System and method for customers initiated payment transaction using customer's mobile device and card

A system for a customer initiated payment transaction, comprising:

• a mobile device of a customer;
• a card of the customer having information on integrated loyalty points;
• a merchant device subscribed to accept integrated loyalty points as a payment method wherein the merchant has merchant information and payment information;
• and
• a server having a database which stores the merchant information,
• wherein the information on the integrated loyalty points includes customer identification and the amount of the integrated loyalty points owned by the customer,
• wherein the merchant information includes a merchant code and the payment information includes a payment amount,
• wherein the mobile device is operative to process a payment transaction using the integrated loyalty points of the customer by the steps of:
• receiving the merchant information and the payment information;
• activating the mobile device, for processing the payment transaction, by the card;
• creating a payment authorization request using the information on the integrated loyalty points, the merchant information, and the payment information, and sending the payment authorization request to an acquirer affiliated with the customer for the integrated loyalty points;
• and
• receiving a result of the payment authorization request from the acquirer,
• wherein the card is a multi-function device (MFD) card or a near field communication (NFC) card having an antenna for near field communication (NFC), and the mobile device includes an NFC sensor,
• wherein the mobile device is activated for processing the payment transaction via NFC between the card and the mobile device, and wherein the mobile device receives the information on the integrated loyalty points from the card via NFC between the card and the mobile device,
• wherein the step of activating the mobile device, for processing the payment transaction, by the card includes transferring a chip serial number or a card serial number of the card from the card to the mobile device via NFC or Bluetooth Light Energy (BLE) such that the mobile device only becomes activated for processing the card payment if the chip serial number or the card serial number matches a chip serial number or a card serial number stored in the mobile device, wherein the card information is deleted from the mobile device after the transaction,
• wherein the card information from the card of the customer is not transferred to the merchant, and
• wherein the mobile device obtains geolocation data of the merchant device using a global positioning sensor of the mobile device and sends the geolocation data to the server, and in response, the server searches for and retrieves the merchant information corresponding to the geolocation data and sends the merchant information to the mobile device.