Method and apparatus for securing credit card transactions

A computer for authorizing a credit card transaction comprising:

• a memory means for storing data;
• a de-encryption algorithm stored in said computer for de-encrypting a verification number produced by a credit card using an encryption algorithm;
• a first transaction sequence number stored in said memory means, said first transaction sequence number corresponding to a second transaction sequence number stored in a credit card;
• a processing means for processing said de-encryption algorithm and the verification number to produce a computed transaction sequence number, said processing means also being for testing the correspondence of the computed said processing means. number with said transaction sequence number to determine whether a given credit card transaction is to be authorized;
• and
• said processing means changes said first transaction sequence number, provided the given credit card transaction is authorized, and stores the changed first transaction sequence number in said memory means.

A system for verifying a credit card transaction comprising:

• a credit card including:
• a first memory means for storing data;
• an encryption algorithm stored in said credit card for encrypting data;
• a first transaction sequence number stored in said memory means;
• a display means;
• a first processing means for processing said encryption algorithm and said first transaction sequence number to produce a verification number for visual display in said display means, said first processing means changes said first transaction sequence number, and stores the changed first transaction sequence number in said first memory means;
• and
• a computer means including:
• a second memory means for storing data;
• a de-encryption algorithm stored in said computer, said de-encryption algorithm being the complement of said encryption algorithm;
• a second transaction sequence number stored in said second memory means;
• and
• a second processing means for processing said de-encryption algorithm and said verification number to produce a computed transaction sequence number, said second processing means also being for testing the correspondence of said computed transaction sequence number with said second transaction sequence number, and said second processing means changes said second transaction sequence number, provided the given credit card transaction is authorized, and stores the changed second transaction sequence number in said second memory means.

A method of authorizing a credit card transaction comprising the steps of:

• requiring the provision of identification information to an authorization computer;
• using the identification information to access a file in the computer containing a de-encryption algorithm and a first transaction sequence number, the de-encryption algorithm being complementary to an encryption algorithm stored in a credit card, and the first transaction sequence number corresponding to a second transaction sequence number stored in the credit card;
• requiring the provision of a verification number, produced by the credit card using the second transaction sequence number and the encryption algorithm;
• processing the verification number with a processing means in the computer to produce a computed transaction sequence number;
• testing the correspondence of the computed transaction sequence number to the first transaction sequence number to determine whether a given credit card transaction is authorized;
• and
• changing the first transaction sequence number if the given credit card transaction is authorized.