as most existing methodologies do, banks are thrust into the position of propagating trust via digital certificates. It is no longer a business decision but a technical requirement. Banks may not want to take on the risk of trust propagation. As account authorities they don't have to, and they can still remain central to the transaction processing business.

0308VirtualSAFE's risk management engine <b>111</b> augments the payment processing functionality by providing intermediate vetting of transactions prior to execution by a remote processor. Credit Risk Management occurs in different scenarios of customer enrolment, management and payment processing. An individual customer's credit rating is used to determine acceptability of payment transaction processing. This value is collected either at enrolment time or during a profile update. It is retrieved by calling the local database using various information fields belonging to the customer. The risk value returned is stored in the VSDB <b>115</b>. At transaction processing time, the credit value rating is retrieved from the VSDB <b>115</b> and used to evaluate whether a transaction should be transmitted to the payment processor. VirtualSAFE maintains ongoing transaction logs or a system transaction journal. That is, any transaction (e.g. payment, customer profile modification, etc) executed using VirtualSAFE is stored along with the information identifying the transaction, issuer, date, resources affected, and Registered Resource Site status.

0309Transaction Fulfillment Mechanism (TFM) <b>112</b>. The transaction fulfillment mechanism <b>112</b> is completes e-commerce transactions by means of a secure connection with fulfillment providers. The TFM <b>112</b> includes a set of fraud management heuristics that are invoked in a progression that leads to a final fulfillment condition. The fulfillment condition will dictate what type of delivery is to be made and the associated criteria for completion. The TFM <b>112</b> and fraud management heuristic is comprised of several steps including the following:

03101. Customer Authentication Scoring

03112. Credential Identification Scoring

03123. Transaction Risk Scoring

03134. Fulfillment Response

03145. Fulfillment Delivery

0315The first three of these steps are combined to achieve a transaction score that is used to a determine the fulfillment response and type of fulfillment delivery. Each step is mutually exclusive with the combined result determining fulfillment completion. The above steps may be described in more detail as follows:

0316Customer Authentication Scoring. This step is initiated by compiling the browser logon criteria into a composite score. Elements from the browser logon that may be considered include the following:

0317Certificate Authentication

0318Secure Cookies

0319PIN or PIN value

0320SRP Verifications

0321Other

0322Credential Identification Scoring. This step creates a composite score based on the identifying elements in the order information. Each are weighted and summed based on various criteria which may include the following:

0323Address

0324Amount

0325Over Limit

0326Declined

0327Plug-in Verifications

0328Risk Assessment

0329Transaction type

0330Payment type

0331Fraud

0332Third party assessment proof or change

0333Transaction Scoring This step involves computing a value and risk for the actual transaction being processed based on transaction attributes as follows:

0334External: Third Party Fraud Assessment that is used for clarification of internal scoring and adjusts final conclusion and instruction for fulfillment execution.

0335Internal: Primary Attribute, Secondary Attribute, Reduction, Tune Up, Risk Adjustment, and Fraud Data Configuration.

0336Fulfillment Response. This is the required response to the established criteria. The transaction will be treated as a variant of “card present”, where the physical credit card is actually present, or “authorization”, where the credit issuer must confirm available credit

0337Card Present V

0338Card Present R

0339Authorization

0340Fulfillment Delivery. This is the resulting action taken on the composite score after all of the scoring attributes are evaluated and checked. The resulting delivery may include the following:

0341Request for signature

0342Drop off

0343Delivery

0344Signature

0345Photo ID

0346Insurance Module <b>113</b>. Through the insurance module <b>113</b>, VirutalSAFE provides liability and transaction value insurance. A transaction value insurance algorithm is an active link to the Risk Management Engine. The adjustable architecture of this module provides a full and flexible policy for cumulative, minimum, and contractual coverage related to policy and deductions,

0347Secure Transaction Repository <b>114</b>. The transaction secure repository <b>114</b> records and securely stores every single transaction that is made by the user.

0348VirtualSAFE Deposit Box (VSDB) <b>115</b>. Through VirtualSAFE's implementation of an authentication authority server <b>108</b>, multiple entities (see below) may inter operate on an open and non-trusted network by means of AC access control. VirtualSAFE permits electronic payment, credit collection, and secure remote fulfillment processes. Through the use of the Virtual Smart Card <b>106</b>, Secure Remote Pointer <b>103</b>, Attribute Authority <b>104</b>, and other modules, VirtualSAFE may be implemented in a variety of ways, Modularity of security objects and application objects enable VirtualSAFE to be applied to numerous electronic commerce environments. In VirtualSAFE, an electronic inter-networking payment system provides for transactions using an electronic payment VSDB <b>115</b> for keeping money, credit cards, and other forms of payment organized. Access to the instruments in the VSDB <b>115</b> is restricted by encryption and authentication to avoid unauthorized payments. A successful cryptographic authentication is required in order to obtain access to the VSDB <b>115</b>. The authentication protocol obtains the information necessary for creating a network session granting authority to use an instrument, a payment holder, and a complete electronic wallet. Electronic approval results in the generation of an electronic transaction to complete the order.

0349Operation. Referring to <figref idref="DRAWINGS">FIG. 30</figref>, there is shown a block diagram illustrating VirtualSAFE from a business-to-business perspective, and including an e-portal, in accordance with an embodiment of the invention Referring to <figref idref="DRAWINGS">FIG. 31</figref>, there is shown a block diagram illustrating the VirtualSAFE system from a business-to-consumer perspective, and including a merchant, in accordance with an embodiment of the invention. VirtualSAFE ensures security through a combination of public key certificates and attribute certificates which are deployed for authentication and authorization purposes for each entity in the typical e-commerce transaction. The following entities are typically involved in an electronic commerce (e-commerce) transaction: Customer (or User); Merchant/Business; Shipper; Payment Processor; Credit Issuer/Credit Acquirer/Credit Card Vendor; and Bank Account. In order to maintain a strong connection between security and business process, security objectives and business requirements are defined and merged in VirtualSAFE. The security objectives are based on fundamental principles of confidentiality, entity authentication, data integrity, and non-repudiation. In general, VirtualSAFE provides the following features and advantages to e-commerce entities:

03501. Customer (or User).

0351Customers may affect confidential purchases from merchants.

0352Only customers may access their purchase data.

03532. Merchant/Business

0354Merchants have access to the following information: purchase related data submitted by customers; shipping related data (e.g. personal contact information); and, relevant payment information.

03553. Payment Processor.

0356The Payment Processor require only payment processing credit information.

03574. Credit Issuer/Credit Acquirer/Credit Card Vendor.

0358The Credit Issuer requires all of the above information.

03595. Bank Account.

0360The Bank requires only confirmation of the payment transaction.

0361In operation, an electronic commerce system in accordance with an embodiment of the invention includes a client terminal, a merchant server, a payment server, and a VirtualSAFE server <b>108</b>. A virtual smart card inside the terminal is in communication with the payment server and other modules supported by a multi-tiered authentication authority. A method for conducting an electronic commerce transaction over the Internet using this electronic commerce system may be described as follows:

0362Initially, a suitable web browser initiated on the client terminal is used to access a merchant server, web site. The user selects goods and/or services from the merchant site and indicates to the site that the he or, she wishes to purchase these items using a virtual smart card.

0363The merchant server receives this request for a virtual card transaction.

0364The merchant server builds an HTML page that includes several parameters. These parameters include the total cost of the transaction as determined by the merchant server, the type of currency being used, the port and IP address of the payment server, and a unique transaction identifier used by both the payment server, and the merchant server to track a transaction. Also included is a unique merchant identifier assigned to the merchant by the acquirer and known to the payment server. Other information may also be included such as the currency's exponent, a status a URL address of the merchant server used for communication from the client terminal, and a merchant server generated key and other security information to ensure the identity of the merchant server and the integrity of the message. Other process related information such as software release level, encryption methodology, and keys may also be conveyed. Once this page has been built, the page is sent to the requesting client browser and triggers the initiation of a client terminal module in the client terminal.

0365Some browsers may not allow an applet to invoke a dynamic link library (“DLL”) due to security reasons. As such, in one embodiment of the invention, the client terminal applet, along with any DLLs needed, are pre-initiated on the client terminal. Then, the merchant server, is allowed to invoke the client terminal applet and DLLs dynamically to circumvent this security precaution. In an alternative embodiment, the client applet is signed to ensure its authenticity and integrity.

0366The client terminal module then displays a screen containing the amount provided by the merchant and requests that the user authorize the amount by entering their user identifier, (which preferably is masked on screen) and PIN. Once entered, the client terminal module routes the purchase request (including purchase parameters from the merchant server, user identifier and PIN) to the VirtualSAFE server <b>108</b>. The VirtualSAFE server <b>108</b> then validates the user identifier and PIN with the user verification module.

0367The client code module of the VirtualSAFE server <b>108</b> then interacts with the pseudo technology process module to build a draw request message for later transmission to the payment server. It should be noted that at this point two types of emulation occur. The VirtualSAFE server <b>108</b> neither includes a physical smart card nor a virtual smart card. The physical card is represented as a virtual card in a record of the card database, while the virtual smart card is attached to a remote payment server. Thus, the client code module will emulate commands that a virtual smart card would issue to build the draw request, while the pseudo technology process module, the smart card emulator and the database emulate a physical smart card.

0368In one embodiment of the invention, the client code module initiates a local DLL, makes an API call to that library, which in turn makes a call to another DLL that finally makes a call to the pseudo technology process. An “Initiate VSDB for Purchase” command (Initiate VSDB) is created and forwarded to the emulator via the card reader module. This command is modified in a suitable fashion to identify which record in the database will be debited (i.e. which virtual card). For example, the user identifier or PIN may be included. Next, the emulator parses the incoming command and does a database fetch to obtain the virtual card record from the database. In another embodiment of the invention, the fetch may be optimized to only retrieve certain information. The emulator then sends the record to the CEV <b>109</b> for decryption of the card data found in the record.

0369Once responses to the “Initiate IE-W” (i.e., Intersector Electronic-Wallet) command from the reader are received, the client module combines these responses into a byte stream suitable for transmission over a network to a payment server. Also at this point the currency type and expiration date of the virtual card in the database are checked, and the total cost of the ordered merchandise is checked against the card balance to ensure that the value on the card is great enough to cover the transaction. If the checks are not successful, a message to that effect is delivered to the user and the transaction terminates.

