Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Patent
1997-02-26
1999-12-07
MacDonald, Allen R.
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
705 38, 705 39, G06F 1760
Patent
active
059999195
ABSTRACT:
Existing software proposals for electronic payments can be divided into "on-line" schemes which require participation of a trusted party (the bank) in every transaction and are secure against overspending, and "off-line" schemes which do not require a third party and guarantee only that overspending is detected when vendors submit their transaction records to the bank (usually at the end of the day). A new "hybrid" scheme is proposed which combines the advantages of both "on-line" and "off-line" electronic payment schemes. It allows for control of overspending at a cost of only a modest increase in communication compared to the off-line schemes. The protocol is based on probabilistic polling. During each transaction, with some small probability, the vendor forwards information about this transaction to the bank. This enables the bank to maintain an accurate approximation of a customer's spending. The frequency of polling messages is related to the monetary value of transactions and the amount of overspending the bank is willing to risk. For transactions of high monetary value, the cost of polling approaches that of the on-line schemes, but for micropayments, the cost of polling is a small increase over the traffic incurred by the off-line schemes.
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Jarecki Stanislaw
Odlyzko Andrew M.
AT&T
Irshadullah M.
MacDonald Allen R.
Ryan William
Williams Karin L.
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