Note: Descriptions are shown in the official language in which they were submitted.
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SYSTEM AND METHOD
FOR
PROCESSING FINANCIAL TRANSACTIONS
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SYSTEM AND METHOD FOR PROCESSING FINANCIAL TRANSACTIONS
This application claims priority in U.S. Application No. 09/505,721, filed
February 17,
2000; and U.S. Provisional Application Nos. 60/120,760, 60/271,408, and
60/278,431, filed
February 19, 1999, February, 27, 2001, and March 26, 2001, respectively. These
cited
applications are incorporated herein by reference.
Field of the Invention
The invention relates generally to retail transactions and, more particularly,
to systems
and methods for monitoring consumer behavior and for providing a secure
electronic payment in
exchange for goods and services.
. Description of the Related fart
Retail store chains survive on high sales volumes and low profit margins.
Accordingly,
retail professionals are constantly searching for cost-effective mechanisms to
encourage,
consumers to shop at their retail stores and for efficient low-cost methods to
process completed
retail transactions. In the past, the most common approach utilized by
retailers for motivating
1 S customers to shop in a particular establishment was to provide purchasing
incentives to their
customers, usually in the form of printed discount coupons...These coupons
have been
distributed to customers either through mass mailings or in a more focused
manner, based on a
customer's previous purchasing habits. Coupons have also been given to
customers in retail
stores, either from kiosks or at the check-out stand, in response to the
customer's purchase of
some preselected item or items.
Retailers have come to realize that the more efficient approach to encouraging
consumers
to shop at their retail store is to, identify loyal customers and to offer
incentives to them in
response to their continued loyalty. Implementing systems that track customer
purchasing
trends for the purpose of identifying loyal customers can be prohibitively
expensive.
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Furthermore, promoting retail store loyalty is a time-consuming process that
necessitates
determining consumer needs, which vary across demographic boundaries, and then
providing
the goods that satisfy those needs. Unfortunately, the process of analyzing
collected consumer
data is also expensive, time-consuming, and of limited use. Regional and
national consumer
S demographics data available from Nielson and other agencies regarding
consumer product
movement is predictably too general to be useful to specific retailers.
Additionally, these
agencies do not address product movement demographics that would allow
retailers to learn the
particular needs and buying habits of people purchasing specific products.
An alternative to the traditional loyalty program that does not require
demographics data
is one in which increased sales and customer loyalty is obtained through a
reward system. For
example, the airline industry rewards loyal customers using frequent flyer
programs. Attempts
have also been made to develop "frequent shopper" marketing and sales
promotion services in
retail sales. Other retailers have experimented with programs that reward
frequent shoppers by
distributing cards to customers who regularly purchase name brand goods
manufactured by a
particular vendor. Cards are used at participating retail stores.to identify
the customer and
record purchases of particular brand goods and to award points based on the
number of brand
good purchases. Points are accumulated, and gifts are given to the card member
based on a
predetermined criteria.
Unfortunately, none of these services completely address or meet the needs and
interests
of modern retailers. For example, many of these existing programs encourage
"brand loyalty" or
"retail store loyalty," but do not permit the retailer to reward acros s
brands (co-branding) or
across retailers. Specifically, none of these services allow a retail store
owner to reward
purchase of Coca CoIaTM products with a discount on Frito LayTM snacks.
Furthermore, none of
these services allow a Wendy'sTM franchise owner to reward the purchase of a
predetermined
number of Wendy'sTM products with a complementary oil change at Jiffy LubeTM
for example.
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Moreover, none of these services allow a retailer to associate particular
consumer groups with
specific consumer needs. For example, in the grocery retail business in the
United States,
double income families are pressed for time and show a trend toward less time
being spent
shopping and preparing meals. Retail grocers are challenged to provide
incentives to encourage
these kinds of shoppers into their stores. Retailers and consumers alike could
benefit from
systems that allow retailers to identify health conscious consumers and to
offer incentives that
appeal to the consumer's need for natural and/or healthy foods: Identifying
those shoppers
having special dietary needs, e.g., medical problems and then marketing to
those dietary needs
may be particularly advantageous to retailers. Providing products that appeal
to certain groups
instead of offering generic grocery items may also be profitable.
Complicating the reality that modern-day loyalty programs do not meet the
needs of the
modem retailer is the fact that an increasing number of retail store customers
also own personal
computers with many having access to computer network services that provide
connections to
the Internet. Although some computer sites connected to the World Wide Web
have begun to
offer "online" shopping services, and some services have proposed to deliver
discount coupons
through a computer network, the full potential of online delivery of
incentives has not been
realized.
Aside from restricting the growth of loyalty programs, it is widely suspected
that the
emergence of the World Wide Web has also created an avenue for increased
consumer exposure
to fraudulent "online" transactions. Internet-based payment solutions give
unprecedented access
to personal information by uninvited eavesdroppers. Conducting these types of
transactions
over the Internet consequently requires additional security measures that are
not found in.
conventional transaction processing networks. This additional requirement is
necessitated by
the fact that Internet communication is performed over publicly-accessible,
unsecured
communication lines in stark contract to the private, dedicated phone line
service utilized
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between a traditional "brick and mortar" merchant and a credit authorizing
organization. As an
example, Fig. 1 is a diagrammatic representation of a conventional system 10
for processing
retail non-cash transactions. A customer enters a merchant store 12 and makes
a purchase using
a credit card issued for example, by one of a plurality of credit card issuing
agencies such as a
bank or payment processing system 16. Merchant store 12 may be one of a large
number of
similar stores, all owned or managed by a common parent corporation or
headquarters 14. A
record of each credit card transaction, regardless of which card vas used, is
transmitted by a
dedicated communications channel 13 to merchant corporation headquarters 14 of
the retail
outlet 12. A processor'at merchant corporation headquarters 14 analyzes the
credit card
transaction records received and then routes the transaction, along a second
dedicated
communications channel 1 S, to an appropriate payment processing system 16,
according to the
identification of the particular credit card used in the original transaction.
Compare that to the situation that arises when.an online consumer purchases
goods and
services over the Internet. As shown in Fig. 2, when a consumer 18 transmits
credit card
1 S information to an onlilie merchant 24, the information passes through
countless sLZ-~ers 21 and
routers 22 on its way to the online merchant 24. Along the way, the
information can easily be
scanned and scrutinised by numerous interlopers (not shown). Thus, it is
critical that any retail
processing systemwtilizing the Internet or any other unsecured network as a
comm~mication '.
medium, must employ some form of security or encryption.
2U In view of the shortcomings of currently available online transaction
processing systems
and methods, it is desirable to provide a system and method that increases
customer convenience
and security. It is also desirable to provide a system and method that allows
merchants to easily
compile demographics data for use in designing customer loyalty and incentive
programs.
Summary of the Invention
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The present invention satisfies the above-described need by providing a system
and
method for processing consumer transactions. In the systems of the present
invention, a
consumer located in a retail establishment identifies goods or services to be
purchased and then
communicates payment information to the merchant by transmitting an
identification signal via
a wireless customer transceiver to a merchant transceiver coupled to a point
of sale (POS)
device. Once the merchant transceiver captures the customer ID, it passes it
to a POS device
that then combines the customer ID, merchant ID and transaction data into an
authorization
request. The POS device then transmits the data to a transaction processing
system (host
computer) where the customer's payment method is identified. For payment
methods requi ring
authorization, a request for authorization is transmitted to the appropriate
payment processing
center. Once the payment processing center authorizes the transaction, it
transmits an
authorization code back to. the POS device via the transaction processing
system. Since the
system never transmits a customer's credit card or debit card number across an
unsecured link, it
provides a heightened degree of security over prior art systems. Also, by
communicating with
the merchant via a wireless customer transceiver, the system increases
customei confidence that-
their credit card r_umber or other payment data will not be impermissibly
accessed and
fraudulently utilized by nefarious retail store employees. The system also
provides a much
greater degree of convenience to-participating customers since.it allows~the3n
to preassign
specific payment methods to specific retail establishments, and to have the
preassigned payment
methods automatically selected by the transaction processing system whenever
the customer
utilizes his/her wireless customer transceiver in the merchant's retail
establishment.
The system also provides unprecedented benefits to merchants. Most
importantly, the
transaction processing system which is networked to the merchant's in-store
POS devices, and
to the merchant's on-line shopping net<vork, allows merchants to quickly and
efficiently process
non-cash transactions for in-store and on-line customers, using the same
system. Also, since a
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merchant can track the purchasing history of each customer who uses the
transaction processing
system to authorize payments, the merchant may provide for targeted incentives
to the customer
based on his or her prior purchases, regardless of their method of origination
(in-store or on-
line). Moreover, the transaction processing system's association with a
plurality of different
merchants allows a merchant associated with the system to couple its incentive
program with
that of another participating merchant, thereby allowing customer loyalty to
be awarded across
multiple merchants.
In another aspect, the present invention provides a method for securely
processing
financial transactions over the Internet or other unsecured network. The
method includes
utilizing a wireless customer transceiver to transmit a customer's ID to a
transceiver coupled to
the customer's computer. The computer identifies the desired product from a
merchant's online
website and transmits the customer ID and the product information to the
transaction processing
system. As in the case of an embodiirient, the transaction processing system
identifies the
selected payment method and transmits the authorization request to the
appropriate payment
1 S processing center. Once the transaction processor authorizes.the
transaction, it transmits an
authorization code to the online merchant and the merchandise is then
delivered to the
customer's address. In addition to transmitting a transaction authorization,
the transaction
processing system also may transmit identification information and other data
unique to the
associated customer in the absence of a retail transaction. An additional
embodiment of a
transaction processing system irAcludes a system.capable of h~ansmitting
instructions to a vendor
based on receipt of a customer ID (e.g., issue a ticket to the customer,
provide access to the
customer, etc.).
In yet another aspect, the present invention provides a method for associating
a
customer's preferences with his or her customer ID. For example, a fast food
restaurant chain
may choose to collect and store a description of a customer's favorite meal so
that when the
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customer transmits his ID to a merchant transceiver located in the fast food
restaurant, his
favorite meal is ordered and payment processing occurs, without the customer
uttering a single
word.
