Note: Descriptions are shown in the official language in which they were submitted.
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METHOD A.'~Tl? SYSTEM FOR GUARANTEED PURCHASING
Field of the Invention
The present invention relates to a method and system for allowing the
secure advance payment or prepayment of goods and services by the general
public.
BACKGROUND OF THE INVENTION
Purchasing of goods through retail stores often involves an advance
payment or prepayment for goods and services acquired prior to the actual
delivery of the goods or services purchased. Many goods, e.g., cars and
houses under construction, are not available off the shelf but are ordered
and/or completed according to the requirements of the customer, after
payment to the supplier. When making a purchase involving a large amount
of money, such as the purchase of an apartment which has not yet been
constructed, customers often require that the prepayment or advance
payment be secured by a bank guarantee, in order to ensure that the funds
they have prepaid are returned to them in the event that the seller is not
able to deliver the apartment, or other expensive property, which has been
paid for by tl~e buyer.
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Providing bank guarantees is a relatively complicated, expensive and time-
consuming procedure, involving the verification of the seller's credit, the
establishment of acceptable collaterals for the bank on the seller's part, and
the issuance of bank documents representing the bank's guarantee to the
buyer to repay his money if certain preset conditions occur, in which the-
seller cannot or does not fulfill his contractual obligations to the buyer.
The
procedure of authorizing and issuing such bank guarantee, which usually
covers not irrelevant sums of money, may take a relatively long time to be
performed, and cannot be carried out on the seller's premises.
Because of the complexity of providing bank guarantees, and the expense
attached to the procedure, such guarantees are typically issued only for
transactions involving substantial sums of money, such as in the purchase
of a house, and even then not in every case, since the buyer is sometime
required to bear the cost of the bank guarantee. However, an extremely
large number of small transactions is effected every day in retail stores or
the like business establishments, which cumulatively involve very large
sums, but each of which separately involves a relatively low sum.
Thus, for instance, when ordering furniture to be paid in three installments,
all or some of which is to be paid prior to the delivery of the furniture
purchased, the use of a bank guarantee to secure the refund of the
payments effected is highly impractical. Fven if the seller could provide a
bank guarantee, he could not do so in his store at the time v~~hen the
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purchase is made. It is therefore often the case that a buyer required to
make an advance payment for a purchase may remain exposed to the
financial risk of the seller's failure to deliver, for .instance, as a result
of the
seller's bankruptcy. It is therefore often that the seller has to forego an
advance payment as a result of his inability to provide an appropriate-
guarantee in his store at the time of the purchase.
Thus, the art has so far failed to provide any means by which a customer
who purchases goods or services to be delivered or provided to him after
payment, can be certain to obtain the refund of his money if the goods or the
services have not been supplied.
SUMMARY OF THE INVENTION
It is therefore an object of the present invention to provide a method and a
system which permit buyers to obtain a guarantee for sums paid on the
account of goods or services to be supplied at a later time.
It is another object of the invention to provide means for issuing reliable
guarantees to customers, in an efficient and cost-effective way.
It is another object of the invention to provide a method and a system which
allows sellers of goods and services to provide valid guarantees to customers
on the spot, thus avoiding the need for expensive and time-consuming bank
procedures to be conducted outside the business area.
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The invention is primarily directed to a method for allowing buyers to make
advance payments for the purchases of good and services at a Retail
Business (RB), wherein said payment is guaranteed by a Guaranteeing
Organization (GO) which provides a written guarantee issuable on the
premises of said Retail Business, said method comprising the steps of.-
a) establishing a credit by the GO for the RB;
b) providing within the GO means for storing, retrieving and updating
information representative of the level of credit accorded to the RB by
the GO;
c) providing communication means operated by the RB, suitable to
provide predetermined data to the GO, representative of the
transaction which it is desired to guarantee;
d) providing in the GO means for printing out at a remote printer a
valid authenticated guarantee for the sum involved in said
transaction;
e) checking whether the credit of the RB is sufficient to cover the
requested guarantee and in the affirmative case, modifying the credit
level of the RB within. the G0, by subtracting the amount of the
requested guarantee from the total available credit;
f) preparing data required. for issuing a guarantee to said customer,
wherein said guarantee identifies the transaction, the amount
guaranteed and the terms under which the guarantee may be
presented by the customer to the GO for payment; and
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g) printing out said valid, authenticated guarantee at said remote
printer.
