System and method for a self-calculating token vault

A method for electronic payment, comprising:

• generating a temporary token on a server based on an original PAN by using a unique encryption key and one or more input parameters, wherein said one or more input parameters include an original PIN;
• and
• transmitting the temporary token from the server to a portable electronic device via a network interface;
• receiving at the server a decrypted token from the portable electronic device in connection with a given transaction at a point-of-sale device, wherein the decrypted token was generated by the portable electronic device by decrypting the temporary token using a unique decryption key and said one or more input parameters;
• validating the decrypted token at the server using the unique encryption key and said one or more input parameters and verifying that the original PIN was correctly entered into the portable electronic device in connection with the given transaction;
• and
• returning a validation message from the server to the point-of-sale device.

A system for electronic payment, comprising:

• a portable electronic device including an electromagnetic communication device, a client-side processor, and a client-side memory accessible by the client-side processor storing computer readable instructions that when executed by the client-side processor causes the portable electronic device to:
• receive a temporary token from a server via a network interface and store it in a digital memory coupled to the client-side processor;
• in connection with a given transaction at a point-of-sale device, accept user input of a PIN, and decrypt the temporary token using a unique decryption key and one or more input parameters, wherein said one or more input parameters include the PIN;
• and
• present the decrypted token to the point-of-sale device for the given transaction;
• and
• a server including the network interface, a server-side processor, and a server-side memory accessible by the server-side processor storing an original PAN in association with a unique encryption key associated with the unique decryption key, and the PIN, the server-side memory also storing computer readable instructions that when executed by the server-side processor causes the server to
• generate the temporary token based on the original PAN by using the unique encryption key and said one or more input parameters;
• transmit the temporary token from the server to the portable electronic device via the network interface;
• receive the decrypted token from the portable electronic device in connection with the given transaction at the point-of-sale device;
• validate the decrypted token, using the unique encryption key and said one or more input parameters, if the decrypted token was generated by the portable electronic device by decrypting the temporary token using the unique decryption key and said one or more input parameters and verify that the PIN was correctly entered into the portable electronic device in connection with the given transaction;
• and
• return a validation message to the point-of-sale device.