Method and apparatus for secure message transmission for use in electronic funds transfer systems

A secure message transmission method for use in an Electronic Funds Transfer system wherein a Host entity (H) must be assured that a Person (P) and a Retailer (R) agree on the details of an Electronic Funds Transfer (EFT) transaction that is to be performed by H, said method comprising, P and R agreeing on and cooperatively forming a common transaction message (TM) with a portable transaction terminal unit in the possession and under complete control of P and with a point of sale terminal under the control of R, said agreed transaction message including time and data information to be utilized in subsequent validation operations, both P and R storing their own respective copies of said agreed upon transaction message in their own terminal equipment, P encrypting said common transaction message (TM) under his Personal encryption key K.sub.P to form a singly encrypted message, (TM, K.sub.p) and transferring same to R, R further encrypting said received message under his key K.sub.R to form a doubly encrypted message ((TM, K.sub.P), K.sub.R)) and transmitting same to the Host, as a first message segment, P next transmitting the common transaction message of TM to R in the clear, R comparing said common transaction message of TM to R with the previously agreed upon transaction message stored in his terminal and if there is agreement R encrypting the common message of TM under his key K.sub.R to form a second message segment (TM, K.sub.R) and R transmitting this message segment to H, R also sending to H together with said first and second message segments a third message segment containing P's identification data singly encrypted under R's key K.sub.R and R's identification number in the clear, H, upon receipt of said three message segments first accessing K.sub.R using R's identification number, and then decrypting the message segment containing P's identification number utilizing the accessed key K.sub.R, accessing P's encryption key K.sub.P using P's identification number, decrypting the singly encrypted message (TM, K.sub.P) and the doubly encrypted message ((TM, K.sub.P), K.sub.R) using said two keys K.sub.R and K.sub.P respectively and comparing the two common transaction message portions of TM contained in said two message segments and, if equal, approving said transaction.

A secure message transmission apparatus for use in an electronic funds transfer system wherein it is required that a Host (H) be reasonably guaranteed that a Person (P) and a Retailer (R) agree on the transaction details before the funds transfer takes place, said apparatus comprising in combination:

• a terminal under control of R including;
• a keyboard for entering transaction data by R, a display for visually observing and checking data entered, secure storage means for storing part of all of a unique encryption key K.sub.R, a key-controlled block-cipher encryption unit operable under the key K.sub.R for encrypting transaction messages to be sent to H, clock means for inserting time and date data into the transaction message and means for transmitting R's identification number to H,
• a portable transaction terminal device uniquely under the control of P, adaptable for interfacing with R's terminal in a data exchange relationship, said device including;
• display means for displaying predetermined transaction message data to be sent to H, keyboard means for selectively entering data and commands into the device, storage means for storing account data unique to P, secure storage means for storing P's unique encryption key K.sub.P, and a key-controlled block-cipher cryptographic unit identical to or compatible with that in R's terminal for encrypting transaction data under control of said stored key K.sub.P, a Host computer (H's CPU) connected to R's terminal adapted to receive encrypted messages therefrom, H's CPU including a key-controlled block-cipher cryptographic unit identical to or compatible with those in R's terminal and P's portable terminal device for decrypting messages received from R, secure storage means for storing the unique encryption keys K.sub.X 's of all Retailers (R) using the system and of all the Persons (P) using the system, means to access specific encryption keys from said secure storage means utilizing special identification data transmitted to H from R together with the transaction message,
• said combination further including control means in P's and R's terminals for entering common transaction message data and for displaying same on the display means in both terminals for approval by P and R and, if satisfactory, means in R's terminal for encrypting said common transaction data message under R's encryption key K.sub.R and sending same to H, control means in P's terminal device for first encrypting said common transaction data message under P's encryption K.sub.P to form a message (TM, K.sub.P) and transmitting same to R, and means in R's terminal for further encrypting the singly encrypted message from P to form a message ((T.sub.M, K.sub.P) K.sub.R) and sending same to H, means in R's terminal for transmitting to H both P's and R's identification data, means in H's CPU for extracting the two keys, K.sub.P and K.sub.R from the secure storage means, utilizing the two identification data received from R, and first decrypting the two transaction messages received from R, encrypted under the key K.sub.R and next decrypting that portion of the transaction message which was additionally encrypted under the key K.sub.P and comparing the common portions of the transaction messages for identity, and if identical performing the requested transaction.