In a preferred embodiment of the invention, the data used to issue _ a
guarantee further include the name of the person to whom the guarantee is
issued. While, of course, guarantees to the bearer can also be issued, a
guarantee which identifies the customer is usually more preferred.
According to a preferred embodiment of the invention, the method further
comprises adjusting the credi'~ level of the RB within the GO by adding to
the total available credit a sum corresponding to any original, authentic
guarantee returned by the RB to the GO. Such authentic guarantees will, of
course, be returned when the customer of the RB has received the goods or
services guaranteed for, in exchange for the restitution of the guarantee.
Additionally, the amount of any guarantee the validity of which has expired
without having been claimed will.also be added to the credit level of the RB.
There are different types of transactions. In many cases, the transaction
requires the physical presence of the customer on the premises of the RB, as
may be, for instance, when furniture has to be selected. In this case,
according to the invention the guarantee is printed out at a printer located
within the RB.
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Some transactions are not carried out on the premises of the RB, but by
remote purchase methods. Examples of such remote purchase methods
include, but are not limited to, the; Internet, purchases carried out by
telephone, and purchases effected by mail. According to another preferred
embodiment of the invention, when the purchase is carried out by remote-
systems, the guarantee is printed out at a printer belonging or available to
the customer. In the context of the present invention, the term "printer"
includes any outlet which may provide a valid guarantee to the customer,
such as a computer printer, a fax printer, and the like.
There are several methods of controlling the printing out of the guarantee.
In one instance, a Turbo Pascal program can be used to read an ASCII file
which is sent, one character after the other, to the printer, without using
the BIOS. This illustrative program sends characters to the printer using a
direct print protocol to the port which, in most cases in current PC
computers, is associated with LPT1. The program verifies, for each
character, whether the printer is available or not, but does not carry our
checks such as error checks. Such program may print a file to the printer
without using the BIOS of the PC, in order to make it difficult to capture
the print file, using commonly available programs known to the skilled
person.
According to a preferred embodiment of the invention the guarantee is
printed out by transmitting to computing means connected to the printer,
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executable objects which control the printing operation. There are several
means to do so, e.g., by using languages such as Active-X and Java.
According to a preferred embodiment of the invention, when the purchase is
effected by remote system, the printing out of the guarantee is operated by a
program using the Java or the like language.
According to another preferred embodiment of the invention, the printer is
connected to decoding apparatus which receives coded printing instructions
from computing means operated by the G0.
The invention is also directed to a system for allowing buyers to make
advance payments for the purchases of good and services at a Retail
Business (RB), wherein said payment is guaranteed by a Guaranteeing
Organization (GO) which provides a written guarantee issuable on the
premises of said Retail Business, comprising:
a) means provided within the GO for storing, retrieving and
updating information representative of the level of credit accorded
to the RB by the GO;
b) communication means operated by the RB, suitable to provide
predetermined data to the G0, representative of the transaction
which it is desired to guarantee;
c) means provided in the GO, for printing out at a remote printer a
valid authenticated guarantee for the sum involved in said
transaction;
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d) means provided in the GO, for checking whether the credit of the
RB is sufficient to cover the requested guarantee and in the
affirmative case, for modifying the credit level of the RB within
the GO, by detracting the amount of the requested guarantee from
the total available credit;
e) means for preparing data required for issuing a guarantee to said
customer, wherein said guarantee identifies the transaction, the
amount guaranteed and the terms under which the guarantee
may be presented by the customer to the GO for payment; and
f) means for printing out said valid, authenticated guarantee at said
remote printer.
According to a preferred embodiment of the invention, the system further
comprises means for modifying the credit level of the RB within the GO by
adding to the total available credit a sum corresponding to any original,
authentic guarantee returned by the RB to the GO, or to any guarantee the
validity of which has expired, and for which no claim has been presented by
the buyer.
In one preferred embodiment of the invention, the system comprises means
for printing out the guarantee at a printer located within the RB. In another
preferred embodiment of the invention, the system comprises means for
printing out a valid, authentic guarantee at a printer belonging or available
to a customer of a remote purchasing system.
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In accordance with a preferred embodiment of the invention there is
provided a system comprising means for printing out the guarantee by
transmitting to computing means connected to the printer, executable
objects which control the printing operation.