To achieve these and other advantages, and in accordance with the purpose of
the
invention as embodied and broadly described, the invention provides a system
for processing
retail transactions. The system comprises a wireless customer transceiver
preprogrammed with
a unique customer/transmitter ID number, and a merchant transceiver that
captures the
customer/transmitter ID and forwards it to an associated POS device. The POS
device receives
transaction data via an input device and combines the transac tion data with
the received ID
signal from the reader to form an authorization request. At least a portion of
the authorization
request may be encrypted to further enhance security. The POS device transmits
the
authorization request over a communications channel to the transaction
processing system that
includes a processor and a customer information database. The customer
information database
includes a plurality of customer entries with associated transaction
processing attributes. The
processor receives the authorization request, decrypts it (if necessary) and
transmits it to the
payment processing system in accordance with the customer's predetermined
choice of payment
method. The processor also stores data derived from a transaction entry
associate d with the
customer ID. In addition to processing transactions, the system facilitates
the collection and
analysis of comprehensive demographics and purchasilig data for managing
consumer loyalty
programs and performing trend analysis of consumer purchasing trends.
It is to be understood that both the foregoing general descriptions and the
following
detailed description are exemplary and explanatory and are intended to provide
further
explanation of the invention as claimed.
Additional features and advantages of the invention will be set forth in the
description
which follows, and in part will be apparent from the description, or may be
learned by practice
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of the invention. The objectives and other advantages of the invention will be
realized and
attained by the methods, systems, and apparatus particularly pointed out in
the written
description and claims hereof, as well as the accompanying drawings.
Brief Description of the Drawings
The accompanying drawings, which are incorporated in and constit<rto a part of
this
specification, illustrate embodiments of the invention and, together with the
description, serve to
explain the objects, advantages, and principles of the invention.
In the drawings:
Fig. 1 is a diagram illustrating a conventional retail credit card transaction
processing
system;
Fig. 2 is a diagram illustrating a conventional online computer system for
purchasing
goods and services over the Internet;
Fig. 3 is a diagram illustrating an improved system for processing
transactions,
consistent with the present invention;
Fig. 4 is a diagrammatic representation of a point of sale device in
accordance with the
present invention;
Fig. 5 is a diagrammatic representation of a payment proces sing terminal in
accordance
with the present invention;
Fig. 6 is a diagrammatic representation of a transaction processing system ir?
accordance
with the present invention;
Fig. 7 is a. diagrammatic representation of an alternate embodiment of a
system for
processing transactions in accordance with the present invention;
Fig. 8 is a diagrammatic representation of an online merchant computer in
accordance
with the present invention;
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Fig. 9 is a diagrammatic representation of an online customer computer in
accordance
with the present invention;
Fig. 10 is a diagrammatic representation of a customer transceiver in
accordance with the
present invention;
Fig. 11 is a detailed flow diagram depicting the steps performed by the
preferred
embodiment of a customer transceiver when brought in proximity of a merchant
transceiver;
Fig. 12 is a diagrammatic representation of a merchant transceiver in
accordance with the
present invention;
Fig. 13 is a flow diagram illustrating the preferred method for processing
financial
transactions in accordance with the present invention;
Fig. 14 is a detailed flow diagram depicting the steps performed to enroll a
customer in
accordance with the present invention;
Fig. 14b is a detailed flow diagram depicting the steps performed to enroll a
customer in
accordance with a further embodiment of the present invention;
1 S Fig. 1 S is a detailed flow diagram depicting the steps performed to
process a customer
transaction in accordance with the present invention;
Fig. 16 is a detailed flow diagram depicting the steps performed to perform an
end of day
closing in accordance with the present invention; and
Fig. 17 is a detailed flow diagram depicting the steps performed to manage a
customer
'?0 loyalty program in accordance with the present invention.
Detailed Description of Preferred Embodiments
In the following detailed description of preferred embodiments, reference is
made to the
accompanying drawings that form a part thereof, and in which is shown by way
of illustration a
specific embodiment in which the invention may be practiced. This embodiment
is described in
25 sufficient detail to enable those skilled in the art to practice the
invention and it is to be
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understood that other embodiments may be utilized and that structural changes
may be made
without departing from the scope of the present invention. The following
detailed description is,
therefore, not to be taken in a limited sense.
To achieve these and other advantages, and in accordance with the purpose of
the
invention as embodied and broadly described, the invention provides a system
for processing
retail transactions. The system comprises a customer transceiver preprogrammed
with a unique
customerltransmitter ID number, and a merchant transceiver that receives a
customer
identification signal from the customer transceiver and then forwards the
received customer ID
signal to an associated POS device. The POS device receives transaction data
via an input
1Q device and combines the transaction data with the customer ID signal to
form an authorization
request, in those cases when the payment method requires authorization. The
POS device
transmits the authorization request over a communications channel to a
transaction processing
system that includes a processor and a customer information database comprised
of a plurality of
customer entries with associated transaction processing attributes. The
processor receives flee
authorization request and transmits it to the pa~m~ent processing system
dictated by the
customer's payment choice for the transaction. The processor also stores data
derived from a
transaction entry associated with the customer ID. In addition to processing
transactions, the
system facilitates the collection and analysis of comprehensive demographics
and purchasing
data for managing consumer loyalty programs and performing trend analysis of
consumer
purchasing trends.
Turning first to the nomenclature of the specification, the detailed
description which
follows is represented largely in terms of processes and symbolic
representations of operations
performed by conventional computer components, including a central processing
unit {CPLJ),
memory storage devices for the CPU, and connected pixel-oriented display
devices. These
operations include the manipulation of data bits by the CPU and the
maintenance of these bits
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within data structures residing in one or more of the memory storage devices.
Such data
structures impose a physical organization upon the collection of data bits
stored within computer
memory and represent specific electrical or magnetic elements. These symbolic
representations
are the means used by those skilled in the art of computer programming and
computer
S construction to most effectively convey teachings and discoveries to others
skilled in the art.
For the purposes of this discussion, a process is generally conceived to be a
sequence of
computer-executed steps leading to a desired result. These steps generally
require physical
manipulations of physical quantities. Usually, though not necessarily, these
quantities take the
form of electrical, magnetic, or optical signals capable of being stored,
transferred, combined,
compared, or otherwise manipulated. It is convention for those skilled in the
art to refer to these
signals as bits, values, elements, symbols, characters, terms, objects,
numbers, records, files or
the like. It should be kept in mind, however, that these and similar terms
should be associated
with appropriate physical quantities for computer operations, and that these
terms are merely
conventional labels applied to physical quantities that exist within and
during operation of the
computer.
It should also be understood that manipulations within the computer are often
referred to
in terms such as adding, comparing, moving, etc. which are often associated
with manual
operations performed by a human operator. It must be understood that no such
involvement of a
human operator is necessary or even desirable in the present invention. The
operations
described herein are machine operations performed in conjunction with a human
operator or user
who interacts with the computer. The machines used for performing the
operation of the present
invention include general digital computers or other similar processing
devices.
In addition, it should be understood that the programs, processes, methods,
etc. described
herein are not related or limited to any particular computer or apparatus.
Rather, various types
of general purpose machines may be used with programs constructed in
accordance with the
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teachings described herein. Similarly, it may prove advantageous to construct
specialized
apparatus to perform the method steps described herein byway of dedicated
computer systems
with hard-wired logic or programs stored in nonvolatile memory, such as read
only memory.
The operating environment in which the present invention is used encompasses
general
S distributed computing systems wherein general purpose computers,
workstations, or personal
computers are connected via communication limes of various types. In a client
server
arrangement, programs and data, many in the form of objects, are made av
ailable by various "
members of the system.
Referring riow to the remaining figures, corresponding reference characters
refer to
corresponding elements, wherever possible.
Fig. 3 is a'diagrammatic representation of a system 30 for processing retail
non-cash
transactions in accordance with an embodiment of the present invention. In
Fig. 3, system 30 is
comprised of merchant store 12, payment processing system 16 and transaction
processing
system 26. Located in merchant store 12 is at least one POS device 34 for
capturing transaction
I 5 and customer idezztification data.. Payment processing system I6 utilizes
at least one payment
processing terminal 52 to process purchase transactions. POS device 34
communicates with
transaction processing system 26 over communications link 28 and payment
processing terminal
52 communicates with transaction processing system 26 over communications link
32. While
this specification describes a system wherein POS device 34 communicates
directly with
transaction processing system 26, it is understood that POS device 34 may
actually
communicate with one or more intermediate computers that then communicate with
transaction
processing system 26, without departing from the spirit and scope of this
invention.
Communication links 28 and 32 may be secure, dedicated communications links
(like links 13
and 15 in Fig. 1) or publicly accessible and unsecured.
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A diagrammatic representation of POS device 34 is shown in Fig. 4. POS device
34 is
any device used by merchants at the point of sale to record transactions
bet<veen customers and
merchants, including cash registers, point-of sale terminals, etc. As show,
POS device 34 is
comprised of a conventional microprocessor 36; a random access memory (RAM)
38, an input
device (e.g., keyboard, scanner, etc.) 40, a display or screen device 42, a
mass storage 44 (e.g.,
hard or fixed disk, removable floppy disk, optical disk, magneto-optical disk,
or flash memory)
a network interface card, modem or controller 46 (e.g., Ethernet), and a
merchant transceiver 48.
As shown, the various~components of each POS device 34 communicate through a
system bus
51 or similar architecture. POS device 34 communicates with other POS devices
(not 'shown)
and with transaction processing system 26 via network interface card or modem
46.
Alternatively, the POS device 34 may be connected via an ISDN adapter and an
ISDN line for
communications with the transaction processing system 26. Merchant transceiver
48 provides
wireless communication with a customer transceiver SO (explained below) which
may be carried
by a customer on, for example, his key chain. There may be other components as
well, but these
are not shown to facilitate description of.the unique aspects of this
embodiment of the inveaition.
The hardware arrangement of this computer, as well as the other computers
discussed in this
specification is intentionally shown as general, and is meant to represent a
broad variety of
. architectures, which depend on the particular computer device used. For
example, mass storage
devices depicted with each computer may be co-located with its associated
computing device on
an internal storage device or it may be remotely .located on an external
storage device.
A diagrammatic representation of payment processing terminal 52 is shown in
Fig. 5.
Like POS device 34, payment processing terminal 52 is comprised of a CPU 54,
RAM 56, a
mass storage device 62, and a network interface card or modem 64 for
communicating with
transaction processing system 26. Stored in mass storage device 62 is a
payment database 66 for
authorizing payment in response to consumer transactions.
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A detailed diagram of transaction processing system 26 is shown in Fig. 6. As
shown in
Fig. 6, transaction processing system 26 is comprised of a CPU 86, RAM 88, an
input device 90,
a display or screen device 92, a mass storage device 94, and a net'vork
interface card or modem
96 for communicating with POS device 34 and payment processing terminal 52.
Stored in mass
storage device 94 is a customer information database 100 for identifying a
customer, payment
method, payment processor, and authorization data format when given a
customer/transmitter ID
number. The organization of data inside customer information database 100 may
take on a
variety of physical structures, dependent upon evolving data management
technology.