0370Since the virtual smart card is remotely located, it would not be advantageous to engage in numerous commands and responses between the virtual smart card and the client code module over an open network such as the Internet. In the interests of speed and reliability, it is advantageous to have fewer messages exchanged. Accordingly, the client module emulates a variety of virtual smart card commands in order to receive responses to these commands from the pseudo technology process. To operate securely and reliably in this environment, in one embodiment of the present invention, the client module emulates a virtual smart card and gathers all the responses for transmission in one draw request message. The commands and responses take place between the client code module and the pseudo technology process as if there were an actual card reader with a physical smart card inside. In other words, the client code module need not be aware that a virtual card is being used. The draw request message may include a variety of data including a draw request token, state information, the merchant identifier, the transaction identifier; security information, a wallet provider identifier, and an intersector electronic wallet (“IE-W”) identifier. Also the message may include an algorithm used by the card, an expiry date, the balance of the card, a currency code, a currency exponent, the authentication mode of the IE-W, the transaction number of the IE-W, a key version, and the purchase amount. As all of this information is prepackaged into a single draw request message, the number, of messages over the Internet between the VirtualSAFE server <b>108</b> and the payment server is greatly reduced.

0371In one embodiment, the draw request message is built by packaging the virtual card's response to the “Reset” and “Initiate IE-W for Purchase” commands, any public key certificates, the total cost, and the currency of the transaction received from the HTML page. For public key cards, the card and the issuer certificates are obtained from read commands and may also be included in the draw request. By packaging all of this information together into one draw request message, it is possible to cut down on the number of messages exchanged between the VirtualSAFE server <b>108</b> and the payment server and hence reliability and speed are improved.

0372Next, the VirtualSAFE server <b>108</b> accesses the payment server using the IP address received from the merchant server. The VirtualSAFE server <b>108</b> sends the draw request message to the payment server. The VirtualSAFE server <b>108</b> also creates a log of the message being sent.

0373The payment server sends to the client terminal the draw request and processes the draw request in conjunction with an associated virtual smart card. In one embodiment of the invention, the payment server creates a transaction thread for each connected client module to service it through the life cycle of the transaction. The payment server receives a debit command and a virtual smart card digital signature from the virtual smart card.

0374The virtual smart card digital signature is a value that uniquely identifies and validates the virtual smart card to prove to the VirtualSAFE server <b>108</b> that the incoming debit command is a valid command from a real virtual smart card. This validation ensures that when the virtual card is debited the financial totals in the virtual smart card are updated. Thus, the user of the virtual card is guaranteed that a valid debit of the card has occurred. In one embodiment of the invention, the virtual smart card digital signature is an encrypted value ensuring that no other entity can forge an identity of a virtual smart card.

0375The payment server sends the debit command along with the virtual smart card digital signature to the VirtualSAFE server <b>108</b> to allow the virtual card to accept the debit. At this time, the payment server also logs the debit command into its database. Upon receiving the debit command from the payment server, the client module replaces the amount in the debit command with the original amount (from the merchant server) to ensure that the amount has not been tampered with while traveling over the network. At this time, the client module may also create a log of the debit command.

0376The client module forwards the debit command and virtual smart card digital signature to the emulator and it again retrieves the appropriate virtual card record from the database for processing. The card record is retained in memory while a transaction is occurring. The card record, debit command, and digital signature are sent to the CEV <b>109</b> where the virtual smart card digital signature is verified and a virtual card digital signature is generated. The card record is updated in the CEV <b>109</b> with revised parameters (including balance and transaction ID) to reflect the purchase transaction and returned to the card database. The client module receives the CEV <b>109</b> response and generates a “Debit Response” message along with the card digital signature. If the virtual card does not have enough value to satisfy the purchase amount, then a “Debit Response” message indicates as such. The card digital signature is a unique value identifying a valid virtual card in the card database. In one embodiment of the invention, the digital signature is in encrypted form to prevent tampering.

0377The emulator sends the response message along with the card digital signature back to the client module. At this point, the purchase amount has been deducted from the balance on the virtual card (assuming a successful transaction). Next, the client module packages the response message along with the card digital signature and sends them back to the payment server. The client module also logs the result of this virtual card debit.

0378The payment server receives the incoming message and creates a log and updates the transaction status in its database for, future error recovery. The payment server then directs this received message to the virtual smart card in the terminal. Next, the virtual smart card processes a this response from the VirtualSAFE server <b>108</b> and verifies the received virtual card digital signature.

0379As the virtual smart card contains the keys and algorithms necessary to compute card digital signatures, the virtual smart card is able to validate that a received virtual card digital signature is in fact a valid one by comparing this card digital signature with a generated expected value. A successful comparison indicates that a response message received from the virtual card is in fact a valid message and that the virtual card has been debited. An error result code or a comparison that is not successful potentially indicates that the virtual card has not been debited. This comparison of card digital signatures by the virtual smart card ensures that a virtual card is in fact debited before the merchant server is directed to release the purchased merchandise to the user. The virtual card digital signature is compared to an expected value and performed by the virtual smart card for the highest level of security possible. This comparison of virtual card digital signatures may also take place in the payment server, in the VirtualSAFE server <b>108</b>, in the client terminal, or in the merchant server, with a variety of other, advantages Assuming that the transaction is so far valid, the virtual smart card sends a response indicating the result of the digital signature verification. The payment server, uses this response to build a “Debit Result” message. If the transaction was invalid or if the verification failed, then an exception would be returned.

0380The terminal updates its data store with the virtual card number, a transaction count, and the total sale amount. Also updated is the response from the virtual smart card and transaction numbers from the virtual card and from the virtual smart card. The payment server also logs the response received from the terminal along with the merchant identifier, etc. Next, the payment server packages the result message including the transaction identifiers and sends this message to the VirtualSAFE server <b>108</b> in encrypted form. The server then passes the result to the emulator for appropriate database updates such as balance and ID. The transaction is also logged in the history file.

0381The result message is then forwarded to the client terminal. At this point, the transaction thread of the payment server that was used for the current transaction may release the terminal, thus allowing the terminal to be used by other transactions. The transaction thread then exits at this time.

0382By sending this result message in encrypted form, the confirmation included in the message may be passed to the merchant server by way of the client terminal without fear of tampering. As the result message is encrypted, it would be extremely difficult for the client terminal or another entity to forge a confirmation and trick the merchant server into thinking that a transaction had taken place. In one embodiment of the invention, if the client terminal is a trusted agent, then the result message need not be encrypted. In yet another embodiment of the invention, the payment server may send two confirmation messages, one not encrypted for the client terminal to process, and one encrypted for the merchant server, or both messages encrypted under different keys.

0383The client terminal then passes the result message on to the merchant server at the URL address previously received from the merchant server. The client may also post a message to the user informing that the debit has been completed. The client may also log confirmation of the payment. The merchant server, registers the confirmation included in the message and checks for success. The merchant server calls a validate routine within the merchant code module to validate the result message received via the client terminal. The validation routine decrypts the transaction identifier along with the encrypted result message. If the decrypted result message is acceptable, the merchant server then determines that a successful transaction has occurred. Next, the merchant server generates a message with the purchased information and delivers this information to the client terminal. The merchant server may generate a purchase receipt to deliver to the client terminal indicating that goods and services are to be rendered. At this point, the client terminal may log the merchant server's response. Completion of these steps indicates a successful financial transaction over the Internet using a virtual smart card.

0384For greater clarity, the above method may be described from a users perspective as follows.

0385First, a user sets up his or her virtual card within VirtualSAFE. In one embodiment of the invention, a physical card in the possession of the user is used to provide some of the information requested by the VirtualSAFE server <b>108</b>. The user accesses the VirtualSAFE server <b>108</b> over the Internet using a VSAA login URL to access the user, verification module. A screen is presented to the user which requests that the user enter his or her user identifier, a funding account number, the card verification value (“CVV”), expiration date of that account, billing address, electronic mail address, and a chosen PIN. Typically, the card verification value is a 3-digit value on the digital signature panel of a card and is used internationally for fraud deterrence. The first time the user identifier is entered it is in the clear. However, when the identifier is entered again by the user, this time perhaps for a transaction, it appears masked on the screen so as to be kept secret. The user verification module then presents a screen to the user indicating that a confirmation will be sent to the user's electronic mail address. The user then logs out.

0386Later, an electronic mail confirmation is sent that contains a one-time logon PIN. The user receives the electronic mail and begins the setup process by logging on to the URL of the VirtualSAFE server <b>108</b> and entering his or her user identifier, and one-time PIN for checking by the user verification module. Once these are verified, the user, is prompted to change the one-time PIN to a new user-selected PIN. The user verification module then assigns a unique identification number (“VSAA card identifier”) to the user.

0387During this session or at a later time, the user initiates value onto the virtual card. Initiation may be accomplished in several different ways. In one embodiment of the invention, a virtual card may come pre-initiated with a certain amount when an account is set up, that is, the balance in the database is positive for a particular record. Other methods of initiation may also be used.

0388The user accesses the merchant server web site via a communication link over the Internet This web sit access may be performed in any suitable fashion such as by using any commercially available web browser. Once at the merchant web site, the user is prompted to choose payment via either a physical smart card or via the virtual smart card of the present invention. If the user chooses payment via a physical smart card, then a purchase may proceed as described in U.S. patent application Ser. No. 08/951,614, which is incorporated herein by reference. If the user chooses the virtual card method, then the user is prompted for his or her user identifier (which preferably is masked on screen) and PIN that is verified by the VirtualSAFE server <b>108</b>.

0389Next, the user browses the merchant web site and selects goods and services for purchase from the merchant using the web site interface that the merchant has provided. The user then selects an appropriate button on the merchant web site to indicate what the user wishes to make a purchase. Next, the user receives a total sale amount from the merchant server, a current balance from the VirtualSAFE server <b>108</b>, and is directed to actuate a button on the web site indicating that the user wishes to proceed with the purchase using the virtual card.

0390The system processes the user order by way of the payment server, the VirtualSAFE server <b>108</b>, the terminal, and the virtual smart card. The user's virtual smart card is debited by the total sale amount and the user receives a “debited” message at the users terminal. This message is optional and is dependent on system design. The user receives a confirmation message from the merchant server indicating that the transaction has been completed. The user may now download the purchased information and/or receive a receipt for goods and services to be rendered or delivered from the merchant at a later date. The merchant, via a clearing and settlement system, receives payment to its bank account for the goods and services rendered by way of information collected from the payment server. In one embodiment of the invention, an existing clearing and settlement system is used as is existing methodology far transferring information from a smart card for later reconciliation. This use of an existing “back end” allows the present invention to be implemented more quickly and less expensively.

0391User Enrollment. Before using VirtualSAFE, users must be enrolled, Referring to <figref idref="DRAWINGS">FIGS. 3 through 12</figref>, the following is a description of the enrolment and sign-up process when a user is initially introduced and registered as a primary new user, within Virtual SAFE.

