Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
1999-04-07
2001-01-09
Swann, Tod R. (Department: 2767)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
C705S039000, C705S042000
Reexamination Certificate
active
06173269
ABSTRACT:
BACKGROUND OF THE INVENTION
1. Technical Field
The invention relates to electronic commerce. More particularly, the invention relates to a method and apparatus for executing electronic commercial transactions with minors.
2. Description of the Prior Art
Electronic commerce is one of the most important aspects of the Internet. It allows people to exchange goods and services immediately and with no barriers of time or distance. Any time of the day or night, one can go online and buy almost anything one wants.
The demographics of the Internet have changed gradually over the past couple of years. As the total number of net users grows, their demographic profile becomes more similar to that of the average American. Core demographics—such as age, gender and income—are beginning to stabilize, more closely mirroring the population at large.
eStats estimates that 65% of current net users have used the Web to “shop around” online. Shopping as used herein is defined as checking out products and services and comparing prices, prior to a purchase decision. However, only 14% of net users have actually purchased anything online. Fewer still have used their credit card. This is expected to change drastically in the future.
Marketers sold about $9.5 billion worth of consumer goods over the net last year (1998), and it is projected that that figure will more than double to over $20 billion by the end of this year (1999).
While adults are able to complete commercial transactions over the Internet, minors, e.g. teens, are not able to enter into the binding contracts which form the basis of E-commerce. This is a significant factor in the growth and success of E-commerce because this year, teen spending for ages 12 to 19 will increase 16% to an estimated $141 billion, according to Teenage Research Unlimited Inc. Of that amount, $94 billion is their own money and $47 billion belongs to their parents. Teens get money from other sources as well, such as grandparents, odd jobs, and gifts.
Not only do teens have more money and greater influence over household purchases, but there are more of them. Last year, there were approximately 36 million teenagers, with the number projected to increase to nearly 40 million by 2005, according to the 1990 U.S. Census. If the parameters are broadened slightly, the estimate for the 10-to-24-year-old population group increases from 56 million this year to nearly 62 million in 2005.
Table A below shows teen income by age group.
TABLE A
Teen Income By Age Group
AGE
INCOME
12-15
$32
16-17
95
18-19
151
Source: Teenage Research Unlimited
Table B below shows where teens get their money.
TABLE B
Where Teens Get Their Money
As needed from parents
55%(*)
Odd jobs
47
Gifts
44
Part-time job
30
Allowance
28
Full-time job
12
Own business
2
Other
17
(*)Respondents were allowed more than one answer.
Source: Teenage Research Unlimited Inc.
Table C below shows the share of teen spending by category.
TABLE C
Share of Teen Spending By Category (1996)
Clothing
34%
Entertainment
21.7%
Food
15.5%
Other
10.7%
Personal Care
8.5%
Sporting Goods & Apparel
6.5%
Reading Materials
3.4%
Chart Courtesy react Magazine
Thus, while teens account for a significant portion of consumer purchases in several categories, they are literally shut out of E-commerce due to legal limitations on their ability to enter into binding contracts, as discussed above. In connection with teen purchases, it has been found that 22% of high school juniors have access to a credit card, 11% to a bank card, and 13.5% to a department store credit card. However, such access is to a parent's card. There are presently no such cards for teens in their own right. This lack of credit impedes the ability of teens to enter into transactions on the Internet, especially because all Internet commercial transaction involve credit of some sort. That is, it is not possible to use cash over the Internet and all commerce requires either a debit transaction (e.g. point-of-sale, i.e. ATM) or credit transaction (e.g. VISA or MasterCard). Yet, the Internet is well suited for teen shopping habits, e.g. clothing and entertainment products/services are readily available on the Internet.
Another issue affecting teen E-commerce involves the availability of literally anything on the Internet and the natural concerns of parents that their children not have access to immoral, dangerous, or otherwise objectionable products and services.
It would be advantageous to provide a method and apparatus for executing electronic transactions with teens, especially where such transactions could be limited only to those vendors or categories of vendors that have been approved by the teen's parents.
SUMMARY OF THE INVENTION
The invention provides a method and apparatus for executing electronic transactions with teens, especially where such transactions are limited only to those vendors that have been approved by the teen's parents.
In one embodiment, a virtual automatic teller machine (VATM) is provided in which funds are transferred from an existing account, such as a saving account, checking account, or credit card account, to an Internet passport account. The VATM account mimics a bank account, i.e. it gives the user the appearance of an ATM machine.
Functionally, the VATM allows the user to transfer funds from an existing account into the Internet passport account. The VATM does this by emulating an ATM machine as it appears to the Automated Clearing House (ACH) system. The ACH system is a separate network from the Internet. Rather than acting as a trustee for a teen account, the invention provides a system that authorizes a merchant to withdraw funds from the teen's account. In this way, the invention provides a system in which funds are not held, thereby eliminating cash advance fees and liabilities associated with trusteeship.
A second embodiment of the invention, a global gift certificate, is provided. The preferred second embodiment of the invention is configured to appear as a debit card to the ACH system. In this regard, the gift certificate thus generated is truly global in that it is accepted anywhere it is presented. The ability of the system to deny authorization of the merchant's request for payment provides the control mechanism.
A third embodiment of the invention is configured to appear as a global credit card to the credit system. This method might be preferable for the occasional merchant which does not have the ability to accept forms of electronic payment other than credit cards. Again, the ability of the system to deny authorization of the merchant's request for payment provides the control mechanism.
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Corsini Frank Anton
Knight Kirk Hoyt
Solokl Daniel David
Glenn Michael A.
Myhre James W.
Swann Tod R.
Zowi.com, Inc
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