Examples include, but are not limited to flat files, relational tables, star
tables, hierarchical files,
and objects. The data will be organized so that storage and retrieval of
customer data facilitates
effective navigation, association, and use of customer-related data for
identification, transaction
authorization, customer contact, identification of customer preferences and
other uses of the data
consistent with the spirit and scope of this invention. The database is
structured to provide
maximum security to protect the privacy of customer and merchant information.
The ability to
I5 relate groups of date such as customer data with specific customer
transaction data, for example,
will be controlled via the structure of the data storage design as well as
through controls of the
database system to prevent unauthorized access of detailed and aggregated data
by both internal
and external sources.
As shown in Fig. 6, customer database 100 may be comprised of the fol lowing
categories
of information: customer profile information 102, merchant information 104,
fraud information
106, loyally program information 108, transaction information 110, customer
payment method
information 112, and customer personal information 114. Customer profile
information 102
identifies and describes each customer. It includes, but is not limited to:
customer address data,
phone number, date of birth, Social Security number, spending limits (e.g.,
amount per day,
amount per month, etc.), photograph, password, occupation, PIN, billing
address, primary
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account holder name, authorized user name, customer transceiver activation
status and customer
transceiver identification number. Merchant information 104 identifies and
describes each
participating merchant. It includes, but is not limited to: merchant name,
accepted payment
methods with associated authorization procedures (if appropriate), merchant
location and
merchant identifier. It is important to note that some payment methods (e.g.,
check, credit and
debit) require authorization procedures, while others (e.g., cash, certified
check, etc.) do not.
Fraud information 106 is used to ensure that customer transceivers 50 are not
used by
unauthorized users. This information includes, but is not limited to:
transmission device
identifier, activation status, merchant identifier, merchant location, date of
sale, time of sale and
sale amount. Loyalty program information l Og defines specific merchant
loyalty programs. It
includes, but is not limited to: program rules, specific points or other
benefits for each merchant
loyalty program component. Transaction information 110 includes a listing of
the transactions
previously conducted by a customer using transaction processing system 26, The
information
includes, but is not limited to: transaction type, item purchased, merchant,
date purchased, price,
total price amount, and layalty program usage. Customer payment method
information 112
defines the payment method to be used by each customer at each merchant.
Examples include, '
but is not limited to: default payment method, credit card number, debit card
number, bank
account number, credit/debit card type, credit/debit card expiration date,
name and billing
address for credit/debit card, checking account bank name, checking account
number, bank
routing number, associations between each merchant and each payment method.
Customer
personal information 114 comprises a plurality of individual customer
purchasing preferences
and other customer-unique personal information. For example, suppose the
merchant is Burger
KingTM. The purchasing information could be the customer's favorite meal or
menu item such
that whenever the customer initiates a transactions with the merchant, the
purchasing preference
will automatically be ordered for the customer. Other examples include, but is
not limited to:
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spending limits (e.g., dollar amount per day, amount per year, etc.), whether
the customer wishes
to always use P1N or only for transactions over a certain dollar amo unt,
customer shoe size, suit
size, spouse's birthday, spouse's suit size, etc. Additional information may
be stored in
customer transaction database 100, and the data may be organized in a
different manner, without
departing from the scope of the present invention.
A second embodiment of the present invention is directed to a method and
apparatus for
securely processing financial transactions over the Internet or other
unsecured network. Fig. 7 is
a diagrammatic representation of a system 700 for processing retail, non-cash
transactions in
accordance with the second embodiment. In addition to the elements shown in
Fig. 3, system
700 in Fig. 7 further comprises an online consumer terminal 710 that
communicates with
transaction processing system 26 over communications lime 71 S. Online
merchant 12' replaces
merchant store 12, online merchant computer 734 replaces POS device 34, and
communication
link 28' replaces communications 28 shown in Fig. 3. In this embodiment,
communication limes
28' and 71 S are typically unsecured, publicly accessible links. As in the
case of an embodiment,
1 S conununication links 28', 32 and 71 S may be any combination of publicly
accessible or secure
dedicated links.
The difference between merchant store (Fig. 3):and online merchant 12' is that
merchant
store 12 is a conventional "brick and mortar" store where consumers can
physically select and
purchase merchandise, whereas online merchant 12' is a website operated by a
merchant that
allows online consumers to examine and purchase merchandise over a computer
network.
Online merchant computer 734 is preferably operated by retail establishments
(Macy's, K-mart,
Border's, etc.). Its main role is to collect merchandise orders from online
consumer terminals
710, and arrange for delivery of the merchandise once it receives
authorization from a payment
processing system 16.
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Fig. 8 is a diagrammatic representation of an online merchant computer 734 in
accordance with the present invention. As shown in Fig. 8, online merchant
computer 734 is
comprised of a main memory 800, a display device 810, input device 820, a mass
storage device
840, a CPU 830 and a network interface card or modem 850. As further shown in
Fig. 8, the
mass storage device 840 contains the merchant's product database 845. Product
database 845 is
comprised of information on various merchant products available online. Once a
user accesses a
merchant's home page, he/she will be able to access all of the merchant's
product pages that are
associated with the home page. Individual pages may be sent in the form of
Hyper-Text Markup
Language (HTML) pages across communication link 715 to a web browser 960
operating on a
requesting online consumer computer 710.
As shown in Fig. 9, the online consumer computers 710 preferably include s a
main
memory 900, display device 910, input device 920 such as a keyboard and a
pointing device
(e.g., mouse, track ball, pen, slide pointer or similar device), a mass
storage device 940, a
transceiver 970, a printer 990, and a CPU 930 for performing various functions
related to
I S retrieving and viewing webpages.stored on the Internet. These components
communicate
through a system bus 980 or similar architecture. Additionally, the customer
computer 710 is
preferably connected to a network interface card or modem 950 for
communication with the
transaction processing system 26. The mass storage device 940 of the customer
computer 710
maintains an Internet browser 960 for dit~ecting the CPU.
A second embodiment processes transactions very similarly to the first
embodiment.
That is, an online consumer located at an online consumer computer 710 selects
merchandise;
identifies it to the online merchant computer 734 and inputs his or her
customer/transmitter ID
number using a customer transceiver 50 into transceiver 970. The information
is transmitted
from transceiver 970 via system bus 980 to CPU 930 where it is then
transmitted to the online
2~ merchant computer 734. Upon receiving the data, the online merchant
computer 734 creates anw
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authorization request comprised of the customer ID, a merchant ID and
transaction data, and
then transmits the data to transaction processing system 26. Transaction
processing system 26
then transmits the data to the appropriate payment processing system 16. As in
the case of aii
embodiment, payment processing system 16 authorizes the transaction and then
transmits an
S authorization back to the online merchant computer 734 and online consumer
computer 710 via
the transaction processing system 26. Once the online merchant computer 734
receives the
authorization, merchant's online sales associate prepares the merchandise
identified by the
customer, and then ships it to the address indicated in the customer
information database 100 or
any other location specified by the customer. The transaction processing
system 26 is capable of
managing customer loyalty and consumer trend analysis in the same manner as
the first
embodiment. In fact, since transaction processing system 26 is capable of
interacting with both
in-store and on-line systems, it provides participating merchants the ability
to comprehensively
monitor customer loyalty and consumer purchasing trends for online consumers
and in-store
consumers using a single system.
A third embodiment of the present invention is directed to a method and
apparatus for '
processing retail non-cash transaction at a kiosk or other similar self-
service station. A terminal
located at the kiosk is similar to online consumer computer 710 except that a
product database
similar to that found in online merchant computer 734 is stored in the mass
storage device. In ~'
operation, the customer in merchant store f2 approaches a kiosk in the store,
indicates a food,
merchandise or service selection, and provides a customer/transmitter ID using
input device 920
customer transceiver 50 or a combination of the two. In doing so, the customer
has placed an
order for the desired article of food, merchandise or service and
simultaneously initiated
payment processing. Once the transaction is authorized, a receipt is printed
on printer 990 and
the purchase is delivered to the customer, either at the kiosk or at another
predetermined
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location. This embodiment provides a combination self service, automatic
payment processing
system, with order preparation being the only delay.
In yet another embodiment, a customer may place an order by telephone prior to
arriving
at merchant store .12, by interfacing with an automated system using DTMF
tOlles through the
telephone. That is, when an automated operator at merchant store 12 answers
the telephone call,
the customer is prompted to enter the customerltransmitter ID number and
his/her purchasing
preference via the DTMF buttons. Upon arnval, the customer's food, merchandise
or service is
ready at a drive-through window or inside a special line within merchant store
12. Payment has,
at this time, already been processed. The customer uses customer transceiver
50 to identify
themselves prior to a sales associate providing the merchandise to the
customer. In this
example, customer transceiver 50 is simply used to identify that the customer
receiving the food,
merchandise or services is the customer who corresponds to the
customer/transmitter ID
previously communicated to the merchant through the DTMF system. Different
transactions
may be conducted and different information may be exchanged between the
merchant and
1 ~ customer to confirm the customer's identification without departing from
the scope of the
invention. For example, a customer may conduct a transaction over the
telephone using a
payment method not recognized by the transaction processing system 26, and
then take delivery
of the merc.handise/services after confirming his/her identification using
customer transceiver 50
and paying for the items. Customer transceiver 50 may also be used to confirm
an individual's
identification even in the absence of an underlying transaction. Fox example,
a transceiver 48
may be located adjacent to an airplane loading gate or other restricted access
point. A customer
seeking to gain access to the restricted area simply provides his
identification by interfacing
customer transceiver 50 with merchant transceiver 48. This action initiates
the security process
which may also require an additional form of identification (e.g., picture ID,
boarding p ass, etc.)
to complete. Another embodiment of customer transceiver 50 includes a customer
transceiver
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that identifies a class of persons (e.g., handicapped) such that when a person
interfaces with the '
transaction processing system 26, an attendant will be alerted as to any
special customer needs.
Yet another embodiment includes a customer transceiver 50 that identifies an
individual to a
service provider, permitting the service providing to then access information
about the customer
for the purpose of providing personal services to the customer. A further
embodiment includes a
customer transceiver 50 that transmits automatic teller machine (ATM) card
information to an
ATM. Qnce the ATM receives the information, the customer is prompted to input
his/her PIN
and transaction information, allowing the process to continue as usual.