0392Merchant Enrolment. For merchant enrolment, the merchant has to authenticate an authorized person for VirtualSAFE. The authorized person enrolls the merchant by providing required information and documents, necessary for credit checks by a credit bureau or equivalent, as per local government regulations,

0393User Enrolment: Case 1. Referring to <figref idref="DRAWINGS">FIG. 3</figref>, there is shown a flowchart illustrating the steps for user enrollment in VirtualSAFE, in the general case, in accordance with an embodiment of the invention.

0394User Enrolment: Case 2. Referring to <figref idref="DRAWINGS">FIG. 4</figref>, there is shown a flowchart illustrating the steps for user (or, resource) enrollment in VirtualSAFE, in the case of “No Web certificate+Full VirtualSAFE Sign-Up Process+Payment Processing”, in accordance with an embodiment of the invention. The following steps are included:

0395Step 1—ACCESS

0396User decides to proceed with purchase (BUY)

0397Step 2—SSL. Certificate Handshake Attempted

0398The first authentication takes place as soon as the user has been accepted as a Registered User Site by use of the Secure Sockets Layer (SSL).

0399Step 3—Is the User's WEB Certificate present?

0400The system checks to see whether or not the user's WEB certificate is present. In the case illustrated by <figref idref="DRAWINGS">FIG. 4</figref>, it isn't available or present. Therefore, message <b>407</b>.<b>3</b> gets sent through the VirtualSAFE Web Certificate present site to the VirtualSAFE Web Certificate not present site indicating that no Web Certificate exists to authenticate the user. The user is redirected.

0401Step 4—No Certificate SSL Session

0402SSL session is established by the Web Server generating a temporary user session certificate.

0403Step 5—Existing VirtualSAFE User

0404Is the user an existing VirtualSAFE client or is this the first time they are trying to sign up and process a payment? NO

0405Step 6—Active X/Java Applet/Application sends dedicated public WEB server key to client

0406Once this has been done.

0407Step 7—Enrolment/registration page

0408The client is hyperlinked to the Enrolment/registration page where they enter their personal data, credit data, email data, etc. Note: The data entered by the user will not have to be entered again, as all of the information provided will be stored in VirtualSAFE. Once the user has completed entering their information:

0409Step 8—Partial Enrolment

0410A VirtualSAFE certificate will be created for the user

0411The user's data and the user's VirtualSAFE certificate will be stored to the Secure Data Repository.

0412All of the user's VirtualSAFE data will be stored to the VirtualSAFE x500

0413The user's WEB certificate will be created

0414The user's WEB certificate will be downloaded and sent to them

0415The user's WEB data will be stored to the WEB x500

0416Step 9—Confirmation to the user—Full enrolment

0417Would you like to enroll with VirtualSAFE? YES

0418Step 10—Enrolment to VirtualSAFE community

0419This is where the final user, setup is confirmed and additional data is encrypted with the VirtualSAFE Certification Authority Public Key, which also includes:

04201st identification string

04212nd identification string

0422Dynamic PIN (pre-generated number)

0423Additional data encrypted with a VirtualSAFE CA Public Key

0424And, any keyword(s) that may be need for further authentication

0425Step 11—The enabler

0426The user has become a registered and authenticated VirtualSAFE user and can now shop anywhere on the net, their information is stored in encrypted form to Oracle, or any database, etc., and an email of registered confirmation is sent to them, as well as a cancellation procedure.

0427User Enrolment: Case 3. Referring to <figref idref="DRAWINGS">FIG. 5</figref>, there is shown a flowchart illustrating the steps for user (or resource) enrollment in VirtualSAFE, in the case of “No WEB certificate+Only Payment Processing”, in accordance with an embodiment of the invention. The following steps are included:

0428Step 1—ACCESS

0429User decides to proceed with purchase (BUY)

0430Step 2—SSL Certificate Handshake Attempted

0431The first authentication takes place as soon as the user has been accepted as a Registered User Site by use of the Secure Sockets Layer (SSL).

0432Step 3—Is the User's WEB Certificate present?

0433The system checks to see whether or not the users WEB certificate is present. In the <figref idref="DRAWINGS">FIG. 5</figref> case, it isn't available or present. Therefore, message <b>407</b>.<b>3</b> gets sent through the VirtualSAFE Web Certificate present site to the VirtualSAFE Web Certificate not present site indicating that no Web Certificate exists to authenticate the user. The user is redirected.

0434Step 4—No Certificate SSL Session

0435SSL session is established by the Web Server generating a temporary user session certificate.

0436Step 5—Existing VirtualSAFE User

0437Is the user an existing VirtualSAFE client or is this the first time they are trying to sign-up and process a payment? NO

0438Step 6—Active X/Java Applet/Application sends dedicated public WEB server key to client

0439Once this has been done.

0440Step 7—Enrolment/registration page

0441The client is hyperlinked to the Enrolment/registration page where they enter their personal data, credit data, email data, etc. Note: The data entered by the user, will not have to be entered again, as all of the information provided will be stored in the VirtualSAFE Once the user has completed entering their information:

0442Step 8—Partial Enrolment

0443A VirtualSAFE certificate will be created for the user

0444The user's data and the user's VirtualSAFE certificate will be stored to the Secure Data Repository.

0445All of the users VirtualSAFE data will be stored to the VirtualSAFE x500

0446The user's WEB certificate will be created

0447The user's WEB certificate will be downloaded and sent to them

0448The user's WEB data will be stored to the WEB x500

0449Step 9—Confirmation to the user-Full enrolment

0450Would you like to enroll with VirtualSAFE? NO

0451Step 10—The enabler

0452The user has become a registered and authenticated VirtualSAFE user and can now shop anywhere on the Internet, their information is stored in encrypted form to Oracle, or any other database, etc., and an email of registered confirmation is sent to them, as well as a cancellation procedure

0453User Enrolment: Case 4. Referring to <figref idref="DRAWINGS">FIG. 6</figref>, there is shown a flowchart illustrating the steps for user (or resource) enrollment in VirtualSAFE, in the case of “No Web certificate+Already a VirtualSAFE member+Known PIN”, in accordance with an embodiment of the invention. The following steps are included:

0454Step 1—ACCESS

0455User decides to proceed with purchase (BUY)

0456Step 2—SSL Certificate Handshake Attempted

0457The first authentication takes place as soon as the user has been accepted as a Registered User Site by use of the Secure Sockets Layer (SSL).

0458Step 3—Is the User's WEB Certificate present?

0459The system checks to see whether or not the user's WEB certificate is present. In the <figref idref="DRAWINGS">FIG. 6</figref> case, it isn't available or present Therefore, message <b>407</b>.<b>3</b> gets sent through VirtualSAFE Web Certificate present site to the VirtualSAFE Web Certificate not present site indicating that no Web Certificate exists to authenticate the user. The user, is redirected.

0460Step 4—No Certificate SSL Session

0461SSL session is established by the Web Server generating a temporary user session certificate.

0462Step 5—Existing VirtualSAFE User

0463Is the user, an existing VirtualSAFE client or is this the first time they are trying to sign-up and process a payment? YES

0464Step 6—Active X/Java Applet/Application sends dedicated public WEB server key to client

0465Once this has been done.

0466Step 7—Identification strings authenticated

04671st identification string

04682nd identification string

0469Search of x500 directory is done

0470Step 8—Is the user authenticated?

0471The system checks the VirtualSAFE x500 for verification. YES.

0472Step 9—Creates new WEB certificate

0473Once the user has been authenticated, the system creates a new WEB certificate and downinitiations it to the client, and the Session Cookie is sent to the user.

0474Step 10—PIN identification (policy)

0475The system displays to the user the PIN Identification Policy page.

0476Step 11—Encrypted PIN authentication page

0477The system checks to ensure whether the encrypted PIN number entered by the user matches the encrypted PIN on the system.

0478If YES, the encrypted PIN matches, then the user is sent to:

0479Step 12—User Preference Page, and then to wherever they would like to shop on the net.

0480However, if NO the encrypted PIN doesn't match, then the method illustrated in <figref idref="DRAWINGS">FIG. 5</figref> is followed.

0481User Enrolment: Case 5. Referring to <figref idref="DRAWINGS">FIG. 7</figref>, there is shown a flowchart illustrating the steps for user (or resource) enrollment in VirtualSAFE, in the case of “No Web certificate+Already a VirtualSAFE member+Unknown encrypted PIN+email notification”, in accordance with an embodiment of the invention. The following steps are included:

0482Step 1—PIN authentication page

0483The system checks to ensure whether the encrypted PIN number entered by the user matches the encrypted PIN on the system. If NO the encrypted PIN doesn't match, then: Message is sent by email to the user, and the user is redirected to the WEB enrolment page.

0484Step 2—Enrolment/Registration page

0485The client is hyperlinked to the Enrolment/Registration page where they re-enter/or confirm their personal data, credit data, email data, etc. Note: The data entered by the user will never ever have to be entered again, as all of the information provided will be stored in the VirtualSAFE Once the user has completed entering their information:

0486Step 3

0487A VirtualSAFE certificate will be created for the user

0488The user's data and the user's VirtualSAFE certificate will be stored to the Secure Data Repository.

0489All of the users VirtualSAFE data will be stored to the VirtualSAFE x500

0490The user's WEB certificate will be created

0491The user's WEB certificate will be downinitiationed and sent to them

0492The user's WEB data will be stored to the WEB x500

0493Step 4—Confirmation to the user

0494Would you like to enroll with VirtualSAFE? NO

0495Step 5—The enabler

0496The user has become a registered and authenticated VirtualSAFE user, and can now shop anywhere on the net, their information is stored in encrypted form to Oracle, or any other database, etc., and an email of registered confirmation is sent to them, as well as a cancellation procedure.

0497User Enrolment: Case 6. Referring to <figref idref="DRAWINGS">FIG. 8</figref>, there is shown a flowchart illustrating the steps for user (or resource) enrollment in VirtualSAFE, in the case of “No Web certificate+Already a VirtualSAFE member+no x500 entry”, in accordance with an embodiment of the invention. The following steps are included:

0498Step 1—ACCESS

0499User decides to proceed with purchase (BUY)

0500Step 2—SSL Certificate Handshake Attempted

0501The first authentication takes place as soon as the user has been accepted as a Registered User Site by use of the Secure Sockets Layer (SSL).

0502Step 3—Is the User's WEB Certificate present?

0503The system checks to see whether or not the user's WEB certificate is present. In the <figref idref="DRAWINGS">FIG. 8</figref> case, it isn't available or present. Therefore, message <b>407</b>.<b>3</b> gets sent through VirtualSAFE Web Certificate present site to the VirtualSAFE Web Certificate not present site indicating that no Web Certificate exists to authenticate the user. User redirected.

0504Step 4—No Certificate SSL Session

0505SSL session is established by the Web Server generated a temporary user session certificate.

