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Smart Money Concept.

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Presentation on theme: "Smart Money Concept."— Presentation transcript:

1 Smart Money Concept

2 Discussion Items Smart Money Concept Operations and Settlement Center
Stored Value Cards Retail Deposit Operations ATM Operations ACH Deposit Operations Coupon Cards Loyalty Cards Offline Cash Cards Focusing on the unbanked portion of America

3 The Concept Bank A Bank B Merchant X Merchant Y Supplier M Supplier N
Service Center Kiosk Point of Sale ATM Debit Card Coupon Card Loyalty Card Offline Cash Card

4 Service Center

5 High Level Components Architectural Approach Cash Withdrawals Deposits
Universal Card Universal Card Universal Card Universal Card Cash Withdrawals Deposits Smart Card Purchases Image Server Universal Card Extracts Coupon Loading Transactions University Bank’s Systems Merchant’s POS Systems Supplier’s Coupon Redemption Systems ACH

6 The Image System (Hosted Server)
Image Server This would be produced by Integrated Architectures Universal Card “Image Server” Security System Management Input Daemon SVC Mgt ATM Control Deposit Ctl ACH Deposit Ctl Coupon Ctl Loyalty Card Ctl Off-Line Card Ctl Log Manager Audit Logs Q Account Strip Files Micropayment Balance Management Transaction History University Bank Authoritative Systems

7 Stored Value Card Management
Withdraw money whenever needed Deposit money whenever convenient Universal Card Signup for Universal Card at deposit partner retail merchant establishments Image Server Universal Card Buy merchandise off-line using the card Log Entry (If genuine cash is deposited, the participation of University Bank makes the transaction official even if the use of the bank is transparent.) Reconciliation Notification (Smaller merchants deposit receipts at deposit partner retail establishments just like everyone else.) Audit Log X Bank’s Authoritative Records

8 Trusted Deposit Transaction
Deposit money whenever convenient Image Server Log Entry Settlement Notification Audit Log X Bank’s Authoritative System

9 ATM Transaction Withdraw money whenever needed Image Server Log
Entry Settlement Notification Audit Log X Bank’s Authoritative System

10 ACH Deposit Transaction
Deposit money directly from payroll or entitlement system. ACH Image Server Log Entry Settlement Notification Audit Log X Bank’s Authoritative System

11 Coupon Clearinghouse (Smart Money)

12 Coupon Clearing 2 1 3 5 7 4 6 Merchant POS Server Proof of Purchase
Universal Card 2 1 Universal Card Merchant POS Server Proof of Purchase Coupon Loading Image Server Smart Money POS Server Coupon Purchases 3 Smart Money Bank Account 5 Supplier Coupon System 7 ACH 4 Supplier’s Bank Account Smart Money Settlement Account ACH Merchant Bank Account 6

13 Loyalty Card (Smart Card)

14 Loyalty Card Management
Universal Card Universal Card Universal Card Buy merchandise using the card The customer can see the loyalty points and transactions any time they want at a kiosk. Signup for Universal Card at deposit partner retail merchant establishments Image Server (The loyalty points are in effect a discount coupon issued by the merchant himself.) X Merchant’s Reconciliation System

15 Offline Cash Card (a la Net1)

16 The Off-Line Smart Card Concept
The Bank is the holder of the micropayment account and the actual cash. Bank Optional Transaction History Credits Smart Card Digital Certificate The cardholder draws off credits for spending money onto the smart card.

17 The Way It Is Implemented
Bank Bank Image Server The clearinghouse handles the store and forward to and from the POS devices. Clearinghouse Record of Usage & Settlements Credits The merchants operate the POS devices to connect smart cards to the clearinghouse. The cardholder can purchase using credits off-line. Smart Card Smart Card The merchant settles online with the Bank via the clearinghouse.