Various active and customer transceivers (48 and 50, respectively) may be
implemented
in the course of practicing this invention. For example; the TIRIS system
commercially
available from Texas Instruments Corporation is representative of the
technology. Further
details of digital signature transponder (DST) and TIRIS technology are
contained in U.S. Patent
No. 6,541,604 assigned to Texas Instruments Deutsche Line GmBh, the disclosure
of which is
hereby expressly incorporated by reference. A simplified diagram of a
preferred embodiment of
customer transceiver 50 is shown in Fig. 10. As shown, customer transceiver 50
is comprised of
keyboard 1110, CPU 1120, memory 1130, receiver 1140, transmitter 1150 and
security pad
1160. As further shown in Fig. 10, keyboard 1110 is comprised of a plurality
of buttons 1110a -
11101, labeled 0-9, "*", and "#". Each button may correspond to its labeled
number/character, '
or to a selectable user option. For example, button 1110a may correspond to
the number "1"
such that when a user presses if; the number "1" is communicated to CPU 1120.
Button 1110a
may alternatively correspond to a user-specified item (e.g., primary credit
card, a secondary
credit card, or a debit/bank account). In an embodiment, customer transceiver
SO has no
independent batter or other power source, such that operational energy is
received from
transceiver (48 or 970), indicated generally in Figs. 4 and 11, respectively.
Customer
transceiver 50 stores identification information such as a customer ID, or
customer/transmitter
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ID in programmable, read-only memory (PROM) device 1130 for subsequent,
repeated
transmission to a transceiver (48 or 970). Memory device 1130 could optionally
be an erasable
PROM (EPROM) or random access memory (RAM) device, thereby allowing ease in
modifying
the contents of the memory device. As previously states, one important
characteristic of an
embodiment of customer transceiver 50 and merchant transceiver 48 is that
operational energy
for customer transceiver 50 is transmitted from the transceiver (48 or 970).
When customer
transceiver 50 is brought within close proximity to transceiver (48 or 970), a
signal of a desired
frequency passes through receiver 1140, causing it to generate a supply
voltage for powering the
other components of customer transceiver 50. The signal is received by CPU
1120 which then
sends a signal to memory device 1130 and then to customer transceiver 1150 for
transmission to
an adjacent merchant transceiver 48.
Fig. 11 is a detailed flow diagram depicting the operation of customer
transceiver S0.
The process begins at step 1200 when the user brings customer tzansceiver 50
within close
proximity to a transceiver (48 or 970). In step 1205, an interrogation signal
is transmitted from
reader to customertransceiver S0. CPU 1120 processes the interrogation signal
with an
algorithm which is fixedly programmed into memory 1130 (step 1210). If the
signal is valid,
processing flows to step 1215, otherwise processing terminated. In step 1215,
the CPU waits for
user input via keyboard 1110. If the CPU does not receive input, processing
flows to step 1245,
otherwise processing flows to step 1220, where the CPU determines whether the
first character
entered is a "#", corresponding to button 11101. If the first character is a
"#", the CPU transmits
a purchasing preference associated with the entered number (step 1240). As
pzeviously stated,
the customer database 100 is capable of storing a plurality of customer
purchasing preferences,
corresponding to specific items offered by merchant. Pressing "#" prior to
pressing a numbered
key specifies which order item the customer is interested in selecting. For
example, "#1"
corresponds to the first purchasing preference, pressing "#2" corresponds to
the second, and so
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on. Processing then flows to step 1245. If the first character is not a "#",
the CPU determines
whether the first character is a "*", corresponding to button 1110j (step
1225). If the first
character is a "*", the CPU 1120 transmits a payment choice selection
associated with the
entered number (step 1235). The customer must have a valid payment method
associated with
the entered number, and it must be accepted by the merchant. Otherwise, the
process will
terminate without authorizing the transaction. After customer information has
been entered,
processing flows to step 1245 where the CPU 1120 next transmits the stored
customerJtransmitter ID. If the first character is not a "*", processing flows
to step 1230 where
the CPU 1120 sinnply transmits the entered numbers as a customer LD number.
That is, the user
may actually overnde the pre-programmed customer ID number and manually input
a customer
ID number. Processing then flows to step 1250 where the user it prompted to
enter a PIN after
which processing terminates. When the user manually enters a customer ID
number, the system
may also require additional authorizing. uiformation like a photo ID an.d/or a
signature, to fiu-ther
ensure that customer transceiver 50 is not used in a fraudulent manner. While
this specification
describes operation of customer transceiver 50 as including the capability to
specify a
merchandise/service selection, an alternate method of payment, a customer
number or a PIN, it
is obvious that any data or combination oi; data may be transmitted by
customer transceiver 50
without departing from the spirit and scope of this disclosure.
As shown in Fig. 10, customer transceiver 50 may optionally include a security
pad 1160
comprising a fingerprint reader or other biometric recording device. In
operation, when a
customer transceiver SO is issued to the customer and prior to its first use,
the customer inputs a
biometric (fingerprint, palm print, pore print, retinal configuration, etc.)
into security pad 1160.
For the purposes of this discussion, it is assumed that the biometric is a
fingerprint. The first
time that customer transceiver 50 is used, the customer fingerprint is read
and stored in memory
1130 of customer transceiver 50. When customer transceiver 50 is used for
subsequent
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transactions, it will only activate if the same finger is placed upon security
pad 1160, creating a~
match with fingerprint information stored at the first used of customer
transce fiver S0. Of
course, any finger may be used at initial usage, however, the same finger must
then be
consistently used on all subsequent transactions. As an alternative, a
predetermined number of
separate fingerprints maybe stored in customer transceiver 50, permitting its
use by friends or
family members. Initial fingerprints will be read, for example, by depressing
one of four
predetermined buttons prior to first use of customer transceiver 50. A series
of fingerprints is
then placed upon the security pad 1160 for storage within memory 1130 of
customer transceiver
S0. Customer transceiver 50 would then permit subsequent purchases to be made
when a
fingerprint on pad 82 matches any of the fingerprints prestored within
customer transceiver 50.
Fingerprint reading, storing and matching technology is currently available
from the plurality of
sources including, for example, Indicator Technology Corporation, Biometric
Identification Inc:,
and AuthenTec. Even though this specification describes the use of a
fingerprint reader, oL'~er
biometric identification options such as palm prints, pore prints, retinal
configurations, etc. may,
l :i of course, also be implemented using customer transceiver 50. It should
be understood that
while this specification describes a security pad associated with customer
transceiver 50, the
security pad may actually be included in a computer display touch screen.
Another embodiment of customer transceiver SO includes a customer transceiver
with
read/write capability. That is, when customer transceiver 50 is used to
authorize a transaction,
information is passed into memory 1130.from the merchant transceiver 48. For
example, a
predetermined quantity of money may be stored in memory 1130 such that
whenever a
transaction is carried out, the amount of the transaction is deducted from the
total stored in
memory 1130. When the total is exhausted, customer transceiver ~0 will not
activate until an
amount is restored to memory 1130. In another embodiment, a predetermined
quantity of
money may be stored in a host computer as a component of the customer's user
information.
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Customer transceiver 50 may also track the customer's participation in loyalty
programs by
updating memory 1130 with purchase data whenever a transaction is authorized.
In another
preferred embodiment, a purchase transaction is not required to access loyalty
program
information. Customer transceiver 50 may additionally support remote
reprogramming of
memory 1130. In other words, a customer wishing to change the
customer/transmitter ID
associated with customer transceiver 50 may do'so by interfacing customer
transceiver SO with
merchant transceiver 48 and then modifying the customer/transmitter ID by
entering a special
code sequence using keyboard 1110, for example. It is envisioned that whenever
a
customer/transmitter ID is updated by a customer, transaction processing
system 26 will disable
the subject customer transceiver,.pending confirmation of the change. Customer
transceiver SO
may alternatively accept customerltransmitter ID updates from transaction
processing system 26
via merchant transceiver 48 without user input.
Although the described embodiments employ a customer transceiver carried as a
separate
item by the customer, customer transceiver SO may be integrated into another
device. For
example, customer transceiver 50 may be embedded in-a cellular phone, pager,
remote control,
car lock device, personal digital assistant, watch, MP3 player or other
miniature electronic
device. w
While amembodiment of customer transceiver SO envisions a device that receives
operational energy from a merchant transceiver 48 prior to transmitting an RF
signal, it is
understood that any device capable of transmitting a signal across a wireless
medium (e.g.,
cellular, microwave, infrared, etc.) may be utilized without departing from
the scope of this
disclosure.
Fig. 12 shows a detailed diagram of merchant transceiver 48 as previously
discussed
with reference to Figs. 4 and 10. As shown in Fig. 12, merchant transceiver 48
is comprised of a
CPU 1300, memory 1305, keyboard 1310, printer 1320, communication interface
1330, display
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1340, transmitter 1350, and receiver 1360. Keyboard 1310, as further shown in
Fig. 14, is
comprised of a plurality of buttons 1310a - 13101, labeled 0 -9, "*", and "#".
Keyboard 1310
may be utilized for receiving manually entered data (e.g., PIN) and
transmitting the data to
communication interface 1330. In operation, transrnitter 1350 transmits an
interrogation signal
stored in memory 1305 to customer transceiver 50, causing the customer
transceiver to generate
a sufficient supply voltage for powering the customer transceiver. Receiver
1360 receives a
signal from customer transceiver SO and then transmits the signal to
communication interface
1330 for subsequent transmission to an associated POS device 34, online
customer computer
710, kiosk, etc. Communication interface 1330 may comprise a wireless or
wireline interface,
permitting merchant transceiver 48 to communicate with external devices from
widely separated
locations for the purpose of transmitting information received from a customer
transceiver 50
via receiver 1360. Communication interface 1330 fiuther permits merchant
transceiver 48 to
interface over the Public Switched Telephone Network (PSTN) via an. RS232
connection to an
internal modem (not shown). Customer transceiver 50 consequently may be
capable of
1 S interfacing with a central location (over CATV cpaxial) cable such that a
person wishing to
watch a pay-per-viewTM movie can communicate with the pay-per-view system and
purchase the
movie directly through the television. Printer 1320 may be used to print a
receipt for a customer
upon completion of a transaction, and display 1340 may be used to communicate
information to
a customer (e.g., when to input hislher PIN).
An alternate embodiment merchant transceiver includes a merchant transceiver
built into
or attachable to a portable device (e.g., Palm PilotTM, hand-held computer,
etc.) that enables the
capture and transmission of a customer ID and other security information for
authenticating
payment for goods and services via the Internet, or authenticatLng and
authorizing access to
digital information (e.g., movies, music, online books, research) and
applications (e.g.,
voice/mail, personal calendar, "sports entertainment package", golf
handicapping program). A
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further embodiment includes a portable merchant transceiver that allows a
vendor (pizza
delivery person) to authorize transactions from any location. The merchant
transceiver includes
a CPU 1300 with sufficient memory 1305 to capture and locally process a
transaction. The
merchant transceiver may or may not have wireless connectivity to the
transaction processing
6 system 26. yet a further embodiment includes a merchant transceiver
associated with a vending
machine (snacks, cigarettes, stamps, etc.), pay phone, etc. for authorizing
consumer transactions:
As discussed above, the preferred embodiment of the merchant transceiver 48
transmits
power to, and receives~an RF signal from a co-located customer transceiver.