0506Step 5—Existing VirtualSAFE User

0507Is the user an existing VirtualSAFE client or is this the first time they are trying to sign-up and process a payment? NO

0508Step 6—Active X/Java Applet/Application sends dedicated public WEB server key to client

0509Once this has been done.

0510Step 7—Identification strings authenticated

05111st identification string

05122nd identification string

0513Search of x500 directory is done

0514Step 8—Is the user authenticated?

0515The system checks the VirtualSAFE x500 for verification NO.

0516Step 9—Enrolment/Registration page

0517The client is hyperlinked to the Enrolment/Registration page where they re-enter/or confirm their personal data, credit data, email data, etc. Note: The data entered by the user will never ever is have to be entered again, as all of the information provided will be stored in the VirtualSAFE. Once the user has completed entering their information:

0518Step 10

0519A VirtualSAFE certificate will be created for the user

0520The user's data and the users VirtualSAFE certificate will be stored to the Secure Data Repository.

0521All of the user's VirtualSAFE data will be stored to the VirtualSAFE x500

0522The user's WEB certificate will be created

0523The user's WEB certificate will be downinitiationed and sent to them

0524The user's WEB data will be stored to the WEB x500

0525Step 11—Confirmation to the user

0526Would you like to enroll with VirtualSAFE? YES/NO

0527Step 12—The enabler

0528The user has become a registered and authenticated VirtualSAFE user and can now shop anywhere on the net, their information is stored in encrypted form to Oracle, or any other database, etc., and an email of registered confirmation is sent to them, as well as a cancellation procedure.

0529User Enrolment: Case 7. Referring to <figref idref="DRAWINGS">FIG. 9</figref>, there is shown a flowchart illustrating the steps for user (or resource) enrollment in VirtualSAFE, in the case of “Web certificate+Unknown/Known PIN”, in accordance with an embodiment of the invention. The following steps are included:

0530Step 1—ACCESS

0531User decides to proceed with purchase (BUY)

0532Step 2—SSL Certificate Handshake Attempted

0533The first authentication takes place as soon as the user has been accepted as a Registered User Site by use of the Secure Sockets Layer (SSL).

0534Step 3—Is the WEB Certificate present?

0535The system checks to see whether or not a WEB certificate is present. In the <figref idref="DRAWINGS">FIG. 9</figref> case, the WEB certificate is present.

0536Step 4—WEB Certificate is present

0537The system performs a two-way authentication process.

0538Step 5—Checks VirtualSAFE certificate-x500

0539The system checks the VirtualSAFE x500 to Electronically Authenticate the computer.

0540Step 6—Checks for VirtualSAFE certificate

0541The system checks for a VirtualSAFE certificate by flagging the VirtualSAFE x500 directory. When the system confirms that the VirtualSAFE certificate is available, the user is routed to Step 7.

0542Step 7—Active X/Java Applet/Application sends dedicated public WEB server key to client

0543Once this has been done.

0544Step 8—Identification strings authenticated

05451st identification string

05462nd identification string (optional)

0547Search of x500 directory is done

0548Step 9—is the user authenticated?

0549The system checks the VirtualSAFE x500 for verification. YES.

0550Step 10—Active X/Java Applet/Application sends dedicated public WEB server key to client

0551Once this has been done.

0552Step 11—PIN identification (policy)

0553The system displays to the user the PIN Identification Policy page.

0554Step 12—PIN authentication page

0555The system checks to ensure whether the PIN number entered by the user matches the PIN on the system. If YES, the PIN matches, then the user is sent to: Step 13-User Preference Page, and then to wherever they would like to shop on the net. However, if NO the PIN doesn't match, then the <figref idref="DRAWINGS">FIG. 7</figref> method is followed to completion,

0556User Enrolment: Case 8 Referring to <figref idref="DRAWINGS">FIG. 10</figref>, there is shown a flowchart illustrating the steps for user (or resource) enrollment in VirtualSAFE, in the case of “Web certificate (No VirtualSAFE)+Unknown/Kno-wn PIN”, in accordance with an embodiment of the invention. The following steps are included:

0557Step 1—ACCESS

0558User decides to proceed with purchase (BUY)

0559Step 2—SSL, Certificate Handshake Attempted

0560The first authentication takes place as soon as the user has been accepted as a Registered User Site by use of the Secure Sockets Layer (SSL.)

0561Step 3—Is the WEB Certificate present?

0562The system checks to see whether or, not a WEB certificate is present. In the <figref idref="DRAWINGS">FIG. 10</figref> case, the WEB certificate is present.

0563Step 4—WEB Certificate is present

0564The system performs a two-way authentication process.

0565Step 5—Checks VirtualSAFE x500

0566The system checks the VirtualSAFE x500 to Electronically Authenticate the user. The e-authenticate interoperable module checks the validity of the web certificate by checking the content of the directory of the originating CA. The VirtualSAFE Policy will determine whether the VirtualSAFE directory, or the originating directory is checked or both are checked.

0567Step 6—Checks for VirtualSAFE certificate

0568The system checks for a VirtualSAFE certificate by flagging the VirtualSAFE x500 directory. If the VirtualSAFE certificate cannot be verified, then the user will go to Login to VirtualSAFE/Enrol in VirtualSAFE to be confirmed and then carry on to Step 7.

0569Step 7—Active X/Java Applet/Application sends dedicated public WEB server key to client

0570Once this has been done.

0571Step 8—Identification strings authenticated

05721st identification string

05732nd identification string (optional)

0574Search of x500 directory is done

0575Step 9—Is the user authenticated?

0576The system checks the VirtualSAFE x500 for verification. YES.

0577Step 10—Active X/Java Applet/Application sends dedicated public WEB server key to client

0578Once this has been done.

0579Step 11—PIN identification (policy)

0580The system displays to the user the PIN Identification Policy page.

0581Step 12—PIN authentication page

0582The system checks to ensure whether the PIN number entered by the user matches the PIN on the system. If YES, the PIN matches, then the user is sent to: Step 13—User Preference Page, and then to wherever they would like to shop on the net. However, if NO the PIN doesn't match, then the method of <figref idref="DRAWINGS">FIG. 5</figref> is followed to completion.

0583User Enrolment: Case 9. Referring to <figref idref="DRAWINGS">FIG. 1</figref>, there is shown a flowchart illustrating the steps for user (or resource) enrollment in VirtualSAFE, in the case of “WEB certificate (No VirtualSAFE)+Enrolment/P-ayment Process”, in accordance with an embodiment of the invention. The following steps are included:

0584Step 1—ACCESS

0585User decides to proceed with purchase (BUY)

0586Step 2—SSL Certificate Handshake Attempted

0587The first authentication takes place as soon as the user has been accepted as a Registered User Site by use of the Secure Sockets Layer (SSL).

0588Step 3—Is the WEB Certificate present?

0589The system checks to see whether, or not a WEB certificate is present. In the <figref idref="DRAWINGS">FIG. 11</figref> case, the WEB certificate is present.

0590Step 4—WEB Certificate is present

0591The system performs a two-way authentication process.

0592Step 5—Checks VirtualSAFE x500

0593The system checks the VirtualSAFE x500 to Electronically Authenticate the user. The e-authenticate interoperable module checks the validity of the web certificate by checking the content of the directory of the originating CA. The VirtualSAFE Policy will determine whether the VirtualSAFE directory, or the originating directory is checked or both are checked.

0594Step 6—Checks for VirtualSAFE certificate

0595The system checks for a VirtualSAFE certificate by flagging the VirtualSAFE x500 directory. When the system confirms that the VirtualSAFE certificate is available, the user is routed to Step 7. If the VirtualSAFE certificate cannot be verified, then the user will go to Login to VirtualSAFE/Enroll in VirtualSAFE to be confirmed and then carry on to Step 7.

0596Step 7—Active X/Java Applet/Application sends dedicated public WEB server key to client

0597Once this has been done.

0598Step 8—Enrolment/Registration page

0599The client is hyperlinked to the Enrolment/Registration page where they re-enter/or confirm their personal data, credit data, email data, etc. Note: The data entered by the user will never ever have to be entered again, as all of the information provided will be stored in the VirtualSAFE. Once the user has completed entering their information:

0600Step 9

0601A VirtualSAFE certificate will be created for the user

0602The user's data and the user's VirtualSAFE certificate will be stored to the Secure Data Repository.

0603All of the users VirtualSAFE data will be stored to the VirtualSAFE x500

0604Step 10—Confirmation to the user

0605Would you like to enroll with VirtualSAFE? NO

0606Step 11—The enabler

0607The user has become a registered and authenticated VirtualSAFE user and can now shop anywhere on the net, their information is stored in encrypted form to Oracle, or any other database, etc., and an email of registered confirmation is sent to them, as well as a cancellation procedure.

0608CA Processes. Referring to <figref idref="DRAWINGS">FIG. 12</figref>, there is shown a flowchart illustrating CA process steps in accordance with an embodiment of the invention. The steps to be followed are as per Certificate Policies (CP) and Certificate Practice Statements (CPS).

0609Enrolment Policy. Procedures for handling incorrect PIN or mistyped PIN are handled in accordance to VirtualSAFE Policy and/or Merchant/Business Policy.

0610Module Block Diagrams. In the following, and referring to <figref idref="DRAWINGS">FIGS. 13 through 29</figref>, block diagrams and more detailed descriptions are included for selected VirtualSAFE modules.

0611Participants Referring to <figref idref="DRAWINGS">FIG. 13</figref>, there is shown a block diagram illustrating the participants and their, contractual relationships in VirtualSAFE in accordance with an embodiment of the invention. The electronic commerce environment requires significant security and auditing processes bound to the actual business operations and processes. Accordingly, the primary concerns are the contractual relationship between parties, the enforcement of the business policy, and the transparency of the processes.

06121. VirtualSAFE Business Policy. Within the VirtualSAFE Business Policy there are three main components that that will never be compromised and they are: Privacy, Security, and Ease of Use.

0613Privacy: The securely structured attributes that are handled and covered under the Privacy aspect of the VirtualSAFE Business Policy include:

0614ACCESS And PRIVILEGES. In VirtualSAFE, only the user has access to their private information.

0615Compliancy And Standards. VirtualSAFE adheres to the World Privacy Regulations and Standards.

0616Higher Power Rule. In VirtualSAFE, Third Party access to private and personal information can only be granted by Court Order. This signifies the only time when a user's private information can be attained other than by the user.

0617Security: The securely structured attributes that are handled and covered under the Security aspect of the VirtualSAFE Business Policy include:

0618International Security Standards. VirtualSAFE follows all international standards for, the security within x500 directories and is 140 FIPS/3 Complaint.

0619Monitoring, Support And Control. VirtualSAFE is comprehensively monitored 24 hours per day, 7 days per week. There is no shutdown time and support is readily available if required.

