Method and apparatus for executing electronic commercial transactions with minors

• US 6,173,269 B1
• Filed: 04/07/1999
• Issued: 01/09/2001
• Est. Priority Date: 12/16/1998
• Status: Expired due to Term

• Current Assignee: First Data Corporation (Fiserv Incorporated)
• Original Assignee: ZOWI.com Incorporated
• Inventors: Knight, Kirk Hoyt, Solokl, Daniel David, Corsini, Frank Anton
• Primary Examiner(s): Swann, Tod R.
• Assistant Examiner(s): Myhre, James W.
• Application Number:
  US09/288,046
• Time in Patent Office: 643 Days
• Field of Search: 705/35, 705/39, 705/42, 705/14
• US Class Current: 705/35
• CPC Class Codes: G06Q 20/02 involving a neutral party, e.g. certification authority, notary or trusted third party [TTP]
• CPC Class Codes: G06Q 20/023 the neutral party being a clearing house
• 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 20/2295 Parent-child type, e.g. where parent has control on child rights
• CPC Class Codes: G06Q 20/385 using an alias or single-use codes
• CPC Class Codes: G06Q 20/403 Solvency checks
• 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: G07F 19/20 Automatic teller machines [ATMs]
• CPC Class Codes: G07F 19/201 Accessories of ATMs

Abstract

A method and apparatus is provided for executing electronic transactions with teens, especially where such transactions are limited only to those vendors that have been approved by the teen'"'"'s parents. In one embodiment, a virtual automatic teller machine (VATM) is provided in which funds are transferred from an existing account, such as a saving account, checking account, or credit card account, to an Internet passport account. The VATM account mimics a bank account, i.e. it gives the user the appearance of an ATM machine. Functionally, the VATM allows the user to transfer funds from an existing account into the Internet passport account. The VATM does this by emulating an ATM machine as it appears to the Automated Clearing House (ACH) system. The ACH system is a separate network from the Internet. Rather than acting as a trustee for a teen account, the invention provides a method and apparatus that allows a merchant to withdraw funds directly from the teen'"'"'s account automatically at the time of purchase. In this way, the invention provides a system in which funds are not held, thereby eliminating cash advance fees and liabilities associated with trusteeship. A second embodiment of the invention, a global gift certificate, is provided. The preferred second embodiment of the invention is configured to appear as a debit card to the ACH system. In this regard, the gift certificate thus generated is truly global in that it is accepted anywhere it is presented.

Claims

1. A method for executing electronic transactions with an individual lacking contractual capacity, comprising the steps of:

funding a separate account held by a financial institution with funds from a fund source account of a parent or guardian of said individual, wherein said separate account is independent and unsupervised relative to said fund source account; and

providing a service for supervising access by said individual who is enrolled with said service to funds in said separate account, said service executing binding transactions with third parties on behalf of said individual.

2. The method of claim 1, wherein said service comprises a virtual automatic teller machine (VATM) that emulates an ATM machine as it appears to the POS system.

3. The method of claim 1, said funding step further comprising the step of:

a legally responsible party authorizing said financial institution to make transactions to their checking, savings, or credit/debit card accounts.

4. The method of claim 1, wherein said third parties comprise merchant sites accessible via an electronic network.

5. The method of claim 4, wherein said merchant sites may be accessed by said individual from a list of service approved merchant sites based upon selected factors that may include the individual'"'"'s age or content of said of said merchant site.

6. The method of claim 4, wherein said merchant sites may be accessed by said individual based upon a merchant profile approved by said individual'"'"'s parent or guardian.

7. The method of claim 5, wherein service inspects a merchant site before it is added to said service'"'"'s approved list.

8. The method of claim 4, wherein said service can intercept a transaction and prevent a sale authorizing payment for a transaction from proceeding if a particular product/service or class of products/services is involved in said transaction between said individual and said merchant site.

9. The method of claim 4, wherein said service provides said merchant with valid separate account information;

and wherein said merchant can access said separate account pursuant to a transaction with said individual.

10. The method of claim 4, wherein all transfers of funds and all transaction involving said individual are reconciled and reported to said individual and/or said individual'"'"'s parent or guardian by the service.