18 Concepts The participating bank holds the real money… all else is just a payment delivery mechanism. The smart card holds the following: Credentials of the cardholder (ID, fingerprint, etc.) Privileges Credits Recent transaction history The credits can be stored in different “buckets” The credits may be in different types: Money Coupons Loyalty points

19 The Different Parties Depositor Purchaser Government (Recurring
Payments) Government (Micro Loans) Depositor Digital Certificate Digital Certificate “Virtual Bank” PC Bank Digital Certificate Smart Card Digital Certificate Manufacturers Smart Money Clearing Digital Certificate Merchant Distributor Employer Utility Company Medical Management Insurance Digital Certificate Digital Certificate Digital Certificate Digital Certificate Digital Certificate Digital Certificate Digital Certificate Purchaser

20 The Basic Transaction Flow
Company Depositor Bank Bank Bank Image Server Bank Image Server Deposits Clearinghouse Clearinghouse Purchases POS Device? POS Device Smart Card POS Device Smart Card

21 Clearinghouse Manufactures POS Devices
Manufacture Device Load Device ID & Sign Insert Jini & Sign Manufacturer Develops Software Applet Initializer Certifies Software Applet Signs & Stores Applet In Test Lib. Put Devices Into Inventory Application Developer Tests Applet Signs & Stores In Dist. Lib. Clearinghouse Warehouse Distribution Clearinghouse Certification At this point, the devices are in the warehouse, but they are not activated, and cannot yet be used.

22 Clearinghouse Manufactures Cards
Manufacture Device Load Device ID & Sign Insert Jini & Sign Manufacturer Develops Software Applet Initializer Smart Card Certifies Software Applet Put Devices Into Inventory Signs & Stores Applet In Test Lib. Application Developer Tests Applet Signs & Stores In Dist. Lib. Clearinghouse Warehouse Distribution Clearinghouse Certification At this point, the devices are in the warehouse, but they are not activated, and cannot yet be used.

23 Bank Acquires Merchants
Bank Markets Service Merchant Signs Agreement Banker Site Survey Merchant Issue & Install POS Device Merchant POS Device Activate POS Device Clearinghouse Install Team Issue & Install POS Device Smart Card Merchant Smart Card Activate POS Device

24 Customer Registers for Smart Card
Merchant Markets Smart Card Customer Buys Smart Card Merchant Customer signs Contract? Card Activation Merchant POS Device Smart Card Merchant Smart Card Smart Card Send Registration to Clearinghouse Clearinghouse DB Send Registration to Bank Bank Image DB

25 Customer Loads Card With Cash
Customer Gives Cash to Merchant Merchant Merchant signs Transaction Merchant POS Device Smart Card Send Transactions to Clearinghouse Merchant Smart Card Smart Card Clearinghouse DB Send Transaction to Bank Bank Image DB

26 Customer Makes Purchase with Smart Card
Customer Buys Merchandise Merchant Customer signs Transaction? Merchant POS Device Smart Card Send Transactions to Clearinghouse Merchant Smart Card Smart Card Clearinghouse DB Send Registration to Bank Bank Image DB

27 Basic Milking Operation
Customer signs Transaction? Merchant Send Batch to Clearinghouse Clearinghouse DB Merchant POS Device Send Transactions to Bank Bank Image DB Merchant Smart Card Smart Card Send Settlements to Clearinghouse Clearinghouse DB Send Settlements to Merchant

28 Government Party Deposit
Citizen Registers for Benefit Payment Sent To Bank Recurring Payment System Bank Image DB Payment Sent to Clearinghouse Citizen Visits Payment Agent Clearinghouse DB Payment Agent POS Device Secure Session Established w/ Chip Payment Agent Smart Card Real-Time Payment Smart Card Smart Card The Payment Agent POS Device is merely and authorized conduit… and plays no part in the transaction between the clearinghouse and the smart card other than the fee for providing the connection.

29 Basic Third Party Deposit
Depositor Customer Gives Depositor Ext ID Deposit Sent To Bank Bank Image DB Credit Sent to Clearinghouse Citizen Visits Payment Agent Clearinghouse DB Payment Agent POS Device Secure Session Established w/ Chip Payment Agent Smart Card Real-Time Credit Smart Card Smart Card The Payment Agent POS Device is merely and authorized conduit… and plays no part in the transaction between the clearinghouse and the smart card other than the fee for providing the connection.

30

31 Security Trust Network Is Established
Root Authority Service Provider Authorization Server CA Initialization Server CA Device Server CA Applet Certifying CA Application Development CA Manufacturer Authorization Servers Initialization Servers Device Servers Applet Certifying Agent Application Development Kit Dist. Codes Registration Branding Secure Processor Code Server Data: * Keys * Certificates * Other Data Certified Application Development Supplier Application Provider These applets control the device capabilities Contract Applets Secure OS Smart Card

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