0620Remote Virus Scan. VirtualSAFE is continuously being upgraded with new virus protection directly and remotely to ensure the optimum in service, and security structure. As a leading technology in e-commerce secure systems, VirtualSAFE provides their users with the confidence that their information is secure from any virus and/or unwelcome invasion,

0621Ease of Use. The securely structured attributes that are handled and covered under the Ease of Use aspect of the VirtualSAFE Business Policy include:

0622User Experience. VirtualSAFE does not change the experience of the present user meaning that the user already has the basic skills that are required. In order to use Virtual SAFE.

0623Info Entered Once. In VirtualSAFE, the user only has to input their private and personal information once, and then it is stored in the VirtualSAFE. Every time they login afterwards, their identity and credit attributes are linked to their digital ID.

0624Click-And-Go. VirtualSAFE users experience Click-and-Go from any VirtualSAFE site. Their digital IDs are recognized everywhere and they can jump from site to site quite easily.

06252. Business Policy (Third Party) VirtualSAFE has the capability, and complies to other businesses' business policies, so as not to comprise their way of doing business.

0626Enrolment. Referring to <figref idref="DRAWINGS">FIG. 14</figref>, there is shown a block diagram illustrating the enrollment process in VirtualSAFE in accordance with an embodiment of the invention. VirtualSAFE registers users' personal data (i.e. credit card information) once. Data pertaining to their enrolment, authentication, and reference is contained within VirtualSAFE. The User is issued a digital ID so that the user never, has to enter their data online again. Enrolment data is stored securely in VirtualSAFE under a strict policy.

06271. Enrolment in VirtualSAFE. In VirtualSAFE, there are four enrolment levels: resource enrolment, customer enrolment, attribute resource enrolment, and employee enrolment. With respect to employee enrolment levels, two controls are established, both locally and remotely: IT Access Control and Physical Access Control

06282. VirtualSAFE Customer Authentication Enrolment. Within VirtualSAFE, customers are authenticated using their, digital IDs.

06293. User Authentication. Within VirtualSAFE, the users are authenticated using their digital IDs.

06304. Reference Validation. If for some reason there is a problem in recognition, then reference validation is the next step used to authenticate the user, customer and/or resource.

0631Online Transactions. Referring to <figref idref="DRAWINGS">FIG. 15</figref>, there is shown a block diagram illustrating the online transaction process in VirtualSAFE in accordance with an embodiment of the invention. VirtualSAFE operates as an authentication layer or authentication authority between the user, the terminal and the VirtualSAFE server. Through a multi-tiered authentication mechanism, the remote user is queried and authenticated to produce smart card emulation as if the physical card was present.

06321. Customer Browses Site. In VirtualSAFE, customers using their digital certificates enables them to browse their online banking sites and use the smart card application.

06332. Secured And Authenticated Access. Once the user/employee/customer has been authenticated in VirtualSAFE, they have access to online banking, the online brokerage, account data aggregation reports and audit performance, and online payment transaction requests; such as credit/debit card, electronic check, wire transfer, etc. They also have access to a VirtualSAFE Deposit Box (VSDB), And finally, the users have access to other valuable services such as the following:

0634Secure e-mail

0635Logistics support for individual, small and medium-sized businesses.

0636An application front-end that is easy to understand and use.

0637Application accessible through the inter/intranet.

0638VirtualSAFE is interoperable with existing professional or custom applications.

0639Secure collaboration place.

0640Server, Authentication. Referring to <figref idref="DRAWINGS">FIG. 16</figref>, there is shown a block diagram illustrating the server authentication process in VirtualSAFE in accordance with an embodiment of the invention. The Secure Remote Pointer (SRP) is a VirtualSAFE compatible application that runs as a web browser, plug in, applet or application. The SRP is used by the user, browser client to conduct secure communication with VirtualSAFE. This process is initiated when the user clicks on a redirection link (RL) that requires an authentication and authorization check. The SSL Server Authentication is established as follows:

06411. VirtualSAFE Server Initiates One-Way SSL. Handshake With User.

06422. Server Authentication. The server is then further authenticated as VirtualSAFE stores the transmitted information and queries the received digital certificate.

0643Computer, Authentication. Referring to <figref idref="DRAWINGS">FIG. 17</figref>, there is shown a block diagram illustrating the computer, authentication process in VirtualSAFE in accordance with an embodiment of the invention. The VirtualSAFE Virtual Identity (VI) process involves the use of a PKI Digital Certificate. The Virtual Identity (VI) includes the following:

0644A Web certificate from a third party or, ECA public and private key of the user.

0645Authentication is initiated over, a secure SSL channel

0646Computer Authentication is established as follows:

06471. VirtualSAFE Server initiates a One-Way SSL Handshake

06482. Digital Certificate (PKI) Establishes a Two-Way SSL Handshake. The two-way SSL handshake ensures that VirtualSAFE interoperability functions properly, VirtualSAFE is X509 compatible with Entrust, Baltimore, Verisign, etc., VirtualSAFE second phase is EC{circumflex over ( )}2 compliant (Certicom), and that VirtualSAFE is compliant with other PKI standards (i.e. Meta, etc).

06493. By Verification of X500 Global Directory. VirtualSAFE is fully capable of determining certificate authenticity by verifying public directories (e.g. Entrust, Baltimore, Verisign, etc.).

0650User Authentication. Referring to <figref idref="DRAWINGS">FIG. 18</figref>, there is shown a block diagram illustrating the user authentication process in VirtualSAFE in accordance with an embodiment of the invention. The entire communication will take place over a client-server authenticated SSL channel establishing two-way authentication using digital certificate distribution. Encryption and signing of the data package is completed entirely within the secure confines of the Secure Remote Pointer (SRP). The user data stored in the Virtual Identity may include the following:

0651Encrypted PIN and other access data

0652Authentication Authority (AA) reference data

0653Personal User Data

0654Financial User Data

0655Once the user data has been stored within VirtualSAFE, the following steps may take place to ensure that the user is authenticated:

06561. Virtual SMART CARD (VSC) is activated. A remote virus check is performed and an optional keystroke is checked and the VirtualSAFE certificate application is validated.

06572. VirtualSAFE Secure Plug-In/Application Activated.

06583. User Presents Identification Strings.

06594. Virtual Smart Card Identifies User in VS X500 Directory.

06605. User's Pin And Timestamp are Triple Encrypted—Digitally Signed.

06616. VirtualSAFE Decrypts Digitally Signed Users Pin And Timestamp.

06627. User Encrypted Pin is Validated by VirtualSAFE.

06638. VirtualSAFE Encrypted Prefix Validated by Supervisor.

06649. VirtualSAFE Proceeds with Back-End Authentication.

0665Back-End Authentication. Referring to <figref idref="DRAWINGS">FIG. 19</figref>, there is shown a block diagram illustrating the back-end authentication process in VirtualSAFE in accordance with an embodiment of the invention. The VirtualSAFE Payment Processing Engine consists of servers and connectivity to a payment gateway. The VirtualSAFE Risk Management Engine augments the payment processing functionality by providing intermediate vetting of transactions prior to execution by a remote processor. Credit Risk Management occurs in different scenarios of customer enrolment, management, and payment processing. An individual customer's credit rating is used to determine acceptability of payment transaction processing. For back-end authentication, the following six steps are included in the authentication process:

06661. Risk Management Score value verifications are done both internally and externally and VirtualSAFE stores the assessment result.

06672. Insurance Module—Policy Adjustment Limit.

0668Business Liability Policy—Transaction Value

0669User Liability Policy—Limited by Credit Worth

06703. Messaging—E-Mail or Notification

0671Internal—Business Unit or Administrator

0672External—Business Partner or User

06734. VirtualSAFE Encrypted Transaction Log. An encrypted transaction log that stores all a transaction records going through the VirtualSAFE.

06745. Policy. Three policies are used in back-end authentication: PKI Policy (PC and PCA) as regulated by standard procedure; VirtualSAFE Privacy and Business Policy; and, Third Party Business Policy.

06756. Fulfillment Procedure. The fulfillment procedure for back-end authentication is just that, a fulfillment. Authentication of transactions, communications, data storage, access control, administration, and VirtualSAFE value-added services is completed.

0676Fulfillment. Referring to <figref idref="DRAWINGS">FIG. 20</figref>, there is shown a block diagram illustrating the fulfillment process in VirtualSAFE in accordance with an embodiment of the invention. The VirtualSAFE Transaction Fulfilment Mechanism (TFM) consists of a set of fraud management heuristics that are invoked in a progression. The fulfillment condition will dictate what type of delivery is to be made. The TFM and fraud management heuristic is comprised of the following steps:

06771. Customer Authentication Scoring

06782. Credential Identification Scoring

06793. Transaction Risk Scoring

06804. Fulfilment Response

06815. Fulfilment Delivery

0682The transaction fulfillment mechanism (TFM) assures the following:

0683Secured transactions

0684Customer and merchant audits

0685Customer and merchant liability insurance

0686Transaction value insurance

0687Fraud control

0688Delivery control

0689Loyalty program

0690In assuring these items, the transaction fulfillment mechanism (TFM) allows for the following payment types to be performed

0691Online credit card payment

0692Debit card payment

0693Electronic check

0694Wire

0695Electronic transfer of funds

0696Coin payments

0697Stored-value cards

0698The transaction fulfillment mechanism (TFM) also provides the following services:

0699Data storage

0700Secure e-mail

0701Logistic support for individual, small and medium size businesses including the following features: an application front-end that is easy to understand and that is user friendly; the application is accessible through the internet/intranet; and, VirtualSAFE is interoperable with existing professional or custom applications.

0702Secure Collaboration Place

0703Attribute Authentication Authority. Referring to <figref idref="DRAWINGS">FIG. 21</figref>, there is shown a block diagram illustrating the attribute authentication authority process in VirtualSAFE in accordance with an embodiment of the invention. By definition, access control entails the limiting of activities of a user on the system. Enforcement of such controls is accomplished by maintaining a reference monitor that mediates access attempts by consulting an authorization base to determine if the user attempting the access is authorized to do so. A distinction is made here between authentication and access control, where authentication merely confirms the identity of the user, while access control establishes identity privileges on the basis of successful authentication.

0704Virtual Identity (VI). Referring to <figref idref="DRAWINGS">FIG. 22</figref>, there is shown a block diagram illustrating the virtual identity (VI) process in VirtualSAFE in accordance with an embodiment of the invention. User identity authentication is initiated for each individual transaction by triggering a multi-tiered algorithm that employs Virtual Smart Card technology to interface with standard PKI. Authentication is only possible when the users personalized “virtual smart card” allows VirtualSAFE to access the respective “virtual identity”.