According to another preferred embodiment of the invention, the system
comprises decoding means connected to the printer, which decoding means
are suitable to receive coded printing instructions from computing means
operated by the GO, and for decoding them and translating them into
printing instructions for the printer.
Other objects and advantages of the invention will become apparent as the
description proceeds.
Brief Description of the Drawings
In the drawings:
Fig. 1 schematically shows, in general terms, the functioning of a
system according to a preferred embodiment of the invention;
Fig. 2 schematically shows a computer arrangement according to one
preferred embodiment of the invention;
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Fig. 3 is an example of a simple form for inputting data to be
transmitted form the Retail Business (RB) to the Guaranteeing
Organization (GO), filled-in with sample details; and
Wig. 4 is a flow chart that summarizes the main steps involved i.n the
GO's processing of a request for the issuance of a guarantee.
Detailed Description of Preferred Embodiments
The invention will now be further described through the detailed
description of an illustrative and non-limitative preferred embodiment
thereof. Looking at Fig. 1, the functioning of a system is schematically
shown, which illustrates the functional relationship between a
Guaranteeing Organization (GO), indicated by numeral 1, and a Retail
Business (RB), indicated by numeral 2. The GO can be any financing
organization, including but not limited to banks, insurance companies,
bonding firms, etc., provided that such organization is legally authorized to
carry out such financial activities in the relevant jurisdiction(s). The RB
can
be virtually any type of business, such as retail stores, service companies,
and any kind of organization which requires pre-payment, or payment on
account, for supplying any type of goods or services, or for transmitting
legal
title in property.
In order to be able to use the system of the invention, the RB must establish
a credit line with the GO. The total amount of guarantees that the GO will
issue on behalf of the RB at any given time will not exceed the total amount
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of credit accorded to the RB by the GO, although of course each GO can
decide on exceptions to this rule in respect of any given RB. The RB credit
line with the GO, indicated by numeral 3, constantly changes as will become
apparent :from the following description. In Fig. 1 only two credit levels are
shown, namely level A and level B, for the sake of simplicity.
The GO and the RB are connected via a communication line 4, which may
be, e.g., a computer line or a telephone line, which is used by the RB to
request the issuance of a guarantee. According to a preferred embodiment of
the invention, and as will be described in greater detail below, the request
for the issuance of a guarantee is made through a computer terminal,
according to predetermined standards decided upon by the GO.
The GO is also connected to a printer 5 via a communication line 6, which
printer is used to print out the guarantee. As will be further explained
hereinafter, in many instances communication lines 4 and 6 may be unified
into a single communication line. Additionally, printer 5 may operate either
as a remote printer for the computing system located within the GO, or it
may be coupled to computing means, such as a PC, provided within the RB,
and printing instructions for the guarantee may be provided to it by the GO
through said local computing means. The printing operation of the
guarantee will be discussed in greater details later.
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When a customer wishes to obtain a guarantee for his prepayment, the RB
con~,acts the GO, through communication line 4, providing all the relevant
details of the purchase, such as purchase amount, amount of the guarantee,
expected supply date, details of purchasing customer, etc:. The GO processes
the request by first verifying the level of credit presently available to the
specific RB. Assuming the level of credit A is in excess of the requested
guarantee, and that the transaction meets all other basic requirements of
the GO, the GO authorizes the transaction, reduces the level of the credit
available to the RB to level B (assuming the value of the guarantee
requested for the specific transaction is A-B), and sends instructions to
printer 5, through communication line 6, to print out the required
guarantee setting forth all the details of the specific transaction. The
guarantee 7 is then printed out and handed over to the customer. The
customer, schematically indicated by numeral 8, receives the guarantee 7
and may verify its authenticity by contacting the GO and confirming its
details. Such verification can be carried out by phone or in person, or in any
other suitable way.
Once the goods or services to be supplied become available, they are
supplied to the customer against the return of the written guarantee. The
RB then returns the original written guarantee to the GO (such process
being indicated by numeral 9 in broken lines, to indicate that the original
guarantee must be physically returned to the GO, and not through
electronic communication lines), which reinstates the level of its credit by
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the amount indicated on the guarantee. The reinstatement of the amount of
RB's credit with the GO by the amount of the guarantee also takes place
when the validity of the guarantee, which is normally limited in time, has
expired. Thus the full cycle of sale, guarantee and cancellation of guarantee
is completed. However, many such cycles can be effected simultaneously;
the only limitation being the level of credit available to the RB within the
GO.
