US20040158532A1 - System for facilitating a transaction - Google Patents

Abstract

The present invention provides a system and method for facilitating a transaction using a secondary transaction number that is associated with a cardholder's primary account. The cardholder provides the secondary transaction number, often with limited-use conditions associated therewith, to a merchant to facilitate a more secure and confident transaction.

Description

CROSS REFERENCE TO RELATED APPLICATIONS
• This application claims priority to, and the benefit of, U.S. provisional applications: (1) Ser. No. 60/187,620, filed Mar. 7, 2000, (2) Ser. No. 60/200,625, filed Apr. 28, 2000, and (3) Ser. No. 60/213,323, filed Jun. 22, 2000, all of which are hereby incorporated by reference.[0001]
FIELD OF THE INVENTION
• The present invention generally relates to a system for facilitating transactions utilizing a secondary transaction number that is associated with a primary transaction card. More particularly, the system allows a cardholder to pay a merchant with a private, limited-use, transaction number without the need to disclose to the merchant or others the cardholder's primary charge card number. Moreover, the present invention provides registration, number generation and association, authorization, settlement and customer service processes that achieve an improved secure and private transaction system.[0002]
BACKGROUND OF THE INVENTION
• The proliferation of the Internet has resulted in a thriving electronic commerce industry, where more and more products and services are available to consumers in a variety of non-traditional ways, e.g., internet, telephone sales, wireless, interactive TV, etc. For example, in traditional online consumer-merchant transactions, consumers typically provide merchants with transaction numbers (e.g, charge card numbers) from their existing debit, phone, credit or other transaction/service cards (e.g., American Express®, VISA®, MasterCard® and Discover Card®, AT&T®, MCI®, etc.). Transmission of transaction numbers via these traditional means has created increased opportunities for fraud. Namely, it is possible for these numbers to be intercepted during transmission, after transmission, while being stored electronically or at the merchant's online or offline location. In light of the increase in charge card fraud involving situations where the physical charge card is not actually presented to the merchant, consumers are becoming increasingly cautious and leery of giving out their actual charge card number to merchants (or other unknown third parties asserting to be merchants).[0003]
• In traditional online purchases, a consumer often browses the Internet for items to purchase. When the consumer finds an item that he or she is interested in purchasing, the consumer typically selects an item to add to a virtual shopping cart. When the consumer has finished shopping, and desires to purchase an item, the consumer usually proceeds to a virtual checkout, where the consumer is prompted for payment and delivery information. The consumer then typically is required to enter the appropriate delivery and credit card information, where the the consumer reads the credit card number directly from the consumer's physical credit card. This information is then transmitted electronically to the merchant via a public internet network. Although the transmission is often encrypted, there exists the possibility that the number will be intercepted en route to the merchant. More likely, however, is that the number will be fraudulently used by an unscrupulous third party, such as a dishonest employee of the merchant.[0004]
• In addition to the previous example, various other means of credit card skimming are common in the industry. In an attempt to minimize these and similar problems relating to credit card fraud, banks and other credit card institutions have begun to explore various ways to provide customers with temporary transaction numbers to facilitate online transactions, where the actual credit card is not disclosed to the merchant or any other third party.[0005]
• For example, U.S. Pat. No. 5,883,810 issued to Franklin, et al., which is hereby incorporated by reference, discloses a system to facilitate online commerce where a customer is able to register and sign-up for an “online commerce card.” This online commerce card does not exist in physical form, but instead exists in a digital form that can be electronically configured for online commerce. The issuing bank issues the digital card to the customer in the form of a signed digital certificate binding the customer to the bank and provides the customer a software module that can be invoked when using the commerce card to conduct an online transaction. This online commerce card is assigned a permanent customer account number that resides with the issuing bank and is not given to the customer. In Franklin, when a customer desires to make an online purchase, the customer requests from the bank a transaction number that is good for a single transaction and with a limited life. This single transaction number is provided to a merchant to complete a purchase and is then processed by the merchant for authorization and settlement, with the issuing bank substituting and re-substituting the single transaction number and the customer account number as necessary in order to insure that the actual account number is not released to any third party.[0006]