07051. Virtual Identity (VI) Private Information. VI is used to create and maintain encrypted data from source data based on provided and validated information

07062. Virtual Identity (VI) Secret Information. VI maintains this information that is encrypted and accessible only to a single user, Only the user knows secret information whose secret it is.

07073. Virtual Identity (VI) Shared Secret Information VI maintains this information that is encrypted and accessible only to the user and the VirtualSAFE proxy. Secret information is known only by the user whose secret it is and by the VirtualSAFE proxy.

07084. Virtual Identity (VI) Physical Material. Physical material could be represented by digital certificate or a unique software code (e.g. script, program or special code). Physical material may include the following: Local, Digital Certificate (Personal Computer, Computer and/or Web Digital Certificate, Smart Card, Magnetic Card or any device operated by the user); VirtualSAFE Certificate (Digital Certificate is a Digital Certificate stored in any type of Repository or VirtualSAFE Repository managed by VirtualSAFE); and, Unique Identifier (Identifier issued uniquely to a user). Technological standards may include the following: Encryption Basis (RSA, CEV and other types of algorithm) and Public Key Infrastructure (PKI, X500, ME-TA, etc.).

0709Virtual Smart Card (VSC). Referring to <figref idref="DRAWINGS">FIG. 23</figref>, there is shown a block diagram illustrating the virtual smart card (VSC) process in VirtualSAFE in accordance with an embodiment of the invention. The Virtual Smart Card (VSC) is a VirtualSAFE internal application that acts as a local secure proxy to an external virtual authentication token accessed via the Secure Remote Pointer (SRP). The VSC authenticates, encrypts and decrypts VirtualSAFE user data using a multi Public Key Infrastructure (PKI) managed service. The VSC implements a multi-tiered PKI by designating dual sets of key pairs for each user: one External and one Internal Public-Private key pair.

07101. Virtual Smart Card (VSc) Functions

0711The Virtual Smart Card is the emulation base of the reader and the smart card on a remote location.

0712The Virtual Smart Card is used to authenticate user access.

0713All information belonging to enrolled members is stored and protected by a proprietary encryption scheme using a high-speed hybrid approach.

0714The Virtual Smart Card coordinates the privacy policy.

07152. VirtualSAFE Digital Certificate (DC) Repository

0716Users remote or roaming digital certificates are stored securely.

07173. Virtual Smart Card Authentication

0718User authentication using virtual identity.

0719User identity is combined of secret shared secret and physical elements (PKI).

07204. Access Portfolio

0721Private, Shared, Business or Government.

07225. Personal and Financial (P/F) Information

0723Personal identity data (e.g. ID, driver's license, address, health card, etc.).

0724Financial information (e.g., account numbers, credit/debit card, wire, etc.).

07256. Applications

0726Remote software licensing.

07277. Back-Up

0728Transaction logs.

0729Transaction revisions.

0730Logs.

07318. Internal Access

0732VirtualSAFE, Private, Shared, Business and Government.

0733VirtualSAFE Deposit Box (VSDB). Referring to <figref idref="DRAWINGS">FIG. 24</figref>, there is shown a block diagram illustrating the VirtualSAFE deposit box (VSDB) process in VirtualSAFE in accordance with an embodiment of the invention. VirtualSAFE may also include an ASP (Active Server Pages) module. This will allow a user to access over two hundred news, stock, and information sources. The user, can choose from entertainment headlines, custom stock quotes, horoscope and relationship information, health and lifestyle stories, sports scores, news, and much more. To take advantage of these opportunities, the user will need to sign in with a VirtualSAFE VSC (Virtual Smart Card). The VirtualSAFE VSC is a single name and PIN that users can use to sign on to a number of major sites from VirtualSAFE compliant companies. VirtualSAFE uses AA to store the users VirtualSAFE settings, such as the content and colors they would like to see on their VirtualSAFE page. Users' personal and financial information, and their preferences, etc., are also stored. Since VirtualSAFE uses M and VSDB to store these settings, the user may view their VirtualSAFE page from any computer connected to the Internet. Also, each member of the user's family with a VirtualSAFE VSC may create and view his or her own personal VirtualSAFE page from the same computer. The user simply has to sign into VirtualSAFE when they visit the VirtualSAFE web site. The user may obtain a VirtualSAFE VSC and learn more about the advantages of having a VSC from a VirtualSAFE web site.

0734By signing into VirtualSAFE with a VSC, a user will be able to:

0735Find out if they have mail-or if their friends are online.

0736Personalize their VirtualSAFE home page once and view it from any computer, at home, at work, or on the road.

0737Choose headlines from popular websites.

0738Sign in safely and securely to access their personal settings. The user, and only the user, is the only person who may access his or her choices.

0739A user may also create a VirtualSAFE VSC test account. To do this, a user must register for a new VirtualSAFE account directly at the domain authority. Once the user's account is created, they will need to sign into a VirtualSAFE VSC Purchase (VVP) service site as a registered user. This allows the user to add a credit card, billing address, and shipping address to their VSDB. The user may want to create VSDB information for test-purposes that does not have genuine and negotiable credit cards attached to it.

0740The VSDB server, code may run a Luhn checksum test against all provided card numbers at Input time. The Luhn checksum test is mainly intended as a convenience for users who may have mistyped their number, but it is not a credit card verification, security check, or authorization per se. The Luhn checksum test will prevent a purely random credit card number, from being accepted as part of VirtualSAFE Deposit Box data. VirtualSAFE may performs other basic authorization and validation checks (e.g. state/ZIP code or Province/Postal code) when establishing a VSDB for a VirtualSAFE user. A phone number and e-mail addresses may be required fields for establishing a VSDB, even though they may be optional for a VirtualSAFE profile.

0741The VVP service is an easy-to-implement, server-based VSDB system that uses standard HTTP and Secure Sockets Layer (SSLL) methods/PKI-based to post payment information to participant sites. VirtualSAFE supports the Electronic Commerce Modeling Language (ECML) a which is an industry-standard e-commerce schema. The VSDB is compatible with popular web browsers. The VVP functions as follows:

07421. When a user clicks an express purchase link at a participant site, the VVP service sends the user forward to the VirtualSAFE VSDB and then authenticates the user and presents a page showing a list of that user's credit cards and addresses. This information represents the user's VSDB. The user selects the means of payment and the address to use for the transaction and then presses a button to continue.

07432. The VVP service then delivers the requested information from the user's VSDB to the participant site using a VVP order form returned over the SSL.

07443. VirtualSAFE is responsible for authorizing the payment from the user. The participant site is then responsible for adding any gift options, and completing the optional fulfillment transaction.

07454. If the user is a first-time VSDB user, the VVP service presents an empty form into which the user would enter the card and address he or she wants to use for the transaction. The user would then have to be authenticated prior to the purchase being approved, and the next time the user makes a purchase at a VirtualSAFE participant site, he or she would not need to retype any credit-card or address information as it will be already stored in VirtualSAFE and Will automatically be passed on to the VSDB.

0746Policy issues related to VVP service and participant sites may include the following:

0747Commitments and contractual obligations may be made when registering as a VirtualSAFE participant site.

0748Requirements may be established regarding the display of VirtualSAFE links or images on participant sites.

0749The VVP service may also include a fund allocation feature which may be entitled “VirtualSAFE Trust and Allowance”. This feature allows children and parents, or any authorized shared person, to relate to one another at a different level. Parents who are registered and authenticated users of VirtualSAFE may allocate a certain amount of pre-authorized spending money per, month to their children on their credit/debit card. Similarly, businesses or friends who are registered and authenticated users of VirtualSAFE may allocate a certain amount of pre-authorized spending money from their accounts to authorized personnel, friends, etc. These values may be added, modified, and authorized at the beginning of each month. Consider the following example:

07501 Pre-authorized Amount Child's Name Payment Purchases Balance Robert Smith 150.00 100.00 50.00 Anna Smith 150.00 57.00 93.00 Billy Smith 150.00 148.00 2.00

0751Now consider the situation of business-to-business shared accounts in which two businesses operate with one another. According to agreement, this application allows one business to access the other business's account for a pre-authorized and predetermined amount. A lender opens an account or allows shared access to a borrower. Furthermore, this application allows a financial transactions equivalent to the commercially known line of credit, mortgage loan, or loan. Here, a borrower, as permitted by a shared access agreement, can debit a particular lenders account using the strong authentication provided by VirtualSAFE's Authentication Authority or, if necessary, by VirtualSAFE's predefined Attribute Authentication Authority. The pre-authorized user is able to both debit and credit the account as per agreement and policy. The same approach may be used for shared-access in a document environment, or application environment, in which one entity (i.e. the account holder) may allows another user access for sharing in accordance with user definitions and privileges.

0752Referring again to <figref idref="DRAWINGS">FIG. 24</figref>, further features of the VSDB will now be described.

0753Using a PKI-based secure application, an enrolling applicant is prompted to store personal information to the VirtualSAFE local or remote VirtualSAFE deposit box (VSDB). The depositing of information is a unique process. It involves encrypting the information with a PKI cryptographic scheme that uses a high-speed hybrid approach and then storing elements of it in a fragmented arrangement. Only the authenticated user can bring these pieces together again to render the information usable. In this process, the user profile becomes a virtual safety deposit box or part of a “virtual identity”, the contents of which are accessible only to VirtualSAFE for the purpose of authentication, and only in the presence of the authorized user. The secure data is not accessible to any entity or application requesting user authentication or to VirtualSAFE administrators.

07541. VirtualSAFE Deposit Box (VSDB) Functions

0755VSDB is a secured remote storage control with access control maintained by the Virtual Smart Card.

07562. VirtualSAFE Deposit Box (VSDB) Usage

0757Single or multiple users can operate VSDB.

0758Users of VSDB will have different levels of privileges based on defined policy.

0759Users can communicate and store data in the following general formats: multi-lingual, multi-calendar, multi-currency, and multi-format (i.e. documents, drawings, formulas, and other file formats).

07603. VirtualSAFE Deposit Box (VSDB) Types. VSDB supports the following Deposit Box formats:

0761Private (i.e. Private and Family related information and Third Party authentication mechanisms, PINs, etc.)

0762Financial (i.e., All Private Financial related and Business/Government Financial related data.)

0763Business (i.e. All Business related data—Business Numbers, Documents, Legal and/or HR Documents, Drawings, etc.)

0764Government (i.e. All Government related data—Business Numbers, Documents, Legal and/or HR Documents, Drawings, etc.)

0765General (May be local or remote for customer based on Policy.)

0766Transaction (May be local or remote and this type of VSDB supports all data related to all transactions maintained by VirtualSAFE—All Private information is encrypted and maintained as per Privacy Policy and Government regulations.)