The GO will of course charge the RB an amount agreed between them,
which may for instance represent a percentage of the guarantee issued, or
any other sum no matter how calculated. The present invention is not
concerned with the commercial aspects of the relationship between the GO
and the RB, and therefore the remuneration required by the GO for the
services described above will not be discussed here.
Looking now at Fig. 2, a system is illustrated which is used, according to
one preferred embodiment of the invention, to print out valid guarantees to
the customer. The printer 5 of Fig. 1 is located on the premises of the RB
and, according to this preferred embodiment, is connected to computing
means 10, which may be a PC or the like apparatus, located within the RB.
Computer 10 is in turn connected with computing means 11, located within
the GO, which controls the process of issuing the guarantee.
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The procedure described hereinafter relates, for the sake of brevity, only to
the fully computerized operation. However, as it will be apparent to the
skilled person, all operations carried out by computer 10 can be carried out
in other ways, such as the information can be faxed or telephoned to the
GO, and a GO operator may input the relevant information into computer'
11, rather than having it fed to it directly from computer 10. This option
may be useful when the RB is a small organization (e.g., a kiosk) which does
not possess a local PC, in which case a communication device (not shown)
will be provided to permit direct printing of the guarantee by computer 11
onto printer 5. Another situation in which such option can be important is if
the RB is having temporary communication problems that do not allow
computer 10 to transmit the desired information directly to computer I1.
However, such obvious modifications are apparent to the skilled person, and
will therefore not be described in detail herein, for the sake of brevity.
According to the embodiment of Wig. 2, therefore, the RB operator inputs the
relevant details of the transaction into computer 10, which may function
either a.s a terminal of computer 11, or which may transmit to computer 11
a file containing the relevant information, according to any suitable
communication protocol. Appropriate security measures, such as encryption
and/or validation of the data transmitted to and from computer 11, will
most often be desirable, as customary and understood by skilled persons,
with respect to transactions involving transfer of funds and/or securities.
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An example of a simple form for inputting data to be transmitted form the
RB to the GO is shown in F'ig. 3, which is self explanatory. It should be
noted, however, that the "transaction input form" must contain at least full
details of the buyer, the goods involved, the amount of the purchase, the
amount of the guarantee, and a "guaranteed supply date". This latter is the -
date after which the buyer may apply to the G0, if the goods or services
have not been supplied, and demand that the amount of the guarantee be
paid to by him by the GO, against the original written guarantee prior to
the expiration of the guarantee. The GO will of course exercise appropriate
caution in processing such claims, to ensure that no fraudulent activity is
involved, such as the attempt to process a stolen guarantee. However, such
cautionary measures, which are customary and necessary in the trade,
exceed the scope of the invention and are therefore not discussed herein in
detail.
The printing procedure of the guarantee at the RB's end must also be
effected with suitable cautionary measures, to avoid the possibility that an
RB should attempt to issue false guarantees. There are many ways known
in the art and constantly developed in order to achieve the above goal, and
the skilled person will be able to chose suitable means which can be
incorporated within a given system. According to one preferred embodiment
of the invention, computer 11, which controls the guarantee printing
operation, does so by transmitting to computer 10 executables which
perform the printing operation. Such executables are not permanently
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resident in the memory of computer 10, and are canceled after their task
have been performed. An illustrative and non-limitative example of such
executables are the so-called "Java applets".
According to another preferred embodiment of the invention, the printing
instructions are transmitted to the printer, either directly or through
computer 10, in an encrypted form which needs be decrypted prior to
printing. Decryption can be effected using, e.g., suitable decryption
hardware provided by the GO and connected between the printer and
computer 10, either externally or internally. Such decryption hardware, not
unlike, in principle, television decoding apparatus, is not easily accessible
by the RB, since it operates according to a standard known only to the GO,
and therefore does not permit the RB to interfere with the printing of the
guarantee. Providing such coding and decoding apparatus is of course
within the skill of the man of the art, and such apparatus is therefore not
described herein, for the sake of brevity.