11. The method of claim 4, wherein said service provides credit card information to said merchant.

12. The method of claim 4, wherein said service maintains a database of service members, as well as member profiles that may include any of such information as spending limits per transaction, types of products that may be purchased, and sources of funds.

13. The method of claim 4, wherein said service authorizes transactions on behalf of said individual after verifying that funds are available in said separate account.

14. The method of claim 4, further comprising the step of:

providing a database for collecting information about said individual which may include any of said individual'"'"'s purchase preferences, spending habits, dates of significance, and other relevant information;

wherein said information may optionally be used by said individual with an on-line agent to assist said individual in finding desired products and services, or may be used to provide market information with regard to said individual'"'"'s preferences and spending patterns.

15. The method of claim 4, further comprising the step of:

providing a pass-through remailer that directs all products ordered from merchants by said individual to said service, which then forwards said products to an intended recipient.

16. The method of claim 1, wherein said service does not have custody of any funds within said separate account.

17. The method of claim 1, wherin said service supervises said individual'"'"'s use of said separate account as a surrogate for said individual'"'"'s parent of guardian.

18. The method of claim 1, wherein funds of each individual who uses said service are commingled in a single service account at said financial institution;

and wherein access to said funds is segregated based on fund ownership records maintained in a service database.

19. A method that allows a merchant to withdraw funds directly from a separate account of an individual lacking contractual capacity automatically at the time of purchase, comprising the steps of:

providing said individual with access to one or more merchants via a service that does not hold any of said individual'"'"'s funds;

funding a separate account held by a financial institution with funds from a fund source account of a parent or guardian of said individual, wherein said separate account is independent and unsupervised relative to said find source account; and

enabling legally binding transactions between said individual and said merchant with said separate account by authorizing transactions between said individual and said merchant on behalf of said individual'"'"'s parent or guardian.

20. The method of claim 19, further comprising the step of:

providing said individual with a pass phrase that is used to lookup a multiple digit PIN number in a service database.

21. The method of claim 19, wherein said service generates a global gift certificate for use by said individual in concluding one or more transactions with said merchant.

22. The method of claim 21, wherein said gift certificate is a universal gift certificate that may be given to anyone by said individual.

23. The method of claim 19, wherein said funds may either be transferred from said fund source account to said separate account on a periodic basis as an allowance or on a one time basis as a gift.

24. The method of claim 19, wherein said separate account is used as if it were a debit card, wherein said individual enters a certificate number into a form as if it were a standard debit card when said individual makes a purchase from said merchant.

25. The method of claim 19, wherein said service screens merchants to maintain a list of approved merchants that are known to be reputable and that are known to carry only products and services that are appropriate for minors;

wherein said service may optionally provide subsets of said list and allow said individual'"'"'s parent or guardian to set a profile for said individual, in which case said parent or guardian may be provided with a secure pass code that gives said parent or guardian supervisory access to said individual'"'"'s account.

26. The method of claim 19, wherein permission to use said separate account is granted to said individual by said individual'"'"'s parent or guardian when establishing said separate account;

wherein said individual'"'"'s parent or guardian provides said service with authority to execute and supervise transactions on behalf of said individual.

27. The method of claim 19, wherein said individual'"'"'s use of said separate account is limited to any of the scope of goods and services authorized by said individual'"'"'s parent or guardian, a daily/weekly spending limit, maintaining a minimum account balance, or a limit on spending per session.

28. The method of claim 19, wherein said individual'"'"'s account privileges are automatically enforced by said service by matching a desired transaction to a profile established by said individual'"'"'s parent or guardian.

29. The method of claim 19, wherein said service provides bonus and promotional features that reward said individual for purchases.

30. The method of claim 29, wherein said rewards may be issued as coupons in real time which are good for immediate discounts on certain merchandise, or they may be promotional discounts;

wherein said individual may optionally assign said rewards to third parties.

31. The method of claim 19, wherein said service, upon authorization, transfers said individual'"'"'s account to said individual upon said individual reaching majority.