0767POS-VSC Emulation. Referring to <figref idref="DRAWINGS">FIG. 25</figref>, there is shown a block diagram illustrating the point-of-sale (POS) and virtual smart card (VSC) emulation process in VirtualSAFE in accordance with an embodiment of the invention. POS-VSC emulation is a low cost replacement for the physical smart card application. POS-VSC may be easily implemented on an existing financial network. Using the Virtual Smart Card (VSC) reduces the high cost of physical smart card implementation and critical maintenance issues, VirtualSAFE's PKI structure is used to authenticate users on any POS premise based on individual PINs (Personal Identification Numbers) in accordance with selected European standards. The Point of Sale (POS)/Virtual Smart Card emulation process may be performed as follows:

07681. Magnetic Card

0769User uses Credit/Debit card.

07702. Point Of Sale (POS)

0771POS requests Credit/Debit card payment authorization.

07723. Smart Card Reader

0773Merchant Smart Card identifies merchant to VirtualSAFE.

0774Received message from POS sent to VirtualSAFE.

07754. Transaction Request

0776VirtualSAFE receives transaction request.

0777VirtualSAFE requests user, PIN for authentication purposes.

07785. User Authentication Pin

0779User enters PIN for authentication purposes

0780Smart Card reader sends encrypted data to VirtualSAFE.

07816. Authentication

0782VirtualSAFE process authenticates customer.

07837. Messaging

0784Payment requested from the bank.

07858. Payment Processing

0786Credit/Debit card payment authorized/settled.

07879. Transaction Log

0788Message sent to VirtualSAFE.

0789All transaction steps are recorded.

079010. Smart Card Reader Confirmation

0791Smart Card reader receives authorization from Credit card processing department.

0792Decrypted message is sent to POS.

079311. Point Of Sale Authorization

0794POS receives authorized message in standard format.

0795Transaction authorized and printed.

0796ATM-VSC Emulation. Referring to <figref idref="DRAWINGS">FIG. 26</figref>, there is shown a block diagram illustrating the ATM and virtual smart card (VSC) emulation process in VirtualSAFE in accordance with an embodiment of the invention. ATM-VSC Emulation provides a solutions for physical smart card applications implemented on existing networks. Using a Virtual Smart Card (VSC) reduces the high cost of physical smart card implementation and critical maintenance issues. The user, authentication process is based on VirtualSAFE's PKI structure. VirtualSAFE applications implemented on supported servers does not require significant changes to existing ATM applications and networks. A security layer is implemented in existing applications and financial networks in accordance with current standards. The ATM/Virtual Smart Card emulation process may be performed as follows:

07971. Magnetic Card

0798User uses Credit/Debit magnetic card.

07992. Automatic Teller Machine (ATM)

0800The ATM requests Credit/Debit transaction authorization.

08013. Add-On ATM Application

0802Add-on ATM application maintains digital certificate with all security functions.

0803Magnetic reader reads card hash information.

0804Digital certificate encrypts and signs transaction and private information

08054. Transaction Request

0806VirtualSAFE received transaction request.

0807VirtualSAFE requests User PIN for authentication purposes.

08085. User Authentication PIN

0809User enters PIN for, authentication purposes.

0810ATM sends encrypted data to VirtualSAFE.

08116. Authentication

0812VirtualSAFE process authenticates customer.

08137. Messaging

0814Payment requested from the bank.

08158. Payment Processing

0816Credit/Debit card payment authorized/settled.

08179. Transaction Log

0818Message sent to VirtualSAFE.

0819All transaction steps are recorded,

082010. ATM Confirmation

0821ATM receives authorization message from Credit Card processing department.

082211. ATM Authorization

0823Transaction authorized and printed

0824POS/ATM/Wireless. Referring to <figref idref="DRAWINGS">FIG. 27</figref>, there is shown a block diagram illustrating the wireless POS and ATM process in VirtualSAFE in accordance with an embodiment of the invention. With respect to wireless VirtualSAFE access, the user may access the VirtualSAFE application through an analog or a digital wireless network using one of the following devices: cellular phone, PDA, two way radio, satellite, etc. VirtualSAFE provides a secure wireless application both locally and via the server. To wirelessly communicate with VirtualSAFE, either a standard wireless network can be used or a local wireless network (i.e., Blackberry, Blue Tooth, Infrared, etc.) may be used. With respect to local wireless VirtualSAFE access, the user may access the VirtualSAFE wireless application either locally or remotely. The local wireless application may communicate to a remote device through a conventional or wireless network. The local wireless authentication application may communicate to a remote VirtualSAFE device through a conventional or wireless network, SAFEcheck. Referring to <figref idref="DRAWINGS">FIG. 28</figref>, there is shown a block diagram illustrating the SAFEcheck process in VirtualSAFE in accordance with an embodiment of the invention. The VirtualSAFE Check Processing (VCP) enables streamlined and secure check processing and payments through a remote network connection. The VirtualSAFE method and system is employed in a traditional check processing protocol in which VirtualSAFE authenticates a check clearing transaction. This capability allows for the integration of electronic payments and check processing. The SAFEcheck process may be performed as follows:

08251. User Browses The Merchant Site

08262. User Selects SAFEcheck Payment

0827A digitally signed shopping cart contents and payment amounts are sent to VirtualSAFE.

0828User is then redirected to the VirtualSAFE secured site for further authentication.

08293. User Authentication

0830VirtualSAFE defines authentication level depending on payment amount and SAFEcheck Policy.

08314. Account Selected

0832User selects appropriate checking account from availability list.

08335. Account Digital Signature (DS)

0834User digitally signs SAFEcheck.

0835SAFEcheck signed with web certificate.

0836SAFEcheck signed with VirtualSAFE certificate.

08376. Clearance Request

0838VirtualSAFE issues clearance request.

08397. Financial Institution

0840Receives SAFEcheck for check presentment.

08418. Check Printer

0842SAFEcheck has been printed on premises including customer signature.

0843Printer uses regulated check paper with appropriate coding.

08449. Electronic Check Presentment (ECP)

0845VirtualSAFE application interfaces with Electronic Check Presentment module SAFEcheck cleared and processed.

084610. Confirmation

0847VirtualSAFE receives confirmation.

0848VirtualSAFE sends confirmation to merchant and user to complete transaction.

084911. Merchant Prints SAFEcheck

0850Merchant prints out user, signed copy of cleared check.

0851User optionally signs SAFEcheck at merchant premises.

0852Physical Access Control, Referring to <figref idref="DRAWINGS">FIG. 29</figref>, there is shown a block diagram illustrating physical access control in VirtualSAFE in accordance with an embodiment of the invention. Physical Access Control or SAFEpac refers to the storage in Virtual SAFE of secure entry information. With respect to employee/visitor door access, at least three scenarios may be supported as follows:

08531. Local Physical Access

0854Local office user access requested.

0855Request is processed locally.

08562. Remote Physical Access

0857Remote office user, access requested.

0858Request is processed remotely.

08593. VirtualSAFE Controlled High Security Access

0860Remote office user access requested.

0861Request is processed remotely.

0862Multiple entry levels may also be supported as follows:

08631. Entry Level 1

0864Building user requests access to local branch.

0865Building control unit validates Digital Certificate access level and authorizes access

08662. Entry Level 2

08676 Building user requests access to building Secured room.

0868Building Control Unit validates Digital Certificate access level and requests User PIN.

08693. Entry Level 3

0870Building user, requests access to building High-Secured room.

0871Building Control Unit forwards validation of the Digital Certificate from Security Company Controller.

0872User must provide PIN.

08734. Entry Level 4

0874Building user requests access to building Restricted Area.

0875Building Control Unit forwards validation of the Digital Certificate from VirtualSAFE through Security Company.

0876User must provide VirtualSAFE PIN

0877Unique Features and Advantages, To reiterate and expand, VirtualSAFE includes the following unique features and advantages:

0878VirtualSAFE includes a remote multi tiered Authentication Authority (“AA”) infrastructure for performing security functions.

0879VirtualSAFE provides for payment and initiation using a computer, network. Specifically, VirtualSAFE provides a payment and initiation system for a virtual smart card using an open network like the Internet.

0880VirtualSAFE includes highly secure dedicated servers. Built upon a “need to know virtual identity” principle of access, VirtualSAFE securely processes and stores information such that only an authorized user who is vigorously and firmly authenticated can access it. While the secure session and/or the SSL protocol authenticates and secures communications with the server, and Public Key Infrastructure (PKI) combined with third party trusted Certificate Authorities authenticates the device or computer, VirtualSAFE functions to authenticate the server, computer, and the user.

0881Using a PKI-based secure application, an enrolling applicant is prompted to store personal information to a VirtualSAFE remote repository. The depositing of information involves encrypting the information with a PKI cryptographic scheme that uses a high-speed hybrid approach, and then storing elements of it in a fragmented arrangement. Only the authenticated user can bring these pieces together again to render the information usable. In this process, the user profile becomes a virtual safety deposit box or part of a “virtual identity”, the contents of which are accessible only to VirtualSAFE for the purpose of authentication, and only in the online presence of the authorized user. The secure data is not accessible to any entity or application requesting user authentication, or to VirtualSAFE administrators.

0882User identity authentication is initiated for each individual transaction by triggering a multi-tiered algorithm that employs “virtual smart card” technology to interface with standard PKI. Authentication is only possible when the users personalized “virtual smart card” allows VirtualSAFE to access the respective “virtual identity”.

0883VirtualSAFE may be applied to credit or debit card, safe check, wire, or other forms of electronic payment processing.

0884VirtualSAFE functions as both a means of network access control and secure data storage.

0885Over a remote network, VirtualSAFE is configured as an Attribute Authentication Authority (“AAA”) and provides an access control portal to sensitive applications and data management facilities hence enabling a secure end-to-end extranet for maintaining authorization, authentication, and accountability of all external users or applications, Strong user and/or application authentication via virtual smart card directs, controls, and audits access to sensitive resources to any level of granularity in accordance with the ISO 8583 standard.

0886VirtualSAFE provides for the complete payment and fulfillment process as conducted over a communication network, and more specifically, VirtualSAFE provides a secure virtual entity that includes purchase transaction, payment transaction, and shipping and delivery components.

0887VirtualSAFE executes a complete electronic financial transaction for goods or services, which previously was transacted with credit card, cash or other payment of goods, and subsequently fulfilled separately.

0888By enabling an unprecedented level of security in online authentication, VirtualSAFE reduces the current constraints on businesses, governments, and individuals that keep them from fully leveraging the flexibility and advantages of communicating and transacting over the Internet, intranets, extranets and enterprise networks. This is achieved by VirtualSAFE's multi-tiered Attribute Authentication Authority (AM) infrastructure which includes secure means for processing electronic data and transactions over-conventional and wireless networks, authenticating users at the application level, and for network access, transactions, and communications.

