Registers – Systems controlled by data bearing records
Reexamination Certificate
2001-11-14
2004-06-22
Lee, Michael G. (Department: 2876)
Registers
Systems controlled by data bearing records
C235S379000, C235S381000, C705S044000
Reexamination Certificate
active
06752313
ABSTRACT:
BACKGROUND OF THE INVENTION
The present invention relates to a method and system for rapidly establishing credit card merchant accounts (MAs) whereby merchants can begin processing credit card transactions or exchanging other data pertinent to such transactions nearly instantaneously after applying for a merchant account. Once the MAs are established, credit card transactions may be processed in any sales environment, including sales over the Internet and sales at conventional bricks-and-mortar establishments.
Electronic commerce over global computer networks such as the Internet is expanding rapidly. It has been estimated that worldwide Internet commerce will reach $1.44 trillion by the year 2003. The number of so-called “.com” businesses which sell their wares over the Internet is exploding. In fact, software has been developed that allows a start-up e-commerce merchant to establish an Internet presence, display products and prices and generally conduct business over the Internet in less than an hour. Also, Internet merchant host services have been established which provide the infrastructure for supporting on-line businesses so that the e-commerce merchant need not even supply the computer hardware and server software for establishing an electronic storefront.
One impediment to quickly establishing an on-line business presence is establishing a method of receiving payment for the goods or services being offered for sale over the Internet. Because the parties to Internet transactions are remote from one another, tendering cash or offering checks and other traditional forms of payment is generally impractical. Credit card transactions therefore have become the de facto standard method of tendering payment over the Internet. But, before an on-line merchant can begin accepting credit card payments, the merchant must first establish a credit card merchant account (MA). Of course, the same applies to merchants operating out of conventional bricks-and-mortar establishments.
Each MA includes a merchant identification number (MID), a terminal identification number (TID), and a gateway identification number (GID). The MID uniquely identifies the merchant, and the TID uniquely identifies the merchant location where a particular transaction occurs. In general, a merchant will have but a single MID, but may have multiple TIDs if the merchant is doing business from multiple locations, including any combination of different Internet addresses and bricks-and-mortar sites. Merchants doing business exclusively over the Internet or exclusively at a single bricks-and-mortar location, however, will likely have but a single TID. The GID identifies an Internet gateway between the public Internet and a private network of banks, independent sales organizations (ISOs), acquirer banks (ACQs) and processing centers for processing credit card transactions.
Using traditional methods, applying for and establishing an MA can take from a few days to several weeks. This is a significant burden to the start-up on-line merchant. During the period when the merchant is waiting for the MA the merchant is effectively prevented from conducting business, possibly losing revenue that may be necessary for the business to survive and grow. Thus, there is an acute need for a method of establishing credit card processing MAs for on-line merchants. By the same token, conventional bricks-and-mortar merchants will also benefit from an expedited method for establishing credit card MAs. The present invention provides such a method, as well as a system for implementing the inventive method.
Before describing the method and system of the present invention, however, it is first necessary to describe the on-line credit card transaction process and the elements necessary to establish an MA.
FIG. 1
shows a schematic diagram of a typical set-up for processing credit card transactions over the Internet. An on-line merchant is shown at
12
. Merchant
12
may be independently operating its own web server, supporting its web presence with its own hardware and software, or the merchant may be setting up its online business through a merchant host server
14
. (Since the merchant host server
14
is optional, it is shown in dashed lines in the figure.) The Internet is shown as an amorphous cloud
22
of interconnected networks and packet switched routers and computers, all implementing standard Internet protocols as is known in the art.
Also shown connected to the Internet
22
are an on-line customer
18
, an independent sales organization (ISO)
20
or, alternatively, acquirer bank (ACQ)
21
and a payment gateway
16
. The payment gateway
16
is in turn connected to a credit card processing front-end system or authorization center
24
which is connected to a back-end settlement network
26
. The merchant's acquiring bank
28
(which may be different from ACQ
21
but often will be the same entity), a credit card issuing bank
30
, and the ISO
20
are connected through the back-end settlement network
26
.
During the course of an Internet transaction, a payment page is sent from the merchant
12
to the on-line customer
18
and displayed by the customer's Internet browser. The customer enters his or her credit card number, the expiration date of the card, and the purchase amount in the designated fields of the payment page and selects a transmit function typically activated by mouse clicking on a software button displayed on the payment page. The MID, TID and GID associated with the merchant's MA are embedded within the instructions for displaying the payment page.
The browser transmit function sends the transaction data, preferably through a secure socket layer (SSL), including the credit card number, expiration date, the MID and the TID, to an Internet gateway
16
designated by the GID embedded within the payment page. The gateway directs the transaction to front-end processing center
24
, also identified by the GID. The front-end processing center verifies that the card has not been reported lost or stolen, that the transaction is within the customer's credit limit, and may perform other security checks. Typically, this is accomplished by contacting a transaction authorization agent associated with the brand of the credit card, for example, VISA, Mastercard, American Express, Discover, and the like. Provided that all of the data and security checks pass muster, the transaction is approved. A message, usually including an approval code, is sent back to the merchant through the payment gateway
16
and over the Internet
22
. At this point the transaction is considered to be authorized (or “captured”).
Once the transaction data reaches the front-end system
24
, the transaction proceeds in the conventional manner. The front-end processing center accumulates transactions throughout each business day. At the end of each day the front-end processing center batches the captured transactions to the various acquiring banks associated with the merchants whose transaction have been accumulated. The proper acquiring bank for a particular transaction may be identified from the MID and TID associated with the transaction.
Once the acquiring bank receives the batched transactions, the bank performs an automated clearinghouse function on the transactions (ACH). As part of the ACH, the acquiring bank batches transaction files to each of the card issuing banks whose credit card holders have entered transactions captured by the front-end processing center and forwarded to the acquiring bank. The issuing banks post the transactions to their cardholders' accounts to be listed on the cardholders' monthly statements. The issuing bank then transfers funds covering the transactions to the acquiring bank. The ACH function further sends transaction files to the ISOs or ACQs responsible for establishing the MAs with the merchants whose transactions are being cleared. The ISOs and ACQs maintain risk management files which include underwriting and transaction approval guidelines. If various transactions do not meet the tr
Caviles Allen
Gramigna Kristen
Mondia Nicole
Rante John
Lee Michael G.
Michael & Best & Friedrich LLP
Nguyen Kimberly
Online Data Corp.
LandOfFree
Method and system for establishing a credit card transaction... does not yet have a rating. At this time, there are no reviews or comments for this patent.
If you have personal experience with Method and system for establishing a credit card transaction..., we encourage you to share that experience with our LandOfFree.com community. Your opinion is very important and Method and system for establishing a credit card transaction... will most certainly appreciate the feedback.
Profile ID: LFUS-PAI-O-3327898