Persistent dynamic payment service

• US 7,225,156 B2
• Filed: 01/29/2002
• Issued: 05/29/2007
• Est. Priority Date: 07/11/2001
• Status: Expired due to Fees

• Current Assignee: Douglas C. Fisher
• Original Assignee: Douglas C. Fisher
• Inventors: Fisher, Douglas C., Lo, Kenny
• Primary Examiner(s): Trammell; James P.
• Assistant Examiner(s): Badii; Behrang
• Application Number:
  US10/066,174
• Publication Number:
  US 20030126094A1
• Time in Patent Office: 1,946 Days
• Field of Search: 705/40, 705/39, 705/44, 705/75, 705/42, 455/410, 713/153, 235/379, 709/217
• US Class Current: 705/50
• CPC Class Codes: G06Q 20/02 involving a neutral party, e.g. certification authority, notary or trusted third party [TTP]
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• CPC Class Codes: G06Q 20/12 specially adapted for electronic shopping systems
• CPC Class Codes: G06Q 20/24 Credit schemes, i.e. "pay after"
• CPC Class Codes: G06Q 20/26 Debit schemes, e.g. "pay now"
• CPC Class Codes: G06Q 20/385 using an alias or single-use codes
• CPC Class Codes: G06Q 20/401 Transaction verification

Abstract

The invention comprises online methods, systems, and software for improving the processing of payments from financial accounts, particularly credit and debit card payments made from consumers to merchants in online transactions. The preferred embodiment of the invention involves inserting a trusted third party online service into the payment authorization process. The trusted third party authenticates the consumer and authorizes the proposed payment in a single integrated process conducted without the involvement of the merchant. The authentication of the consumer is accomplished over a persistent communication channel established with the consumer before a purchase is made. The authentication is done by verifying that the persistent channel is open when authorization is requested. Use of the third party services allows the consumer to avoid revealing his identity and credit card number to the merchant over a public network such as the Internet, while maintaining control of the transaction during the authorization process.

Claims

1. In a method of making a payment from a payer to a merchant over a public computer network of the type where the payment involves the merchant accepting a proposed payment in the form of an account number having a standard syntax from the payer at completion of a purchase, followed by the merchant requesting an authorization for the proposed payment from a financial institution, the improvement comprising the following acts:

a) providing a trusted third party on line service which is accessible on the public computer network and which has access to an inter-bank computer network;

b) the trusted third party on line service allowing a persistent channel to be established with the payer prior to completion of the purchase with the merchant, wherein the persistent channel is a two way electronic communication between the payer and the trusted third party, which is different from a channel used to communicate with the merchant, and which once opened is available for communication and verification until terminated;

c) the trusted third party on line service obtaining a valid account number of the payer and authenticating the payer, wherein the valid account number is in the standard syntax;

d) the trusted third party service examining the valid account number prior to completion of the purchase;

e) if the valid account number does not contain a routing code which will direct it to the trusted third party on line service, then the trusted third party service assigning an alternative account number to the payer for a transaction, said alternative account number comprising a routing code which will cause the transaction to be routed to the trusted third party on line service when submitted by the merchant for authorization;

f) if the payer requests an alternative account number when the persistent channel is established, then the trusted third party assigning an alternative account number to the payer comprising a routing code which will cause the transaction to be routed to the trusted third party online service when submitted by the merchant for authorization;

g) the trusted third party on line service receiving the proposed payment submitted by the merchant;

h) the trusted third party on line service verifying that the persistent channel with the payer remains available after receipt of the proposed payment;

i) if the channel is not available, the trusted third party on line service issuing an instruction on the inter-bank network to decline the proposed payment with the merchant; and

j) if the channel is available, the trusted third party on line service issuing an instruction on the inter-bank network to complete the proposed payment with the merchant from the valid account, whereby the payer is authenticated and the proposed payment is authorized, if at all, in a single integrated process conducted without the involvement of the merchant based on the persistent channel between the trusted third party on line service and the payer.

2. The improvement of claim 1 wherein the improvement further comprises the act of optionally contacting the payer over the persistent channel to obtain additional information.

3. The improvement of claim 2 wherein the trusted third party online service comprises a portal accessible on the public computer network through which the persistent channel may be established using a network accessible device.

4. The improvement of claim 2 wherein the trusted third party online service further comprises a telephone connection through which the persistent channel may be established.

5. The improvement of claim 2 wherein the transaction is an e-commerce transaction on the network, and wherein the transaction takes place between the payer'"'"'s network accessible device and the merchant'"'"'s world wide web site on the network.

6. The improvement of claim 4 wherein the purchase involves personal contact between the payer and the merchant.

7. The improvement of claim 1 wherein the trusted third party online service is the issuer of the account having the valid account number.

8. The improvement of claim 2 wherein the trusted third party service comprises an instant message system and the persistent channel is established over the instant message system.