However, any
device capable of receiving a wireless signal (cellular, microwave, infra-red,
etc.) is capable of
functioning in the place of the merchant transceiver without departing from
the scope of this
invention.
In a preferred embodiment, transaction processing system 26 is owned and
operated by a
company separate from the entities that own merchant store 12 and payment
processing system
16. In exchange for the service provided by transaction processing system 26,
merchants are
1 ~ charged fees to process transceiver-based transactions. First, a
transaction fee is charged for
each transaction processed through transaction processing system 26. In
addition, an advertising
fee may be charged to cover brand communication. That is, customer transceiver
SO is supplied
under a brand name owned by the owner of transactions processing system 26.
This brand name
is widely advertised to entice customers to patronize merchant stores 12
having the ability to
conduct transactions using customer transceiver S0. Thus, the owner of
transaction processing
system 26 charges an advertising fee to participating merchant stores 12.
Alternatively, the transaction processing system 26 may permit large
corporations
owning multiple retail outlets to market customer transceiver 50 using their
brand name. Thus,
such merchant companies will "issue" customer transceivers 50 and pay a fee to
the transaction
2~ processing system. The transaction processing system then offsets these
costs to merchant
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stores 12 by providing monthly rebates based on the dollar volume of
transceiver-based
transactions conducted through its outlets.
In another embodiment of the present invention, a system and method are
provided for
interfacing an RF transponder reader carried by a customer, with an RF
transponder associated
with a merchant's point-of sale (POS) terminal or a merchant's product. In
operation, a
customer seeking to purchase retail items or services uses the transponder
reader to read the
transponder associated with the merchant's POS .terminal or the merchant's
product. The
transponder reader is in communication with the central database. The
communication may be
wireless. For example, the communication may occur over a wireless telephone
neh}~ork or
through a networking protocol such as Bluetooth.
In an embodiment of the present invention, the transponder is associated with
a data
entry method and/or apparatus. The data entry apparatus may be inserted or
built into the
transponder unit. Alternatively, the data entry method may be attached to the
same device to
which the transponder is attached. For example, if the transponder is attached
to a keyring, the
data entry method may also be attached to the same keyring.
The data entry method of the present invention comprises entering data to be
read into a
data reader. The data reader comprises means for scanning the data to be read,
a power source
and memory for storing the read data. The data to be read comprises data
associated with a
product(s), service(s), or merchant(s). The data to be read may be found in
any medium capable
of being read by the data reader. For example, the data to be read may be
contained in an
advertisement. The.advertisement may be for a product, service or merchant
advertisement.
The advertisement may be in a newspaper, magazine, Internet website, poster,
or similar .
medium.
The data reader may further comprise means for informing the customer that the
data has
been successfully read and stored. For example, the data reader may comprise a
light, vibration
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unit, display screen, audible tone(s), audible signal(s), printed receipt,
other feedback means, or
a combination thereof, that is activated when data is successfully read and
stored.
In an embodiment of the present invention, the data to be read is associated
with a
discount for a product or service. A customer utilizes the data entry method
to read the data
associated with the discount. The data is stored in association with the
transponder. When the
customer later purchases the product or service, the customer's transponder is
read by the
transponder reader associated with the merchant's POS terminal. The data
associated with the
discount is transmitted to the merchant's POS terminal. The discount is then
applied to the
customer's purchase transaction of the product.
In another embodiment, when the data associated with the discount is
transmitted to the
merchant's POS terminal, the data is then matched with corresponding data in a
central database
or in the merchant's database. This corresponding data informs merchant's
clerk and/or the POS
terminal to provide the discount. The merchant's database may be an off site
central database,
an on-site local database (including an updated database in the POS terminal),
or a distributed
database. In another embodiment, the data associated with the discount is
stored in the customer
transceiver. This data is transmitted to the merchant's POS terminal and
informs the merchant's
clerk and/or the POS terminal to provide the discount. For example, the
Universal Product Code
(UPC) for a product could be stored in the customer transceiver or data reader
memory along
with the discount amount associated with the product. The UPC and
corresponding discount
2~ amount could then be transmitted to merchant's POS terminal.
A discount or offer from a merchant may also be associated with a customer's
user
profile in a central database or in a merchant's database. As discussed, in an
embodiment of the
present invention, an authorization request including transaction data is
received from a POS
terminal by a transaction processing system comprising a customer's user
profile or information.
The transaction processing system determines from the transaction data is the
product or service
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is covered by the discount or offer associated with the customer's user
profile. If the product or
service involved in the transaction is covered, the discount or offer is
communicated to the POS
terminal so that the discount or offer can be applied to the transaction and
communicated to the
customer and/or merchant'.s clerk.
In a further embodiment of the present invention, multiple data may be read by
the data
reader and stored in association with the transponder. For example, data may
be read for
products from the same manufacturer or distributor. Data may be read for
multiple products
offered by the same merchant. In a further embodiment, the data to be read may
be associated
with multiple products offered by a merchant or from a manufacturer. The data
to be read may
also be associated with multiple products offered by various merchants or
manufacturers. For
example, a newspaper may contain an insert containing various coupons or
discount offers.
Data to be read may be associated with all the various coupons or discount
offers on the
newspaper insert. When a customer uses the data reader to read the data, all
the various coupons
or discount offers are stored in association with the transponder. Further,
the data to be read
1 ~ may be associated with all the various coupons or discount offers in a
newspaper section or in
the entire newspaper.
When the data to be read is associated with a coupon or discount offer listed
on an
Internet website, the customer mayread the data with the data reader as
presented on a computer
monitor. Further, a customer may transmit the website data to a computer
printer. The customer
may thereby read the data with the data reader as presented on the printed out
hardcopy of the
website.
The data to be read may comprise text, graphics, numbers, or patterns, or a
combination
thereof, that are capable of being read by the data reader. For example, the
data to be read may
comprise bar codes and the data reader may comprise a bar code reader. The
data reader may be
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capable of reading more than one form of data. For example, the data reader
may be capable of
reading bar codes, text, graphics, numbers, or patterns, or a combination
thereof.
In a further embodiment of the present invention;,the data to be read may be
associated
with a URL address of an Internet website. For example, an article in a
newspaper may
reference an Internet website. The Internet website may be referenced because
it is a topic of the
article or because it provides further background or more in-depth information
related to the
topic of the article. Data to be read corresponding to the referenced Internet
website may be
presented. The data to be read may be at the end of the article, in the
article, or in the margin of
the article. A~ customer may read the data with the data reader associated
with the customer's
transponder. In this embodiment, a transponder reader may be connected to a
computer. The
computer may have access to the Internet. When.the customer's transponder is
read by the
transponder reader connected to the computer, the previously read data
associated with the URL
address may be transmitted to the transporlder reader. The transponder reader
may then transmit
the URL address to the computer and the computer may access the URL address.
'The Internet
1 S website corresponding to the URL address may then be presented to the
customer.
In a further embodiment, a coupon or discount offer may also pxovide a URL
address for
an Internet website where the customer may purchase the product or service
associated with the
coupon or discount offer. Data to be read may be associated with the coupon or
discount and/or
the URL address. The customer may read the data with the data reader
associated with the
customer's transponder. The data may be stored~in association with the
customer's transponder.
The transponder may be read by a transponder reader connected to a computer
with access to the
Internet. The data associated with the URL address is transmitted from the
transponder to the
transponder reader. The Internet website corresponding to the URL address may
then be
presented to the customer. The customer may purchase the product or service
through the
Internet website and may authorize the purchase with the customer transponder.
The data
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associated with the coupon or discount offer is transmitted from the
transponder to the
transponder reader. The data is transmitted from the transponder reader to the
computer. The
computer transmits the data to the Internet website. The coupon or discount
offer associated '
with the data may then be applied to die customer's purchase of the product or
service.
While the data to be read may be associated with a coupon or discount offer,
the data to
be read may also be associated with the identification of a product or
service. When read and
stored, the data may be transmitted to a merchant's transponder reader.
In an embodiment of the present invention, data identifying a product or
service is
presented to a customer. For example, data identifying a movie video may be
presented at the
end of a movie review in a newspaper. A customer may read the data with the
data reader. The
data reader stores the data in association with the transponder. The data ma y
be transmitted to a
merchant's transponder reader. For example, a video rental merchant's
transponder reader may
receive the data stored in association with the customer's transponder which
identifies a movie
video. The video rental merchant may then provide the customer with the movie
video and
1 S authorization for the rental transaction may be provided by the
transponder.
Alternatively, in the above example, the customer may indicate that he/she
does not wish
to rent the identified movie video at this particular time. The identified
movie video title may be
stored in the video rental merchant's database as a "wishlist" item
corresponding to the
customer's transponder. On a subsequent visit to the video rental merchant,
the customer's
transponder may be read by the video rental merchant's transponder reader. The
customer's
"wishlist" corresponding to the customer's transponder may be accessed in the
merchant's
database and the customer may choose to rent a movie video listed on the
customer's "wishlist".
In another embodiment, if the customer indicates that he/she does wish to rent
the
identified movie video, the merchant's POS terminal communicates with
merchant's database or
other database to communicate information regarding the identified movie video
to the
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customer. The information communicated may include, but is not limited to:
whether the movie '
is "in stock" or available, when the movie needs to be returned if rented,
when the movie will be
returned, etc.
In another embodiment, the data to be read may be presented on the product
itself. The
customer may read the data on the product with the data reader and the data
may be stored in
association with the transponder. The data may be transmitted to a transponder
reader and the
product may then be identified to the merchant. Further, the transponder
reader may be
connected to a customer's personal computer. The data identifying the product
maybe
transmitted to the transponder reader which subsequently transmits the data to
the computer.
The computer may transmit the data to an Internet merchant. The customer may
then be
presented with an Internet website where helshe may purchase the product
identified by the data.
For example, a customer may scan household items which will soon be used or
depleted by the
customer. The data corresponding to this shopping list of items is stored in
association with t<'~e
customer's transponder. The data may be transmitted to a merchant or Internet
merchant and the
customer may be given the option to purchase one, some, or all of the items.
Alternatively, the data may be transmitted to a customer's computer printer or
to a home
personal computer associated with a computer printer. The printer may be used
to print a
hardcopy shopping list. In a fiuther embodiment, the data may be transmitted
to a database
which can identify other information that corresponds to the data transmitted
by the customer.
