Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
2000-10-31
2004-12-07
Millin, Vincent (Department: 3624)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
C705S031000, C705S038000
Reexamination Certificate
active
06829590
ABSTRACT:
BACKGROUND
A risk management system has been previously described whereby an e-commerce participant can have relevant sales information, such as requested purchase price, current bid, highest bid, etc. displayed in the currency local to that e-commerce participant. It has also been provided that the information displayed is formulated using a base currency, and an exchange price relative to that base currency. It will be known by those in the art that should either the base currency or the exchange price fluctuate, then the price information displayed in local currency to the e-commerce participant will also fluctuate. If the price information is displayed in real time, such fluctuations could cause the displayed information to change often, possibly continually. Such a display is not conducive to completing business transactions. Frequent fluctuation in the price displays may be disconcerting for the e-commerce participant, and may make it difficult for the e-commerce participant to determine which of the various options is the most favorable. Thus, it is desirable to have a risk management system that eliminates at least a portion of the price fluctuations.
International e-commerce is forecasted to substantially increase in the immediate future. It is possible that e-commerce will account for almost 10% of global sales of goods and services within the next several years. Business to business (B2B) transactions will most likely constitute the majority of that figure. One important benefit of B2B e-commerce is the degree to which it expands a company's “potential” client base to markets across the globe. Consequently, international or global e-commerce may ultimately account for a majority of e-commerce transactions.
In the evolving e-commerce market, few transaction mediums have considered the large currency transactions associated with this new form of international trade, let alone ways of hedging the foreign exchange (FX) risk associated with such transactions. As B2B commerce evolves over the next several years, both regional e-business communities and existing cross-border B2B players will capitalize on the opportunity to dramatically increase their client base and revenues by expanding into global markets. While issues such as security, trade management, and taxation have been addressed by B2B players as they begin their international initiatives, foreign exchange has largely been ignored. This is despite the fact that FX market volatility can markedly change the price of goods sold on the internet, alter the terms of trade agreements, and even be the determining factor as to whether a transaction occurs between two parties.
Increased use of the Internet and other dispersed computer communications networks by commerce participants has also resulted in an increase in the number of transaction facilitators operating on such networks. Transaction facilitators can assist commerce participants in finding and negotiating with other commerce participants such that transactions can be completed. Transaction facilitators can take many forms, such as an internet portal, or even a traditional brick and mortar establishment.
Generally, the transaction facilitator provides a medium through which a purchaser or a seller can make its goods and services known to a potential seller and purchaser, respectively. For example, a facilitator may be a website where a seller posts information regarding their product, including price information. Interested purchasers may then visit the website and view the product and sales information for multiple sellers. From this information, the purchaser may complete the transaction with the seller which has the most favorable terms. It is known that the converse situation can similarly occur whereby the purchaser posts information related to the product sought and terms of purchase, and potential seller's review the bid information to select the transaction with the most favorable terms. An example of such a portal is EBay®, whereby potential buyers and sellers post information on the Ebay® website, and the commerce participants are able to determine which option is the most desirable. Another example would include a business to business (B2B) online exchange. An e-commerce transaction facilitator provides a marketplace where a potential purchaser and a potential seller can negotiate and consummate an e-commerce transaction.
It is known for a transaction facilitator to obtain payment from one of the commerce participants each time a transaction is completed. Therefore, it is beneficial to the transaction facilitator to complete as many transactions as possible. Thus, transaction facilitators want to provide the commerce participants with all the information they need to complete the transaction.
Pricing and other financial information can be a key factor in the completion of a transaction. It is beneficial for the transaction facilitator to be able to provide price and other information to each of the commerce participants. In particular, it is beneficial for the transaction facilitator to provide price and other financial information to the commerce participants in a currency local to the commerce participants. As disclosed in another embodiment of this invention, such information can then be displayed either individually or collectively, such that the commerce participant can select the most beneficial transaction.
Providing pricing information in the local currency of the commerce participants can be difficult if the commerce participants engage in commerce using different currency. For example, if the seller engages in commerce in a first currency, the purchaser in a second currency, and the transaction facilitator in a third currency, the transaction facilitator must be able to provide the relevant information in all three currencies. It will be appreciated that given the number of currencies used in the global economy, most transaction facilitators are ill-equipped to provide such financial information and services.
Business to customer (B2C) and B2B commerce, including regional e-business communities and existing cross-border players will capitalize on the opportunity to dramatically increase their client base and revenues by expanding into global markets. While issues such as security, trade management, and taxation have been addressed by e-commerce players in their international initiatives, foreign exchange has largely not been satisfactorily addressed. FX market volatility can markedly change the price of goods sold on the internet, alter the terms of trade agreements, and even be the determining factor in whether a transaction occurs between two parties. E-commerce sites interacting internationally would benefit by transparently embedding the inherent foreign exchange conversion into all their commercial transactions. What is needed is a Foreign Exchange (FX) pricing platform which will enable sites to show prices to each participant in the participant's local currency. When a transaction is executed, the necessary foreign exchange trade should automatically be conducted so that both a purchaser and a seller transact in their own local currencies.
It would be beneficial to have a risk management system which can provide price and other financial information in the local currencies for each of the purchaser, seller and transaction facilitator. In particular, the risk management system should be able to perform risk management services when a first commerce participant uses a first currency, a second commerce participant uses a second currency, and a transaction facilitator uses a third currency. It would further be beneficial to provide a system whereby the commerce participants and the transaction facilitator can view the financial information in a currency local to one or more of the other participants in the transaction.
SUMMARY
Accordingly, the present invention contemplates a risk management system for facilitating an e-commerce transaction wherein the participants to the transaction engage in commerce using different cur
Anagnostopoulos Effie Konstantine
Godfrey John
Greener Sharon
Gunewardena Mel
Higgins Mark
Clifford Chance (US) LLP
Goldman Sachs & Co.
Kincart Joseph P.
Kyle Charles R.
Millin Vincent
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