Automated payment card fraud detection and location

A method for preventing payment card fraud, the method comprising:

• issuing to users a payment card able to internally generate a new account number on a magnetic stripe each time such is to be used;
• connecting a merchant card reader or ATM to read said magnetic stripe on said payment card, and to report said new account number when a user initiates a merchant transaction;
• analyzing a report from said merchant card reader to determine if said new account number is valid or an attempt at fraud as evidenced by a second attempt to use the same account number in a different subsequent transaction;
• logging into a database a merchant identification data associated with each said report from said merchant card reader;
• deciding whether to authorize said merchant transaction based on a validity criteria associated with said new account number;
• activating a timer on each said payment card after a card transaction, and causing a next transaction number to be skipped resetting a new count when such timer times-out;
• and
• preventing copies of magstripe data from being accepted in a decision making process to authorize the transactions after a fixed period of time.

A payment card system, comprising:

• a payment card with a magnetic stripe with a data track and means to communicate data track information to a payment processing server through a magnetic device to a merchant or ATM magnetic card reader;
• a sequence of next valid values permanently disposed in crypto-tables within said payment cards;
• a microcontroller included in said payment card to internally fetch a sequence of next valid values said crypto-table to include as a dynamic portion of a new account number for automatic presentation on said magnetic stripe and without user intervention each time the payment card is used in a merchant transaction;
• a payment processing server configured to analyze a report from said merchant card reader to determine if said new account number includes an expected next valid value in said crypto-table that was loaded in that particular payment card during manufacturing and before distribution its user;
• a database of merchant identification data associated with each said report from said magnetic card reader;
• and
• a program for deciding whether to authorize said merchant transaction based on a validity criteria associated with said new account number;
• wherein, the user is not provided an input to make choices or selections into their payment card, and the payment card itself does not employ a card number generator algorithm to calculate said new account number.

A business model for reducing credit card fraud, comprising:

• before distributing a plurality of payment cards, and during their manufacture, cryptographically generating a series of unique values from user account access numbers and storing them as sets in corresponding private crypto-tables disposed in each of said plurality of credit cards;
• deploying said plurality of credit cards in the retail community that each can modify its own magnetic stripe with values obtained from said private crypto-tables to result in a complete magnetically recorded transaction number that can only be authorized by a payment server once;
• using a fraud detection program on said payment server that can compute from said user account access numbers a next set of unique values that would have been validly stored in each of said crypto-tables;
• and
• connecting a report service to the fraud detection program to detect and announce the merchant location of a skimming event and attempt at fraud.