• Although the single use transaction number disclosed by Franklin provided some improvement over the traditional online transaction methods, several problems remained. For example, Franklin's system, which requires the generation of a digitally keyed online commerce card that does not exist in the physical form, requires customers to register and use an assigned digital certificate. Furthermore, this system requires the customer to download modules to facilitate the registration and transaction processes. Although Franklin notes that the commerce card is configured to be used by the customer in one or more areas of commerce in which the customer typically employs a charge card, Franklin fails to disclose how a consumer's existing plastic credit card number could be used to facilitate transactions. Specifically, Franklin requires instead, for the cardholder to sign-up and register in advance for an online commerce card that is not the cardholder's existing physical credit card, but is a non-physical digital card. Furthermore, the Franklin single transaction number will not work for multiple payment arrangements, i.e., where there is one purchase but multiple payment components.[0007]
• Additional publications also disclose efforts to make transactions more secure, such as, for example, PCT Application, WO 99\49424, published on Sep. 30, 1999, and PCT Application WO 99\49586, published on Aug. 24, 2000 (collectively “Orbis”), hereby incorporated by reference, which attempt to expand and improve on the use of temporary transaction numbers. Specifically, Orbis discloses the use of a limited use credit card number that is associated with a master credit card (e.g., a physical credit card).[0008]
• Orbis discloses using this limited use credit card number for transactions with merchants so that the physical credit card is not disclosed to the merchant or other third parties. In Orbis, for example, the bank or credit card provider issues the cardholder a non-activated limited use credit card number that is associated with the cardholder's master credit card. In an online transaction, the cardholder activates the limited use credit card and provides that number to the merchant to complete a transaction. On presentment to the card provider for authorization, the card provider verifies, inter alia, that the conditions of use have been met. If the conditions have been met, the card provider provides the merchant with an approval code that will accompany the payment request during settlement. If, however, during the authorization process, it is determined that certain conditions of use have not been met, the card provider de-activates the limited-use card. With the limited-use credit card de-activated, the merchant will not be paid and the transaction is not able to proceed through settlement. Conversely, if the limited use number is not submitted at all for authorization, and the merchant chooses to process this transaction for settlement, settlement may later occur and the merchant may be paid, with the incumbent risk to the merchant, however, that charge-back is likely if the charge is later disputed by the cardholder.[0009]
• In prior art systems, if a transaction involving a temporary number is not authorized for failing to meet certain limited-use conditions, the number is deactivated and will not be processed through settlement. In real world environments, this creates certain problems. For instance, many online or telephonic purchases are multiple payment purchases, where one product may be purchased but multiple periodic payments are used to complete the transaction. Although the consumer is usually provided with the product up front, there may be occasions where the product is not delivered until all payments have been completed. The prior art systems occasionally create situations where the temporary transaction number is deactivated at some point in the multiple payment process where the merchant is not fully paid, possibly resulting in the product not being delivered to the consumer.[0010]
• As previously noted, prior art systems typically use the authorization process to determine whether limited-use conditions are satisfied. The resultant comparison utilized in the authorization process is then used to update a conditions database. However, the consumer rarely knows exactly how many authorization requests will be submitted by the merchant. For example, a consumer may purchase an item online for $1000, agreeing to apply ten monthly $100 payments to complete the purchase. Initially, one employing a prior art system may think to apply a number of different limited use conditions to facilitate this transaction, e.g., one transaction for $1000, ten transactions for $100, or any combination. Additionally, different merchants may handle authorization requests in a number of different ways. A merchant may send to the card provider (i) only one authorization request for $1000; (ii) one authorization request for $1000, followed by subsequent authorization requests for each $100 payment; (iii) one authorization request for each $100 payment, or (iv) only a few periodic authorization requests. It is also common in the industry for merchants to submit pre-authorization requests followed by a subsequent request for authorization. In sum, it can be difficult for the consumer to guess exactly what method will be employed by the merchant to facilitate the authorization process.[0011]
• As such, the prior art systems create situations where a temporary transaction number may be inadvertently deactivated prior to completion of the periodic payments. If, for example, the consumer only authorized one transaction, the card would be deactivated where the merchant submits one pre-authorization request, followed by a second authorization request prior to the first payment.[0012]