This information may include the name of the items) corresponding to the data,
local stores or
Internet sites upon which the item is available, the store row or product
location withi~~ a store,
item price, etc. This further information or shopping list may also be
transmitted to a customer's
personal digital assistant. The further information or shopping list may also
b a transmitted to a
kiosk at a local store. For example, this kiosk may be on a shopping cart. The
customer may
then have access to the shopping list and further information on the shopping
cart kiosk.
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The transponders utilized by the present invention may be inserted or built
into any
appropriate device or form factor. In this manner, the transponder may be
customized to a
customer's lifestyle and preferences. For example, a transponder may be
integrated into a smart
card with a magnetic stripe. The transponder may be integrated into a soft
fabric form. The
transponder may also be integrated into devices such as a personal digital
assistant, watch, or
mobile phone, or covers for same. The transponder.may also be integrated into
functional
forms, such as a money or tie clip, or clothing button or pin. A customer may
possess more than
one transponder. Different customer profiles or accounts may be associated
with each
transponder. For example, a customer's profile associated with a transponder
in the customer's
mobile phone may be different from the customer's profile associated with a
transponder in the
customer's personal digital assistant. Different customer profiles or accounts
may also be
associated with a single transponder. The single transponder may have means
for a customer to
select between the different customer profiles or accounts. The transponder
may also have
means for a customer to indicate or select between different preferences or
indicate a response to
a question.
In a further embodiment of the present invention, the transaction
authorization further
comprises an additional means of validation. The additional means of
validation may be any
means of identifying the customer as the owner of a transponder. For example,
the customer
may enter a personal identification number (PIN), biometric data, or a
password i1i combination
with use of the transponder. The additional means of validation may be used
with every
transaction, no transaction, or only for predefined merchants, products,
services, transaction
types or amounts. This predefined Iist may be determined by the customer or
the merchant. For
example, if a transaction is over a predefined purchase amount, additional
means of validation
may be required for completion of the transaction. In another means of
validation, the customer
may move the transponder in a predefined manner in front of the transponder
reader to provide
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validation. The movement in the predefined manner is detected by the
transponder reader and
transmitted to the central database for verification. The predefined manner
may be any manual
movement which may be suitably reproduced by the customer. The preference
infortiiation
regarding whether a customer. should be prompted for additional. means of
validation may be
stored in the customer profile contained in the central database. The
preference information
regarding whether a customer should be prompted for additional means of
validation may also
be stored in the transponder itself or in the merchant POS terminal or
database.
The central database may also store a customer's purchase profile. Before
authorizing a
transaction, the central database may analyze the type of purchase for which
payment
authorization is requested. This analysis may utilize. an algorithm to compare
the purchase fox
which payment authorization is requested and the customer's purchase profile.
Based upon the
analysis, further identification or validation may be requested from the
customer; particularly if
the analysis shows a likelihood of fraud.
In a further embodiment, the present invention comprises a system for
associating a
i 5 unique ID code, information regarding a person and payment information for
a person. In one
preferred embodiment, a transponder transmits a unique ID code to a transp
onder readex. The
unique ID code is stored in a central database. Information regarding the user
of the transponder
is entered into the central database and associated with the unique ID code.
Payment
information for the user is entered into the central database and associated
with the unique ID
code. In a further embodiment, the present iiwention comprises a device for
reading a unique ID
code from a transponder, reading payment information from a magnetic stripe of
a credit card,
and associating the unique ID code and the paymentinformation. In a another
embodiment, the
present invention further comprises,means for automatically entering
information regarding a
person. For example, means for automatically entering the information may
comprise optica lly
scanning a person's driver license or reading the magnetic stripe on the back
of a driver license.
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Further, the device may transmit this information to a central database. In
another
embodiment, the payment information may be entered by other means not
utilizing the magnetic
stripe. For example, the payment information may be entered manually using a
keyboard or the
credit card information may be scanned by an optical reader. In another
embodiment, the unique
S ID code from a transponder may be transmitted to a reader which is then
transmitted to a central
database. At a later point in time, the transponder user may transmit payment
information to be
associated with the unique ID. code. For example, the user may enter payment
information
through an Internet website for transmission to the central database or the
user may enter
payment information onto a paper form which is then scanned into the central
database. Once
payment information is received by the central database, it is associated with
the uni que ID code
corresponding to the user.
In a further embodiment, means for identifying the transponder is located on
the outside
of the transponder casing or on the packaging containing the transponder unit
or otherwise
associated with the transponder or on the packaging of or on a device
comprising the
1 S transponder. The means for identifying may comprise, for example, a bar
code or other code
capable of being optically scanned. The packaging may comprise shipping or
merchandizing
packaging. In this embodiment, a central database associates the means for
identifying and the
unique ID code stored in the transponder. User information is transmitted to
the central
database. Payment information for the user is transmitted to the central
database. The central
database associates the means for identifying with the corresponding user
information acrd
payment information for the user. For example, a user may present user
information and
payment information to a merchant. The merchant may or may not utilize a
transponder reader.
The merchant may scan a bar code on the packaging of a transponder. The
merchant transmits
the bar code, user information and payment information to a central database.
The central
2S database matches the bar code to the corresponding unique ID code
associated with the
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transponder. The central database associates the user information anct payment
information with
the unique ID code corresponding to the bar code. In this manner, the merchant
does not need to
utilize a transponder reader to enroll a user in the system and method of the
present invention.
A customer transponder, transceiver, or user profile may be associated with
more than
one manner or method of payment. The customer may input preferences or
indicate a default
payment method to be used depending on transaction type, merchant or purchase
amount. The
payment methods may include, but are not limited to, at least one of the
following: credit card,
debit card, ATM card, or bank account.
The customer transponder or transceiver can be associated with two or more
different
networks or host systems. If a merchant's transceiver reader is presented with
a customer
transponder that is not currently enrolled or activated for the host network
associated with the
merchant's reader, then the reader may receive the customer's unique ID code
or transmitter
code stored in the customer's transponder. The code is transmitted to the
merchant's host
computer along with the customer's payment and identification information. The
customer's
identitcation information may be transmitted electronically derived such as
from a magnetic
stripe of a credit/debit card or a driver's license. Or the indentification
information may be
submitted separately. In a preferred embodiment, at least one payment meth od
is transmitted to
the host computer with the unique ID for the transponder. The merchant may
provide~to the
customer a paper form to be completed by the customer to provide the name of
the customer,
address, phone number, credit card number, debit card number, or other payment
or customer
information. The form may also comprise a preprinted or otherwise applied bar
code or other
identifying code, This identifying code may be transmitted to the host
computer with the unique
ID and payment information. When the information from the form is manually
entered or
optically scanned by a computer, the information may be identified by the
identifying code and
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more efficiently matched with the corresponding unique ID and payment
information. All this
information may then be stored together in the host computer.
In another embodiment of the present invention, a user's unique ID code stored
in the
user's transponder may be associated with a second transponder. A customer
profile stored in
the central database which corresponds to a user's unique ID code may also be
associated with a
second transponder. The second transponder may be utilized in the system and
method of the
present invention. Transactions completed with the second transponder may be
compiled and
presented to the user separate from the transactions completed with the user's
transponder. A
different form of payment may also be associated with the second transponder
than the payment
information associated with the user's transponder.
For example, a user may rent a car fox use on a business trip. The user
presents his/her
personal transponder to a rental car agency. The rental car agency associates
the user's
transponder with a second transponder. The second transponder may also be
associated with a
customer profile which the user utilizes with the rental car agency, The
second transponder may
comprise a transponder contained in the key associated with the rental car or
a~transponder
associated with the keyring of the key associated with the rental car. The
user may make
purchase transactions with the second transponder. The second transponder may
utilize the
payment information associated with the user's personal transponder or it may
utilize different
payment information. The permitted uses of the second transponder can be
restricted according
to the preselections of the user car in the case of business travel,
preselections by the business for
its employees as communicated to the rental car agency in its stored profiles
for the business'
employees. For example, the second transponder could utilize a user's personal
credit card or it
could be associated instead with a user's business expense credit card. When
the user returns
the rental car to the rental car~agency, the user is presented with a receipt.
The receipt may .
?5 contain all transactions made with the second transponder, as well as the
car rental transaction.
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In this example, a user may more easily itemize business expenses at the end
of a business trip.
In a further embodiment, the second transponder is on the same keyring as the
ignition key for
the rental car. In an further embodiment, the second transponder or the
ignition key is
detachable from the keyring. In this manner, when the user provides the
ignition key to a third
person (e.g., parking attendant, valet, etc.), the third person does not have
access to the second
transponder. '
In a further embodiment of the present invention, the customer transponder may
be used
to obtain access to a hotel room. In one embodiment, a customer wishing to
obtain a hotel room
may present his personal transponder to a transponder reader. Authorization
for the transaction
is obtained using the system and method of the present invention. Upon
obtaining authorization,
the customer is given the key for a hotel room. The customer may be given the
key by a hotel
agent, such as a desk clerk. Alternatively, the customer may be given the key
automatically by a
self service check-in kiosk containing a transponder reader. -In this
embodiment, if the room k ey
does not display the room number, the kiosk may print out the room number. The
kiosk may
1:S also print a receipt for flue transaction. In an alternative embodiment,
the customer is not given a
separate key for a hotel room. Instead, the customer's transponder is
associated with a hotel
room. The hotel room door contains a transponder reader. The hotel room door
transponder
reader reads the customer's transponder and unlocks the door accordingly.
In a further embodiment, the present invention comprises a system and method
for
restaurant transactions. In an embodiment of the present invention, a customer
orders food and
payment for the food is authorized using the previously described system and
method for
authorizing transponder transactions. The customer may order the food through
a restaurant
employee. Alternatively, the customer may select a food order using a self
service kiosk or by
pushing buttons on the ordering system normally utilized by employees. In a
further
embodiment, a customer may order food prior to arriving at the restaurant. The
customer may
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order via automated telephone selection, Internet website or other suitable
means for ordering
food. Upon arnving at the restaurant, the payment for the previously ordered
food is authorized
using the customer transponder. A customer profile may store a customer's
preferred food
order. Upon arriving at the restaurant, a cusxomer's transponder is read by a
transponder reader.
The preferred food order stored in the customer's profile is automatically
selected and ordered.
Upon ordering food, a customer may wait at an order counter for delivery of
the food.
Alternatively, a customer may sit at a dining table. The dining table may have
a transponder
reader. The customer's transponder is read by the dining table transponder
reader. The dining
table transponder reader communicates the customer's dining table location to
a restaurant
employee. The restaurant employee may then deliver the customer's food to the
dining table at
which the customer is seated. Alternatively, a customer profile may store a
customer "will call"
name or nickname. This "will call" name or nickname may be communicated to a
restaurant
erf~ployee. Upon hearing the "will call" name or nickname, the customer would
know that the
food order is prepared and may receive the food at a designated order pick-up
site.