The main steps which the GO has to execute in the processing of a request
by the RB to issue a given guarantee, are summarized in Fig. 4. The first
step, 41, involves receiving the data provided by the RB, which form the
basis for the acceptance or rejection of the RB's request, and for the
preparation of printed guarantee. The transaction is tested (step 42), based
on specific details required by the G0, to determine whether it falls within
the scope of the transactions that the GO defines as acceptable. In the
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example of Fig. 3, for instance, the GO will examine whether the type of
transaction (purchase of furniture), the amount and the term of tre
transaction, comply with its rules, which of course will change from one RB
to another. Codes may be provided, such as the "transaction code" and the
"goodslservices code" of the example of dig. 3, to simplify processing of the -
information at the GO's computer, and to avoid as much as possible the
need for human intervention in the process. Of course, if the transaction
should involve, e.g., the sale of unlawful drugs, the GO would refuse to
issue a valid guarantee for it, but there may be less clear situations in
which whether the transaction is acceptable by the specific GO's standard is
not readily apparent.
if the transaction is not acceptable on a basis of principle, the GO will
advise the RB of this fact (step 43), and will discontinue the processing of
the request. The RB can be advised in any suitable way, e.g., by printing out
a "notice of refusal" rather than a valid guarantee, or by contacting the RB's
representative.
If there is no objection of principle to the transaction, the credit level of
the
RB (who is sometime identified herein as "the customer", from the point of
view of the GO) is verified (step 44), to determine whether sufficient credit
is available to cover the requested guarantee, as well as any related GO
costs. If the level of credit available at the time of processing is not
sufficient, again the GO advises the RB, in any suitable wa3~, of its refusal
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to issue the guarantee (step 45), and discontinues the processing of the
request.
If the RB has sufficient credit for the specific transaction, the value of the
guarantee (as well as any GO costs involved) is deducted from such credit.
The GO then prepares the data needed to print the guarantee, which as
explained above will contain at least the major details needed to identify the
transaction, as well as the conditions which, when met, entitle the buyer to
demand the payment of the guaranteed sum from the GO. Guarantees will
normally be addressed to a specific and identified buyer, although it is also
possible to issue guarantees to the bearer, as long as the transaction
involved in unequivocally identified. The GO then connects to the printing
means of the RB, as explained above, either through a computer located
within the RB, or directly to printing apparatus, e.g., via a secure
interface,
and prints out the guarantee. When the buyer has inspected the guarantee
and, if desired, has confirmed its authenticity by directly contacting the G0,
he can make the payment to the RB, knowing that, should the terms of the
transaction not be complied with by the RB, he will be able to call on the
guarantee from the G0.
As will be apparent from the above description, the invention simplifies
trade by making transactions more secure for the public, and providing
valid guarantees far relatively small transactions which, prior to the
inverition, had no means of being effectively guaranteed. Furthermore, the
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invention can be exploited in a variety of environments, whether on a
national or an international basis. For instance, the GO and RB can be
connected not through a LAa~T or direct modem connection, but may also
function over the Internet. A buyer wishing to purchase an item via the
Internet will be able to obtain a valid guarantee from a GO which also
operates over the Internet. Furthermore, the GO may maintain branches in
various countries, so that a buyer who wishes to purchase goods over the
Internet from an RB physically located in another country, may still be
issued a guarantee payable in his own country and currency.
Another example is the purchase of articles through international television
channels, where the buyer authorizes payments on his credit card to an
entity which may .turn out to be located in another country, and where he
has no. means of ascertaining that the goods will be eventually delivered to
him.
Another variant of the invention, particularly useful when purchases over
the Internet and via television or catalogue are involved, permits the
printing out of valid guarantees by the GO on the buyer's printer, as
opposed to printing out the guarantee in a shop, where both buyer and
seller are physically present. The skilled person will appreciate that there
are no particular problems associated with the printing out of forms at the
buyer's end, and this may be carried out in a variety of ways, whether by
accessing the buyer's printer, or by allowing the buyer to print out a file
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sent to him, in a way very much similar to that used for operating with the
RB. However, in all cases it is necessary to provide means for preventing
the unauthorized reproduction of a printed guarantee, and for ensuring that
the document printed out by the GO at the customer's printer is unique and
cannot be forged. Many ways are available in the art for this purpose, and -
the skilled person will be able to select a suitable method for its specific
system.
All the above description of preferred embodiments has been provided for
the purpose of illustration, and is not intended to limit the invention in any
way. Many modifications can be effected in the various systems ' and
methods employed, and many functions can be incorporated in the system of
the invention, all without exceeding the scope of the invention.