0889VirtualSAFE includes a secure, dedicated server that exceeds standard sessions or Inter net security protocols such as SSL. While SSL authenticates a network server and Public Key Infrastructure (PKI) combined with third party trusted Certificate Authorities authenticate the device or PC, VirtualSAFE authenticates the user

0890VirtualSAFE provides for the payment and fulfillment processes involved in completing a financial exchange of goods or services for monetary payment.

0891VirtualSAFE includes secure encrypted digital communications, existing payment methods (i.e. cash, check, credit and debit card payment systems, wire payment and electronic funds transfer systems, etc.), and fulfillment and clearinghouse processes for delivery of goods and services. VirtualSAFE uses electronic representations of money and shopping entities which are designed to be securely housed in a digital environment that is independent from the remote shopper's computer terminal.

0892VirtualSAFE enables an enterprise to resolve many of the security, privacy, convenience and cost impediments that exist with present online commerce systems.

0893VirtualSAFE makes it easier and less risky for businesses of all sizes to engage in e-commerce.

0894VirtualSAFE makes it easier for potential online merchants of goods and services to build a website and enter the world of e-commerce.

0895VirtualSAFE allows merchants to readily obtain blanket fraud insurance.

0896VirtualSAFE registers consumers' personal data (i.e. credit card information) once and then issues a digital ID to that individual. Henceforth, the consumer does not have to enter their data online again, an obvious attraction to consumers. The data is held In a database file on a highly secure and insured server site.

0897With VirtualSAFE, all parts of a transaction are routed through a “safe” component, with private data being protected. A purchase can then be made with all interested parties (i.e. merchant, credit card issuer, bank, couriers) accessing only information that is absolutely pertinent to their roles. At the same time, VirtualSAFE ensures that it is exceedingly unlikely that anyone other than the card holder could execute the transaction. An advantage of VirtualSAFE is that online fraud may be reduced.

0898VirtualSAFE includes a remote secure repository for fulfillment data.

0899VirtualSAFE electronically emulates a wallet or, a purse customarily used for organizing money, credit cards, and other, forms of payment. Access to the instruments in the wallet or purse is restricted by an encryption and authentication processes to avoid unauthorized payments. A successful cryptographic authentication is required in order to obtain access to the wallet or purse. The authentication protocol obtains the information necessary for creating a network session granting authority to utilize an instrument, a payment holder, and a complete electronic wallet. Electronic approval results in the generation of an electronic transaction to complete the order.

0900Upon selection of a particular payment transaction by a user, a particular transaction notification will be generated based on the order. The transaction notification is processed by means of a secure connection to a transaction server. The transaction server includes elements for order fulfillment, including connectivity to: credit card issuer; acquiring bank or funds-holding institution, product or service merchant, delivery provider, and the user, or customer account.

0901With VirtualSAFE an electronic payment transaction is generated for affecting a transfer of funds from an account of the payer in the funds-holding institution to the payee. The electronic instrument includes a cryptographic digital signature of the payer, digital representations of payment instructions, the cryptographic authenticated identity of the payer, the identity of the payee, and the identity of the funds-holding institution.

0902VirtualSAFE has a secure infrastructure which includes the following components: PKI; a Redirection Link; a Secure Remote Pointer/Plug-In Application; a Virtual Identity; a Virtual Smart a Card; a VirtualSAFE Deposit Box (VSDB); an Attribute Authority; a Crypto-Engine; a Payment Processing Engine; a Risk Management Engine; a Transaction Fulfilment Mechanism; an Insurance Module; and, a Transaction Secure Repository.

0903VirtualSAFE augments the existing capabilities to process payments by simulating a physical smart card, reader, and unique identity in a remote online environment. This is accomplished without compromising existing capabilities of remote connection, browsing, and interactivity already inherent in the network, These existing capabilities are enhanced by VirtualSAFE's ability to strongly authenticate the identity of online users for the purposes of processing payments.

0904By incorporating cryptographic and networking elements, VirtualSAFE operates as an authentication layer or authentication authority between the buyer, the terminal, the merchant and payment server. Through multi-tiered authentication, the remote client is queried and authenticated to produce effective smart card emulation as if the physical card was present

0905VirtualSAFE includes an online purchase and initiation server (VirtualSAFE Authentication Authority or “VSAA”) that implements virtual smart cards VirtualSAFE complements existing, Internet payment and initiation systems by providing software emulation of smart cards and smart card readers. Other components of the existing Internet payment and initiation systems (e.g. merchant server and payment server), and the techniques for processing payment and initiation transactions, may remain the same. Use of the VSAA server is transparent to merchants on the Internet in one embodiment, a smart card and its associated card reader are emulated on a remotely located VSAA server computer, thus reducing the need for physical smart cards and smart card readers. The existing client terminal acts as a pass-through device that is transparent to a user, a merchant server, or a bank server. This improvement to Internet payment and initiation systems provides several advantages. For example, the adoption of electronic market systems may be accelerated by avoiding the cost and distribution problems associated with physical cards and card readers.

0906VirtualSAFE includes a means to address the low value (e.g. less then US $10) electronic commerce market in a rapid manner using an infrastructure that is easily scaleable,

0907By remaining integrated with the hardware-based approach to electronic commerce, VirtualSAFE facilitates the accelerated development of Internet payment and initiation systems. With VirtualSAFE, a consumer base may be created which may subsequently be transferred to the hardware approach when the required hardware is more widely available.

0908VirtualSAFE is secure in that the cryptographic functions normally performed within a smart card are performed securely within the remote VSAA server which may be under the control of an issuing bank or a trusted third party.

0909VirtualSAFE allows value to be credited to a consumer's account. This may be done quickly and easily by VirtualSAFE's VSAA server (i.e. the virtual smart card that is being emulated). A special initiation server is not necessarily required, but may be used;

0910With VirtualSAFE, by permitting the use of a virtual card to make purchases over the Internet for small dollar amounts, a merchant may very well be able to begin charging for goods and services that he provided for free in the past. VirtualSAFE is suitable for purchases of under US$ 10 while purchases of any amount may be made. VirtualSAFE allows merchants to recover costs of services not previously charged for and allows merchants to access to an existing and rapidly growing consumer base.

0911VirtualSAFE integrates into existing clearing and settlement systems such that merchants need not implement nor become familiar, with new procedures for the reconciliation of transactions.

0912With VirtualSAFE, a merchant need only make a minimal investment in time and money to take advantage of and to accept payments over the Internet, With VirtualSAFE, a merchant need not engage in the development of complex software or accounting procedures. Smaller merchants will especially benefit from VirtualSAFE, By establishing a business relationship with an acquirer and incorporating standard merchant software, a merchant is ready to begin selling goods and services from his web site. Since a virtual smart card with a stored-value application is used, the payment server and the VSAA server perform the details of and provide security for the transaction. Hence, merchants are relieved from having to control and keep track of transactions. From a merchant's point of view, the merchant knows that a consumer desires to purchase an item and that a cost has been transmitted to the consumer, thus, when the merchant receives a confirmation message, the merchant may release the item to the consumer. The merchant need not be concerned about security nor be responsible for authenticating a card nor for determining a balance on the card.

0913VirtualSAFE may facilitate frequent flyer miles or award points. A consumer may wish to access any of a variety of Web servers in order to redeem frequent flyer miles, award points, etc., that he or she has accumulated as part of a loyalty program. The consumer may have accumulated points through any of a variety of programs with airlines, restaurants, rental car companies, hotels, banks, credit or debit card issuers, telephone or other communication company, etc. Often the consumer wishes to redeem these points to receive free airline tickets, meals, car rental, overnight stays, prizes, awards, discounts, or other benefits. It is important to the airline (or other company) to be able to authenticate that the person trying to redeem points is the actual person who owns the points. By accessing a Web server associated with the particular program, VirtualSAFE allows the consumer to use a virtual card in the VSAA server to authenticate that he or she is the true owner of the points and to receive benefits from the program.

0914VirtualSAFE allows consumers to conveniently initiate value on virtual cards from any suitable device via an open network such as the Internet. A consumer may use any suitable a computer at the home, office, or elsewhere in order to connect to his bank or other, financial institution. Using appropriate message integrity, value is transferred from the bank to the consumer's virtual card. At the same time, the corresponding value is transferred from the bank to the virtual card issuer through existing networks for later settlement with a merchant from whom the consumer purchases goods or services. This embodiment makes use of an existing clearing and settlement system for eventual settlement of the transaction between the merchant and the card issuer. The invention allows consumers to conveniently initiate value on virtual cards while maintaining a high level of security. From the consumer's perspective, this initiation feature operates in a fashion similar to the initiation of a physical card at an ATM machine, except that the consumer need not insert cash or an additional debit or credit card, nor is the consumer, required to travel to a bank. The initiation functionality is distributed across the Internet between the VSAA server, a bank server holding the consumers account, and an initiation server with a security module. All of these entities may be physically remote from one another with router functionality being provided by the Internet.

0915VirtualSAFE may use existing clearing and settlement systems to reconcile transactions and to pay the appropriate parties once the value has been spent.

0916VirtualSAFE includes the integration of at least four separate networks, namely, “VIRCON”, “VIRSBUS”, “VIRMBUSS”, and “VIRLBUS”. These networks are defined as follows: VIRCON is a virtual contractors network; VIRSBUS is a virtual small business network; VIRMBUS is a virtual medium-sized business network; and, VIRLBUS is a virtual large business network. As members of one these networks, contractors will have access and will be able to run all of their business affairs via VirtualSAFE. For example, contractors may login to VirtualSAFE and download all of their companys' documents (e.g. purchase orders, invoices, change orders, material order forms, outstanding bills, etc.) and have all of their e-commerce transactions handled right at their customers' sites. For materials that they require, emails will be sent to their suppliers. For, invoices that require payment, the opportunity for their immediate payment exists through Virtual SAFE.

0917VirtualSAFE includes a check processing module, namely, “SAFEcheck”. With SAFEcheck, check printers are installed in participating banks or other financial institutions enabling employees of participating corporate members of VirtualSAFE to print out their paychecks at these locations SAFEcheck alleviates many of the problems associated with checks being lost in the mail.

0918VirtualSAFE supports multiple languages and multiple currencies VirtualSAFE protects individual privacy without impeding legitimate inquiries by law enforcement and government agencies by providing transactional anonymity with an audit trail. In addition, allowance is included for non-repudiated transactions which emulate cash transactions.

0919VirtualSAFE does not require the maintenance of extensive records, is relatively anonymous for the consumer, can detect fraud, and can adequately deal with micro payments to individual merchants.

0920Although preferred embodiments of the invention have been described herein, it will be understood by those skilled in the art that variations may be made thereto without departing from the spirit of the invention or the scope of the appended claims.