Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
1997-07-11
2001-09-25
Hafiz, Tariq R. (Department: 2163)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
C705S053000
Reexamination Certificate
active
06295522
ABSTRACT:
FIELD OF THE INVENTION
This invention relates generally to transfer of value between consumers and merchants using stored-value cards. More specifically this invention relates to a system and method for transferring electronic money between a customer and a merchant when one or the other does not possess a stored-value card or the underlying infrastructure.
BACKGROUND OF THE INVENTION
With the advent of the Internet and other methods of electronic communication as well as the increasing flexibility and sophistication of microchips, there is an emerging trend to engage in “cashless” transactions. Such transactions are typified by electronic transfer of funds of one form or another with no paper money actually changing hands.
Historically, credit cards are one such form of cashless transaction methodology. The typical situation is for a consumer to present a credit card either in person or over the telephone to a merchant or a service provider (collectively a “merchant”). The merchant verifies that the credit card is valid and accepts what amounts to a promise of payment from a credit card service for the goods or services that are provided to the consumer. The problem with credit card transactions is that a merchant must wait a certain number of days for finds to be received for goods that are shipped immediately. Further, the merchant must pay a “penalty” in the form of a credit card commission for the certainty of receiving funds from the credit card company. Thus from both a time and “cost of doing business” perspective credit cards have certain disadvantages for merchants.
Debit cards are yet another attempt to engage in cashless transactions. In a debit card scenario rather than funds being accessed by a credit card company, a debit card accesses funds that are directly in a consumer's bank account. Thus if money is present in a consumer's bank account, such money may be spent. If insufficient funds are present in the account, the amount of a purchase cannot be spent. The debit card also leads to faster transfer of funds since funds are transferred out of the account of the consumer when money is spent. However, there is still a lag in time for money to reach the merchant's bank account.
An approach to the immediate receipt of funds in a cashless transaction is the “stored value card.” The stored-value card comprises a credit card-like device with a microchip embedded in the card. The microchip comprises storage capability and other security features which prevent its being tampered with. The stored-value card allows an electronic representation of a consumer's money to be stored on the card. That money is deducted from a consumer's bank account and represented in electronic form on the stored-value card.
When a merchant is prepared to accept the stored-value cards, that merchant has a stored value card of its own coupled to a transfer device. That transfer device could be a point of sale terminal optimized for stored-value transactions. When a consumer desires to purchase goods or services with a stored-value card the consumer takes the stored-value card to the point of sale, and inserts the stored-value card in the point of sale device. Using the security features on the card, funds are then subtracted from the consumer's stored-value card and transferred to the stored-value card of the merchant. In this fashion the electronic representations of cash are immediately transferred and made available to the merchant and immediately deducted from the consumer. Thus there is no delay and processing expense is minimized.
In this fashion the typical transfer where money comes from a consumer and must be settled through a consumer's bank to a settling agency thereafter sent to a merchant's bank and thereafter sent to the merchant's account is eliminated from the process. Thus the entire settlement procedure and the attendant time delay is eliminated.
A stored-value card of this fashion is represented in an embodiment marketed by Mondex USA. This system comprises credit card-like devices with a microprocessor embedded in the “credit card” which in turn digitally stores the consumer's electronic equivalent of cash.
While stored-value cards eliminate the settlement time and give certainty to the consumer/merchant transaction, a difficulty with use of stored value cards is that both the merchant and the consumer must be using their respective cards simultaneously. A consumer who desires to purchase goods and services who goes to a merchant that does not have stored-value card equipment, simply cannot purchase goods and services without using a credit card or cash or some other transaction. Similarly a consumer who does not have a stored-value card that goes to a merchant that has stored-value card equipment and infrastructure has no way to pay the merchant in the rapid fashion embodied in the stored-value card technology.
A need therefore exists to allow consumers and merchants to purchase goods and services and deliver goods and services to one another using stored value card technology, when one of the parties does not have such technology.
SUMMARY OF THE INVENTION
It is therefore an object of the present invention to take advantage of stored-value card technology.
It is a further object of the present invention to permit consumers, who do not have stored-value cards, to nonetheless take advantage of stored-value card technology.
It is a further objective of the present invention to allow merchants, who do not have stored-value card technology, to interact with consumers who possess stored-value cards.
It is a further objective of the present invention to establish trusted value acquirers who can broker transactions between consumers who do not have stored-value cards and merchants who possess stored-value card technology, and vice versa.
It is a further objective of the present invention to establish trusted value acquirers associated with merchants who can interact with consumers possessing stored-value cards so that transactions using stored-value technology can take place.
These and other objectives of the present invention will become apparent to those skilled in the art after review of the detailed description of the preferred embodiment that follows.
The present invention involves establishing a network among a consumer, a consumer value acquirer (CVA), and a merchant that accepts stored-value card transactions. The consumer initiates a transaction via the consumer's computer terminal establishing communication with a merchant through a CVA over a network, preferably the Internet. The CVA comprises a computer capable of handling the communications associated with the purchasing of goods and services. In addition, however, the CVA has a database of a number of consumers who do not possess stored-value cards but who wish to make such transactions. Each consumer's account stored in the database is established by the consumer authorizing funds to be transferred into the account at the CVA from the consumer's bank account. This transfer of funds can be via an ACH transaction, wiring of funds to the CVA consumer account, payment of money directly to the CVA, or any other method whereby the CVA can establish a reservoir of funds earmarked for use by the consumer. Alternatively the CVA can advance credit to the consumer or otherwise wait for payment from the consumer at a later time by other means.
In addition to the database of consumers and electronic funds stored for the account of the consumer, the CVA possesses a pool of stored-value cards for use in transactions on behalf of consumers. Typically the number of cards in the pool will be substantially less than the number of consumers who might use them. They are simply present to facilitate stored-value transactions. Thus the CVA has access to use of stored-value cards and the appropriate communications protocol associated therewith which can be used at any time on behalf of consumers.
When a consumer desires to purchase any particular goods or services, the CVA c
Cybercash, Inc.
Hafiz Tariq R.
Meinecke-Diaz Susanna
Roberts Abokhair & Mardula LLC
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