32. The method of claim 19, wherein said service executes transactions between said individual and said merchant on a cash basis and does not allow said individual to become over-extended through the use of credit.

33.The method of claim 19, wherein an option may be set in said individual'"'"'s profile that allows a portion of said individual'"'"'s funds to be placed into a savings account, a non-profit donation, or an investment fund.

33. The method of claim 19, further comprising the step of:

providing a coupon that allows a merchant or other agency to distribute a physical coupon to said individual during a face-to-face transaction, wherein said coupon is redeemable for any of cash, funds deposited in said separate account, a deposit to a bank or credit card account, or a discount on purchases made as said service by said individual using said separate account.

35. The method of claim 19, wherein said transaction may be concluded between said individual and said merchant via any of telephone, fax, and mail based orders, as well as an in person transaction based upon a service card that is approved by said service.

34. The method of claim 34, wherein said coupon is a contest ticket that requires said individual to log-on to said service to see if and what said individual has won;

wherein redemption of said coupon takes place at a service site;

wherein each said coupon is optionally identified by a number which can be traced back to a specific transaction or merchant; and

wherein said coupon optionally may only be redeemed once.

36. An apparatus for executing electronic transactions with individuals lacking contractual capacity, comprising:

a separate account held by a financial institution, said separate account being funded with funds from a fund source account of a parent of guardian of said individual, wherein said separate account is independent and unsupervised relative to said fund source account; and

a service for supervising access by an individual lacking contractual capacity who is enrolled with said service to funds in said separate account, said service executing legally binding transactions with third parties on behalf of said individual.

37. The apparatus of claim 37, wherein said service comprises a virtual automatic teller machine (VATM) that emulates an ATM machine as it appears to the POS system.

38. The apparatus of claim 37, wherein a legally responsible party authorizes said financial institution to make transactions to their checking, savings, or credit/debit card accounts to fund said service account.

39. The apparatus of claim 38, wherein said third parties comprise merchant sites accessible via an electronic network.

51. The apparatus of claim 37, wherein said service does not have custody of any funds within said separate account.

52. The apparatus of claim 37, wherein said service supervises said individual'"'"'s use of said separate account as a surrogate for said individual'"'"'s parent or guardian.

53. The apparatus of claim 37, wherein funds of each individual who uses said service are commingled in a single service account at said financial institution;

and wherein access to said funds is segregated based on fund ownership records maintained in a service database.

40. The apparatus of claim 40, wherein said merchant sites may be accessed by said individual from a list of service approved merchant sites based upon selected factors that may include the individual'"'"'s age and content of said merchant site.

41. The apparatus of claim 40, wherein said merchant sites may be accessed by said individual based upon a merchant profile approved by said individuals'"'"'parent or guardian.

42. The apparatus of claim 41, wherein service inspects a merchant site before it is added to said service'"'"'s approved list.

43. The apparatus of claim 40, wherein said service can intercept a transaction and prevent a sale authorizing payment for a transaction from proceeding if a particular product/service or class of products/services is involved in said transaction between said individual and said merchant site.

44. The apparatus of claim 40, wherein said service provides said merchant with valid separate account information;

and wherein said merchant can access said separate account pursuant to a transaction with said individual.

45. The apparatus of claim 40, wherein all transfers of funds and all transactions involving said individual are reconciled and reported to said individual and/or said individual'"'"'s parent of guardian.

46. The apparatus of claim 40, wherein said service provides any of credit card, debit card, or ATM card information to said merchant as appropriate.

47. The apparatus of claim 40, wherein said service maintains a database of service members, as well as member profiles that may include any of such information as spending limits per transaction, types of products that may be purchased, and sources of funds.

48. The apparatus of claim 40, wherein said service authorizes transactions on behalf of said individual after verifying that funds are available in said separate account.

49. The apparatus of claim 40, further comprising:

a database for collecting information about said individual which may include any of said individual'"'"'s purchase preferences, spending habits, dates of significance, and other relevant information;

wherein said information may optionally be used by said individual with an on-line agent to assist said individual in finding desired products and services, or may be used to provide market information with regard to said individual'"'"'s preferences and spending patterns.