Alternatively, a preferred food order is stored in a customer's profile. When
a customer enters a
restaurant, rather than ordering at an order counter, the customer may sit at
a dining table. The
dining table may have a transponder reader. The customer's transponder is read
by the dining
table transponder reader. The preferred food order stored in the customer
profile and the
customer's dining table location are communicated to the restaurant. The
customer's preferred
food order may be delivered to the customer's dining- table location.
In a further embodiment, a customer places a food order prior to arriving at a
restaurant.
This food order.may be made using any suitable means. For example, the food
order may be
placed through an Internet website, a telephone call, mobile telephone call,
or mobile telephone
Internet connection. Upon arriving at the restaurant, the customer parks
his/her car in one of a
number of designated restaurant parking spaces. A transponder reader is
associated with the
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parking space. The customer's transponder is read by the transponder reader.
The transponder
reader communicates the customer's parking space location to a restaurant
employee. The
restaurant employee may deliver the food order to the customer at the
customer's parking space.
Alternatively, a customer may place an order while at a designated restaurant
parking space. For
example, when the customer's transponder is read by the transponder reader
associated with the
restaurant parking space, a preferred food order stored in a customer profile
is communicated to
the restaurant. The preferred food order is delivered to the customer's
parking space.
The aforementioned embodiments specifically involving restaurant ordering and
payment have several advantages over current systems and methods. For example,
a customer
does not need to wait in line to place an order. All customers may order
concurrently and
simultaneously. Further, in some embodiments, restaurant employees do not have
to be trained
to take customer orders or even speak the same language as the customer order
is automated or
performed directly by the customer.
A customer profile may store data regarding customer preferences. This
customer
profile may be stored in a central database. Customer preferences rnay include
whether a
customer wishes to receive a receipt far purchases and what type of receipt
the customer wishes
to receive. For example, a customer may prefer to receive a receipt after each
transaction or for
certain transactions over a predefined purchase amount. AIternativeiy, a
customer may prefer
not to receive a receipt after each transaction. Instead, a customer may
prefer to receive a daily
e-mail communication detailing purchases made within the past 24 hours.
In an embodiment of the present invention, loyalty points are accumulated by a
customer
based on transactions and associated with the customer in a central database.
When sufficient
loyalty points have been accumulated, a customer may be offered a loyalty
award from a
merchant. This loyalty award may be a free or reduced price good or service.
Alternatively, the
loyalty award may be a credit or discount on a future transaction with the
merchant. A
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customer's loyalty award qualification may be communicated to a merchant
employee at the .
customer's next purchase. Alternatively, a customer may receive notification
of the loyalty
award via e-mail, telephone call or by accessing a customer account on an
Internet website. The
customer may be provided means for identifying the loyalty award qualification
to a merchant.
For example, a special loyalty award code or coupon may be given to the
customer or printed
from an e-mail or website. Alternatively, loyalty award qualification may be
embedded in the
customer's transponder. When the customer's transponder is subsequently read
by a merchant
transponder reader, the loyalty award qualification is then communicated to
the merchant by the
transponder reader.
In a further embodiment, the present invention may be used to gain access to a
service or
event. For example, in this embodiment, a customer may purchase a ticket and
the ticket
purchase is associated with the customer in a central database. The customer's
transponder
unique code or other means for identifying the customer's transponder are
communicated to the
event location. The customer's transponder is read by a transponder reader at
the event location.
The customer's transponder is recognized as being associated with a customer
that has
previously paid for a ticket or tickets. A corresponding receipt, ticket stub,
or seat assignment
may be printed for the customer. However, a receipt, ticket stub, or seat
assignment are not
necessary as the transponder serves as the identification that the customer
has paid for access to
the event or service.
In a further embodiment of the present invention, a customer's profile may
store
preferences regarding certain types of purchases. For example, a customer's
profile may only
authorize transactions made within a certain geographic area, at a certain
type of merchant, for
certain types of products, or within a particular transaction price range.
It should be noted that, while many of the above.~disclosed emb odiments and
examples of
the present invention specify a transponder device, the present invention is
not so limited. The
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present invention does not require a transponder. For example, if a merchant
does not utilize a
transponder reader, a customer may provide other means for communicating the
unique ID code
stored in the customer's transponder. This other means may comprise
information stored in the
customer profile that is unique to the customer: For example, the customer may
provide a PIN,
biometric data or knowledge specific to the customer. This information may be
communicated
directly to the central database without allowing access by a merchant agent
to the information.
A preferred method for processing a financial transaction will now be
described in
conjunction with Figs. l3-17. As described above, the system 10 is operative
for capturing a
customer's transmitter ID at a POS device 34; combining the captured data with
the merchant ID
and the customer's selected purchase items into an authorization request,
encrypting at least a
portion of the request (if desired), and transmitting it to transaction
processing system 26. Once
it receives the authorization request, the transaction processing system 26
identifies the
appropriate payment processing system 16 and then transmits the customer's
payment data and
the transaction data to the payment processing system 16 for authorization.
After the payment
I S processing system 16 authorizes the transaction, it transmits an
authorization code back to the
merchant via the transaction processing system 26. The transaction processing
system 26 may
also transmit customer identification and purchase data upon request by a
participating
merchant. In addition to its function of authorizing retail transactions,
transaction processing
system 26 also collects the transaction data for later use in compiling
consumer purchasing trend
data and tracking a consumer's progress in a merchant's loyalty program.
Fig. 13 is a flow diagram illustrating a .preferred method 200 for processing
financial
transactions. The steps that comprise the method described in 200 are carried
out by the various
equipment that form a part of system 10 for processing financial transactions.
The method
begins at step 300~with the customer accessing the enrollinent subsystem of
the transaction
processing system 26. This step includes all the activities that must take
place before an
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individual can consummate retail transactions with customer transceiver 50
using transaction
processing system 26. After the customer is enrolled, processing flows to step
400 and the
system then is capable of processing a customer transaction. At a
predetermined time interval,
preferably every 24 hours, processing then flows to step 500 where system 10
updates customer
preferences and profiles and settles charges for the time period. Next
processing flows to step
600 at which time system 10 performs the processing necessary to archive
captured data and
update loyalty program data.
Fig. 14 is a detailed flow diagram depicting the steps performed by system 10
in step 300
of Fig. 13. As shown in Fig. 14, the process begins in step 310 when a
customer accesses the
enrollment subsystem of the transaction processing system 26 for the purpose
of opening an
account. The act of accessing the enrollment subsystem of transaction
processing system 26 can
be performed any number of ways from simply telephoning a human customer
assistance
representative and verbally communicating the information over the telephone,
to dialing a
telephone number and interfacing with a computer using dial tone mufti
frequency (DTMF}
1 S tones, to logging onto the Internet and accessing a predetermined uniform
resource locator
(URL). Once the customer is logged onto the system, processing flows to step
320 and-the
enrollment subsystem of transaction processing system 26 prompts the user to
enter customer
information. During this process, the customer provides customer profile
information 102,
customer payment method information.11~2, and customer personal information
114. These data
are used for communicating with the customer and may be combined with other
data (e.g.,
transaction information 110, customer personal information 114, etc.) to
provide special
promotions of particular interest to the customer. During enrollment, the
customer also provides
the payment methods to be invoked by the transaction processing system 26,
whenever he/she
initiates a transaction. For example, a customer will provide credit, debit,
and other payment-
related data so that the customer may be properly charged for purchases. When
the customer
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enters data in the customer transaction database 100, helshe may select any
one of the
merchant's accepted payment methods in which helshe also has accounts. That
is, the customer
may choose to have all of his transactions conducted in merchant #1's retail
establishments
allocated to his VISATM card even though he has several other cards that are
also accepted by
merchant #1. Alternatively, the customer may specify that his: transceiver-
based~transactions
will be processed and paid through his bank credit or debit card..
Furthermore, the customer may
specify that all transactions at merchant #1 will be cash transactions,
despite the fact that the
customer also has credit accounts accepted by merchant #1. The number of
merchants
associated with each customer record in customer transaction, database 100
depends on the
number of merchants entered into the system by a particular customer. In other
words; customer
#1 may have two merchant entries, corresponding to the number of merchants
that the customer
frequents, whereas customer #2, who is less debt averse may have 20 merchant
entries.. It is
important to realize that certain information must be entered in order for the
system to operate
properly (e.g., name, address, PIN, etc.), and other information can be
entered at the discretion
of the customer (e.g., marital status, birth date, etc.). Then enrolling, the
customer is informed
that not only is the input of certain information discretionary , but that
they can restrict the
publication and use of the information by the transaction processing system
26.
Customers may also identify a default payment method to be applied to a
participating
merchant for which no other payment method has been i dentified. This default
payment method
would also be applied to new merchants that join the transaction processing
system 26 after the
customer enrolled. Part of the enrollment process includes the customer
providing customer
personal information such as preferred product brands at different merchants,
anniversary and
other important dates, clothing sizes, etc. As explained below, all of the
data provided by the
customer during the enrollment process can be later changed at the customer's
discretion. A
customer can request more than one customer transceiver 50 to be associated
with each account
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as well as identify other authorized users for each customer transceiver. The
rules for use of
multiple customer transceivers 50 by multiple individuals are controlled based
on the rules of
the payment processor 16.
Once the customer has entered the requested information, system 26 validates
the
payment methods selected by the customer for legitimacy and acceptance. This
process is
carried out by comparing user-inputted information with data stored in payment
processing
terminal 52. Once the data is determined to be valid, processing flows to step
345 and the data
is stored in customer information database 100. A customer transceiver 50 is
programmed with
the customer's ID number in step 370, the customer transceiver 50 is mailed to
the customer in
step 380. Before the customer can use customer transceiver 50 to authorize a
transaction,
customer transceiver 50 must be activated by the customer. This security pr
ocess helps ensure
legitimate use of the customer transceiver 50 by authorized personnel. In a
preferred
embodiment, customers activate customer transceiver 50 using identification
information
provided by them during enrollinent and information provided to them in the
device package.
1 ~ Once customer transceiver 50 is activated, it can be used by a customer to
activate a transaction.
If the data is invalid, the system prompts the user to correct the invalid
information and
processing is routed back to step 320 where the customer is prompted to re-
input the invalid
information.
