Method and system for completing a transaction between a customer and a merchant

• US 7,890,393 B2
• Filed: 02/07/2002
• Issued: 02/15/2011
• Est. Priority Date: 02/07/2002
• Status: Active Grant

• Current Assignee: PayPal, Inc. (PayPal Holdings, Inc.)
• Original Assignee: eBay Inc.
• Inventors: Hirschfeld, Daniel A., Talbert, Vincent W., Keithly, Thomas H., Lavelle, Mark L.
• Primary Examiner(s): Kramer; James A
• Assistant Examiner(s): Fu; Hao
• Application Number:
  US10/470,223
• Publication Number:
  US 20040078328A1
• Time in Patent Office: 3,295 Days
• Field of Search: 705/26, 705/35, 705/39, 705/38, 705/17, 705/44
• US Class Current: 705/35
• 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 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 20/12 specially adapted for electronic shopping systems
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

A computer-implemented method and system for completing a transaction between a customer (10) and at least one merchant (20), including the steps of: (a) initiating a transaction by the customer (10) with a merchant (20); (b) communicating an authorization request, including customer data and transaction specific data, by the merchant (20) to a transaction system (26); (c) authenticating the customer (10) by the transaction system (26); (d) authorizing the transaction by the transaction system (26); (e) communicating the authorization response by the transaction system (26) to the merchant (20); and (f) completing the transaction between the merchant (20) and the customer (10). An apparatus for implementing the method is disclosed.

Claims

1. A computer-implemented method for completing a transaction between a customer and at least one merchant, comprising the steps of:

receiving, by a transaction system, an authorization request including customer data and transaction specific data from the merchant, wherein, prior to the authorization request, the customer is unknown to the transaction system;

authenticating the customer by the transaction system based at least in part upon at least one of the following;

at least a portion of the customer data, at least a portion of the transaction specific data or any combination thereof;

authorizing the transaction by the transaction system based at least in part upon at least one of the following;

at least a portion of the customer data, at least a portion of the transaction specific data or any combination thereof;

communicating the authorization response to the merchant;

establishing a customer account on the transaction system; and

creating a customer-specific authorization key that is unknown to the customer and privately held between the transaction system and the merchant, wherein the authorization key is transmitted from the merchant to the transaction system during subsequent transactions with the customer and the merchant.

2. The method of claim 1, wherein the authorization key is at least partially derived from the customer data.

3. The method of claim 1, wherein the customer is assigned a plurality of authorization keys.

4. The method of claim 1, wherein the customer account number is identical to the customer-specific authorization key.

5. The method of claim 1, further comprising the steps of:

establishing a customer accounting database on a third-party accounting system;

establishing a customer account on the customer accounting database;

communicating at least one of the customer data, the authorization key and the transaction specific data to the third-party accounting system; and

updating the customer account on the customer accounting database.

6. The method of claim 1, further comprising the steps of:

communicating an authorization request for a subsequent transaction by the customer to a merchant including the authorization key and transaction specific data;

analyzing customer account balance and customer account status;

authorizing the subsequent transaction by the transaction system; and

communicating an authorization response from the transaction system to the merchant.

7. The method of claim 6, further comprising the steps of:

establishing a customer accounting database on a third-party accounting system;

establishing a customer account on the customer accounting database;

communicating the authorization key and transaction specific data to the third-party accounting system; and

updating the customer account on the customer accounting database.

8. The method of claim 6, wherein the subsequent transaction involves the same customer and a different merchant.

9. The method of claim 1, further comprising the steps of:

communicating an authorization request for a subsequent transaction by the customer to a merchant including the customer data and transaction specific data;

matching the customer to the customer-specific authorization key based upon the customer data;

analyzing customer account balance and customer account status;

authorizing the subsequent transaction by the transaction system; and

communicating an authorization response to the merchant.

10. The method of claim 9, further comprising the steps of:

establishing a customer accounting database on a third-party accounting system;

establishing a customer account on the customer accounting database;

communicating the authorization key and transaction specific data to the third-party accounting system; and

updating the customer account on the customer accounting database.

11. The method of claim 9, wherein the subsequent transaction involves the same customer and a different merchant.

12. The method of claim 1, wherein the transaction system includes a credit authorization subsystem, and further comprises the steps of:

communicating at least one of the customer data, the authorization key and the transaction specific data to the credit authorization subsystem; and

determining an authorization response for the customer and the transaction by the credit authorization subsystem.

13. The method of claim 12, further comprising the steps of:

communicating at least one of the customer data, the authorization key and the transaction specific data from the credit authorization subsystem to a third-party credit system;

receiving a credit check of the customer from the third-party credit system; and

receiving an authorization response from the third-party credit system to the credit authorization credit subsystem.

14. The method of claim 13, wherein the authorization response includes a customer credit score.

15. The method of claim 1, further comprising the step of:

prior to establishing a new customer account, determining whether the customer has a pre-existing customer account on the transaction system.

16. The method of claim 1, wherein the customer-specific authorization key is derived from at least one of the customer name, the customer home address, the customer phone number, the customer facsimile number, the customer date of birth, the customer social security number, the customer billing address, the customer shipping address, the customer IP address, and the customer e-mail address.