50. The apparatus of claim 40, further comprising:

a pass-through remailer that directs all products ordered from merchants by said individual to said service, which then forwards said products to an intended recipient.

54. An apparatus that allows a merchant to withdraw funds directly from an account of an individual lacking contractual capacity automatically at the time of purchase, comprising:

a service for providing said individual with access to one or more merchants, wherein said service does not hold any of said individual'"'"'s finds; and

means within said service for enabling legally binding transactions between said individual and said merchant with said separate account by authorizing transactions between said individual and said merchant on behalf of said individual'"'"'s parent or guardian.

55. The apparatus of claim 55, further comprising:

a pass phrase that is used to lookup a multiple digit PIN number in a service database.

56. The apparatus of claim 55, wherein said service generates a global gift certificate for use by said individual in concluding one or more transactions with said merchant.

58. The apparatus of claim 55, wherein said funds may either be transferred from said fund source account to said separate account on a periodic basis as an allowance or on a one time basis as a gift.

59. The apparatus of claim 55, wherein said separate account is used as if it were a debit card, wherein said individual enters a certificate number into a form as if it were a standard debit card when said individual makes a purchase from said merchant.

60. The apparatus of claim 55, wherein said service screens merchants to maintain a list of approved merchants that are known to be reputable and that are known to carry only products and services that are appropriate for minors;

wherein said service may optionally provide subsets of said list and allow said individual'"'"'s parent or guardian to set a profile for said individual, in which case said parent or guardian may be provided with a secure pass code that gives said parent or guardian supervisory access to said individual'"'"'s account.

61. The apparatus of claim 55, wherein permission to use said separate account is granted to said individual by said individual'"'"'s parent or guardian when establishing said separate account;

wherein said individual'"'"'s parent or guardian provides said service with authority to execute and supervise transactions on behalf of said individual.

62. The apparatus of claim 55, wherein said individual'"'"'s use of said separate account is limited to any of the scope of goods and services authorized by said individual'"'"'s parent or guardian, a daily/weekly spending limit, maintaining a minimum account balance, or a limit on spending per session.

63. The apparatus of claim 55, wherein said individual'"'"'s account privileges are automatically enforced by said service by matching a desired transaction to a profile established by said individual'"'"'s parent or guardian.

64. The apparatus of claim 55, wherein said service provides bonus and promotional features that reward said individual for purchases.

66. The apparatus of claim 55, wherein said service, upon authorization, transfers said individual'"'"'s account to said individual upon said individual reaching majority.

67. The apparatus of claim 55, wherein said service executes transactions between said individual and said merchant on a cash basis and does not allow said individual to become over-extended through the use of credit.

68. The apparatus of claim 55, wherein an option may be set in said individual'"'"'s profile that allows a portion of said individual'"'"'s funds to be placed into a savings account, a non-profit donation, or an investment fund.

69. The apparatus of claim 55, further comprising the step of:

a coupon that allows a merchant or other agency to distribute a physical coupon to said individual during a face-to-face transaction, wherein said coupon is redeemable for any of cash, funds deposited in said separate account, a deposit to a bank or credit card account, or a discount on purchases made as said service by said individual using said separate account.

71. The apparatus of claim 55, wherein said transaction may be concluded between said individual and said merchant via any of telephone, fax, and mail based orders, as well as an in person transaction based upon a service card that is approved by said service.

57. The apparatus of claim 57, wherein said gift certificate is a universal gift certificate that may be given to anyone by said individual.

65. The apparatus of claim 65, wherein said rewards may be issued as coupons in real time which are good for immediate discounts on certain merchandise, or they may be promotional discounts;

wherein said individual may optionally assign said rewards to third parties, or may convert said rewards to monetary value which is credited to said separate account.

70. The apparatus of claim 70, wherein said coupon is a contest ticket that requires said individual to log-on to said service to see if and what said individual has won;

wherein redemption of said coupon takes place at a service site;

wherein each said coupon is optionally identified by a number which can be traced back to a specific transaction or merchant; and

wherein said coupon optionally may only be redeemed once.