Fig. 14b illustrates a further preferred embodiment of step 300 of Fig. 13. As
shown in
Fig. 14b, the process beings in step 1405 when a customer presents a customer
transceiver to a
merchant reader or POS terminal. A transmitter ID or code is transmitted from
the transceiver to
the reader or POS terminal. In step 1410, the customer provides at least one
method of payment
and additional information corresponding to the at least one method of
payment. In step 1415,
the customer supplies additional customer identification. This inforniation
may include, for
example, customer name, account password, PIN, mailing address, email address,
daytime
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telephone number, evening telephone number, date of birth, Social Security
number, driver's
license number, spending limits, PIN usage preferences, photograph of
customer, etc. In step
1420, the transmitter ID is associated with the additional customer
identification. In step 1425,
this transmitter ID is transmitted to a host transaction processing system or
database along with
S the associated payment and customer information. In step 1430, the host
transaction processing
system determines whether the payment information supplied by the customer is
valid and
authorized for purchase transaction. If any payment information is invalid or
not authorized for
purchase transactions, the process flows to step 1435 and the customer is
requested to provide
further or corrected payment information. If the payment information is valid,
then the process
flows to step 1440. In steps 1440 and 1450, the payment and customer
information is stored in
association with the transmitter ID in a database utilized by the transaction
processing system.
The process may include merchant validation of the additional customer
information (e.g., by
comparing a photographic identification on a driver's license with the
presenting customer).
The process may continue, as shown in step 1450, the customer wishes to then
make a
purchase with the newly enrolled customer transceiver. If the customer does
not want to make a
purchase, the process terminates. If the customer wishes to make a purchase,
the process flows
to step 1455. In step 1455, the customer presents the product or se rvice
desired for purchase. In
step 1460, the merchant enters the transaction data for the product or service
into merchant's
POS terminal. In step 1465, an authorization request is transmitted to the
transaction processing
system by the POS terminal. The customer does not have to re-present the
customer transponder
to the POS terminal as the transmitter ID is already registered with the POS
terminal from the
enrollment process. Fronr step 1465, the authorization request follows the
methods and
processes disclosed and discussed. elsewhere in this specification.
Fig. 15 is a detailed flow diagram depicting the steps performed in step 400
of Fig. 13.
2~ As shown in step 410, the first step occurs when a customer shopping in
merchant store 12
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identifies merchandise for purchase to a sales associate. Next in step 415,
the sales associate
utilizes input device 40 of POS device 34 to enter the merchandise into CPU 36
which then
computes a transaction amount. .After reviewing the transaction record, the
customer i n step 420
identifies him/herself to system 26 by interfacing customer transceiver 50
with merchant
transceiver 48. Customer transceiver 50 consists of an.electronic
transmitter/receiver
combination including a unique customer/transmitter ID number programmed
therein. When
customer transceiver SO interfaces with merchant transceiver 48, a customer
identification signal
including the unique customer/transmitter ID number is transmitted to merchant
transceiver 48.
To provide security, merchant transceiver 48 and customer transceiver SO
employ technology in
which an interrogation signal is transmitted from merchant transceiver 48 to
customer
transceiver 50. customer transceiver 50 processes the interrogation signal
with an algorithm
which is fixedly programmed into customer transceiver 50 and then transmits a
response back to
merchant transceiver 48, consisting of a customerltransmitter ID number. The
interrogation
signal and the response signal are highly encrypted such that intense
processing power over a
long period of time will be necessary to fraudulently extract the unique
customer/trar~smitter ID
number from the customer transceiver S0.
Once merchant transceiver 48 receives the customer/transmitter ID number, it
transmits
the data, together with the specifics of the retail transaction (cost,
identification of merchandise,
etc.) over communications link 28 to transaction processing system 26 (step
425). An important
feature of system 10 is that the customer's credit card is never exchanged
with a sales associate.
Therefore, the possibility that the card will be fraudulently used by an
unscrupulous sales
associate does not arise.
An alternate embodiment of the present invention includes a system 26 that
instead of
transmitting a customer's credit card number across communication limes (Figs.
3 and 9), only
transmits a customer/transmitter ID across communication links. In this
embodiment, payment
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processor 16 maintains data that provides a correlation between
customer/transmitter ID
numbers and payment methods. Also, merchant store 12 creates a transaction
record based
using the customer/transmitter ID number instead of the credit/debit card
number. In operation,
when an authorization request is transmitted to transaction processing system
26 from a
merchant store 12, transaction processing system 26 processes transactions by
matching the
customer/transmitter ID number with data stored in customer information
database 100. After
the system identifies the customer ID (step 435),~it links it to the
customer's name (step 445) and
then to the transaction information (step 450). If the system does not find
the customer ID in
step 435, it transmits a message to the merchant informing it that the
customer is attempting to
utilize an invalid customer transceiver (step 440). If the system finds the
customer ID in step
435, it may simultaneously authorize the retail transaction, pending final
authorization by the
payment processor 16. That is, at the same time as the rest of the
authentication process is
occurring, the system may authorize the initiation of delivery of the desired
goods services. For
example, during an automobile refueling process, the system will activate a
fuel pump,
1 S minimizing the customer's delay even though final approval has not yet
been obtained. If in
step 460, the system finds the merchant's name, it identifies the customer's
payment method for
that particular merchant (step 470) and determines the flow and destination of
the authorization
data, based on the type of transaction (credit, debit, cash, etc:). Security
information may also be
utilized by the transaction processing system 26 to reduce misuse of customer
transceiver 50.
Examples of controls include but axe not limited to checking the frequency of
use of a particular
customer transceiver 50 within a certain period of time, frequency of use a
customer transceiver
50 within certain financial limits and frequencyof use of customer transceiver
SO and financial
limits within a specific geographic region.
In the event that the transaction requires authorization, such as in a credit
card
transaction, the merchant POS device 34 communicates with transactions
processing system 26
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as described above to identify the correct payment processor 16 and transmit
the transaction.
request to that payment processor for disposition. If the transaction is
authorized in step 484, the
system next in step 488 determines whether the customer is entitled to any
frequent customer, or
loyalty awards by comparing the customer's transaction activity stored in
transaction
information 110 with the loyalty program information 108. The authorization
and the award
data (if any) are transmitted to the merchant via the transaction processing
system 26 (step 490)
and in step 492, the customer is given his merchandise or services and
notified of hisllier award.
In step 494 the transaction processing system 26 archives the transaction data
in secondary
storage device 94 for later analysis. If for some reason the payment
processing system 16 is not
able to process this particular transaction due to, for example,
communication's difficulties or a
transaction amount causing the customer to exceed his credit limit, a message
is transmitted to
the merchant via the transaction processing system 26 in step 486 that the
transaction is not
authorized and the in-progress delivery of merchandise (e.g., gasoline) is
immediately
discontinued. The sales associate is then notified in a well-known manner to
ask the customer
for an alternative method of payment and processing terminates. While this
specification
provides that the transaction terminates when the payment method cannot be
authorized, there
are several other alternatives that can be implemented without departing from
the scope of the
present invention. For example, if the payment method does not work, it is
possible that an
alternate could be requested by the system and utilized.
If the transaction does not require authorization (i.e., cash or other liquid
asset is used),
POS device 34 still communicates with transaction processing system 26 to
provide transaction
information 110 and loyalty program information 108 to custanzer information
database 100 and
to determine whether the customer is entitled to a loyalty award.
A customer may also utilize transaction processing system 26 to conduct
inquiries into
the customer's progress toward fulfilling the requirements of a particular
loyalty program. To
CA 02438490 2003-08-13
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initiate the request, the customer accesses the transaction processing system
26 as mentioned
above (i.e., by telephoning a human customer assistance representative and
verbally
communicating the request over the telephone, or. dialing a telephone number
and interfacing
with a computer using DTMF tones, or logging onto the Internet and accessing a
predetermined
URL), and then communicating his/her request.
Fig. 16 is a detailed flow diagram depicting the steps performed in step 500
of Fig. 13.
In a preferred embodiment, customers can update information contained in the
customer
information database 100 by following the same process utilized when the
information is first
communicated to the system. The reason for the update can range anywhere from
changed
circumstances (customer address, status change, etc.) to changing preferences
with respect to
specific merchants to adding new merchants for customer. Data security
controls are utilized to
ensured that only' legitimate customers can access and modify their profile
data. To preclude
customer updates from interfering with the operation of the system, it is
envisioned that
transaction processing system 26 will update customer information database 100
at
predetermined times during the day, preferably during off-peak usage times. As
shown in step
S 10, transaction processing system 26 periodically retrieves updated customer
profile data from
an online memory location (RAM 88, or secondary storage device 94). In step
520, the
transaction processing system 26 reconciles merchant accounts. That is, the
system aggregates
merchant sales, credits merchants and payment processors when appropriate and
then presents
invoices to each merchant and payment processor, based on sales activities.
Customer profile
information 102, merchant information 104, transaction information 110, and
customer payment
method information 112 are used to determine the fees to be paid to each
entity (merchant store
12 and payment processor 16, and transaction processing system 26, as
appropriate.). Once the
information is aggregated, the transaction processing system 26 updates
customer profile data
(step 530).
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The process depicted in Fig. 16 does not include the process performed when a
user
seeks to have his/her transponder activated due to it being lost or stolen. In
this case, the
database will be immediately updated in order to preclude fraudulent use of
the transponder by
unauthorized personnel.
Fig. 17 is a detailed flow diagram depicting the steps performed in step 600
of Fig. 13.
The transaction processing system 26, as shown in step 610, periodically
retrieves raw
transaction data from secondary storage device 94. This retrieval can be
performed at a
predetermined time each day, or it can be performed shortly after the
transaction is completed.
In any event, the raw transaction data consists of customer profile
information 102, merchant
information 144, loyalty program information 108, transaction information 110,
and customer
personal information 114. This data is collected and analyzed for different
purposes such as
determining the effectiveness of the transaction processing system 26,
refining and deve loping
new, related products, and developing, tracking and analyzing loyalty programs
and special
promotions that are of specific interest to transaction processing system 26
customers and
merchants. In addition, the information may be sold to merchant co mpanies 12
and payment
processing systems 16 to provide personalized service to individual customers.
It is expected
that merchant companies would pay for data from transaction processing system
26 based on
volume or a per project basis. In step 620, the transaction processing system
26 updates loyalty
data and in step 630, the updated information is transmitted to merchants who
desire the
additional data customer transaction data with demographic data that may be
used to track
customer purchasing trends.
Although the present invention has been described in terms of particularly
preferred
embodiments, it is not limited to these embodiments. Alternative embodiments
and
modif cations which would still be encompassed by the invention may be made by
those ski lied
in the art, particularly in light of the foregoing teachings. Therefore, this
invention is intended to
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cover any alternative embodiments, modifications or equivalents which may be
within the spirit
and scope of the invention.
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