17. The method of claim 1, further comprising the steps of:

creating a customer-specific file history database on the transaction system;

for each subsequent transaction, building a customer history for each customer account on the customer-specific file history database; and

for each subsequent transaction, analyzing the customer history on the customer-specific file history database.

18. The method of claim 17, further comprising the step of:

if the analyzed customer history indicates that the customer meets the set criteria for rejection for the transaction, communicating the rejection to the customer.

19. The method of claim 1, further comprising the steps of:

generating a customer-specific user identification and password for the customer account on the transaction system; and

communicating the customer-specific user identification and password to the customer.

20. The method of claim 19, wherein the transaction system includes a user interface accessible by a user having a valid user identification and password.

21. The method of claim 20, further comprising the steps of:

presenting to the customer account maintenance options when the customer accesses the user interface.

22. The method of claim 21, wherein the customer account maintenance options allow the customer to carry out at least one of the following steps:

view the account status, view a transactional history of the account, settle at least one transaction on the account, complete a registration process, initiate a charge back transaction, and view credit history.

23. The method of claim 20, wherein, the transaction system retrieves customer account data from a third-party accounting system.

24. The method of claim 1, wherein the customer account includes at least one of name data, address data, credit score data, promotional code data, source merchant code data, credit segment data, and terms and conditions version data.

25. The method of claim 1, wherein the authorization key is comprised of at least one of alphanumeric characters and symbolic characters.

26. The method of claim 1, wherein the transaction system is configured to carry out at least one of the following steps:

post new customer accounts, post monetary transactions, post non-monetary transactions and generate customer-specific statements.

27. The method of claim 1, further comprising the step of communicating at least one of the customer data, the transaction specific data and the authorization key to a third-party accounting system;

and wherein the third-party accounting system is configured to carry out at least one of the following steps;

post new customer accounts, post monetary transactions, post non-monetary transactions and generate customer-specific statements.

28. The method of claim 1, wherein the authorization key is communicated to at least one of the merchant, a third-party payment processor system, a third-party credit system and a third-party accounting system.

29. The method of claim 1, further comprising the steps of:

receiving an authorization request for a subsequent transaction by the customer to a merchant including the authorization key and transaction specific data from the merchant;

analyzing customer account balance and customer account status;

communicating at least one of the customer data, the authorization key and the transaction specific data to a credit authorization subsystem;

determining an authorization response for the customer and the transaction by the credit authorization subsystem;

authorizing the subsequent transaction by the transaction system; and

communicating an authorization response to the merchant.

30. The method of claim 1, further comprising the steps of:

receiving an authorization request including the customer data and transaction specific data from the merchant;

matching the customer to the customer-specific authorization key based upon the customer data;

communicating at least one of the customer data, the authorization key and the transaction specific data to a credit authorization subsystem;

determining an authorization response for the customer and the transaction by the credit authorization subsystem;

analyzing customer account balance and customer account status;

authorizing the subsequent transaction by the transaction system; and

communicating an authorization response to the merchant.

31. The method of claim 1, further comprising the steps of:

aggregating at least one transaction in a single statement; and

transmitting the statement to the customer on a periodic basis.

32. The method of claim 1, further comprising the steps of:

receiving a settlement/deposit request from the merchant;

posting a settlement in the transaction system;

transmitting a settlement record by the transaction system to the merchant; and

depositing a settlement amount with the merchant.

33. The method of claim 32, further comprising the steps of:

receiving a settlement/deposit request from a third-party payment processor system;

transmitting the settlement record to the third-party payment processor system; and

depositing the settlement amount with the third-party payment processor system.

34. The method of claim 32, further comprising the steps of:

transmitting the settlement/deposit request to a third-party accounting system;

posting a settlement in the third-party accounting system; and

receiving the settlement record from the third-party accounting system.

35. The method of claim 1, wherein the customer initiates the transaction on a secured merchant system.

36. The method of claim 35, wherein the secured merchant system is a web site requiring a log-in sequence.

37. The method of claim 1, wherein the transaction system includes a payment processor system for validating the customer data and the transaction specific data and arranging this data into a standard format.

38. The method of claim 1, wherein, prior to the authorizing, the transaction system authenticates the merchant.

39. The method of claim 1, further comprising the steps of:

identifying a transaction that is completed between the customer and the merchant without authorization from the transaction system within a predetermined period of time as “

out of compliance.”

40. The method of claim 39, further comprising the step of:

initiating a chargeback adjustment process for an “

out of compliance”

transaction.

41. The method of claim 1, further comprising the steps of:

creating an authorization database on the transaction system; and

entering the transaction specific data for each authorized transaction on the authorization database.

42. The method of claim 1, wherein the customer data includes at least one of the customer name, the customer home address, the customer phone number, the customer facsimile number, the customer date of birth, the customer social security number, the customer billing address, the customer shipping address, the customer IP address, and the customer e-mail address.

43. The method of claim 1, wherein the transaction specific data includes at least one of the unit description, unit model number, unit quantity, unit price, total price, service description, service price and warranty data.

44. The method of claim 1, further comprising the step of:

if the authorization response is negative, communicating the rejection to the customer.

45. The method of claim 1, further comprising the step of:

for each subsequent transaction initiated by the customer, transmitting, to the customer, a notification of customer account activity.