SUMMARY OF THE INVENTION
• The present invention facilitates transactions between a first party (referred to herein as “cardholder”) and a second party (referred to herein as “merchant”) by providing the cardholder with a secondary transaction number that is associated with a cardholder's primary account, (e.g., charge card), wherein the cardholder presents or transmits the transaction number—not the primary charge card number—to the merchant to initiate a transaction.[0013]
• More particularly, the system involves the process of registering a cardholder (if not already pre-registered) to participate in a transaction system; generating a secondary transaction number and issuing this number to the cardholder, where the cardholder presents this number to a merchant to complete a sales transaction; the merchant processing this secondary transaction number, similar to any other credit card number, where the number is typically presented to the credit card provider for authorization. Throughout this process, the cardholder's primary charge card number is never passed to the merchant or any other third party. Additionally, the secondary transaction number may also carry with it certain limitations-on-use conditions, where the transaction is not authorized unless these conditions are met.[0014]
• In generating a secondary transaction number, upon a cardholder's request, the card provider generates a random number and associates this number with the cardholder's primary charge card account. This instantaneous and immediate generation of a random number allows for the number to be used by the cardholder immediately upon receipt. This process obviates the need for separate activation of the secondary transaction number, and minimizes the possibility that a secondary transaction number, once issued, will not be utilized because the cardholder or card provider failed to “activate” it.[0015]
• During the authorization phase of the transaction process, the card provider receives the merchant's authorization request and verifies that certain limitations-on-use conditions, if any, have been satisfied. If the conditions have been satisfied, the request is approved and the card provider sends the merchant an approval code. If conditions have not been met, the request is declined. Although the request is declined, in an exemplary embodiment, the secondary transaction number is not “deactivated,” and, as a result, may still continue through the payment process.[0016]
• An exemplary settlement process of the present invention involves receiving a request from a merchant to be paid for a particular transaction and paying the merchant. As noted above, even a secondary transaction number that has not been authorized or that has been denied authorization by the card provider, may proceed through settlement, with the incumbent risk to the merchant that the transaction (if not accompanied by a valid approval code) may later be charged back to the merchant if the transaction is ever disputed. During the settlement process, the accounts payable system pays the merchant, referencing only the secondary transaction number. However, prior to the accounts receivable processing, the secondary transaction number is replaced with the primary account for cardholder billing. The cardholder's statement may reflect, as desired, the secondary transaction number(s), the primary account number(s), all numbers or any combination of these numbers[0017]
• The dispute handling and customer service processes of an exemplary embodiment of this invention enable customer service representatives to retrieve information and initiate customer or merchant inquiries based on the primary account number, the secondary transaction number or other transaction specific information provided by either the cardholder or the merchant. Therefore, the cardholder may provide either the primary account number or the secondary transaction number to the customer service representative to initiate a dispute. With either number, the representative is able to look-up the associated account number and account information. The system provides seamless integration of the secondary transaction number and the primary account (i.e., charge card) number to ensure that the merchant only sees statements, reports, letters, or financial adjustments bearing the secondary transaction number—not the charge card number, while the cardholder need only reference the primary charge card account. Additionally, it is through the dispute handling process that the cardholder may dispute a transaction involving, inter alia, an unauthorized use of the secondary transaction number and it is during this process that the transaction amount is charged back to the merchant. Other situations involving a merchant charge-back may include duplicate billing; service or item not received; item returned; or wrong amount billed.[0018]
• Various embodiments of the present transaction system incorporate, and improve upon, existing or developing technologies, such as, for example, non-currency based programs and loyalty systems, electronic lines of credit, online banking, etc.[0019]
BRIEF DESCRIPTION OF THE DRAWINGS
• Additional aspects of the present invention will become evident upon reviewing the non-limiting embodiments described in the specification and the claims taken in conjunction with the accompanying figures, wherein like reference numerals denote like elements.[0020]
• FIG. 1 is an overview of an exemplary system for facilitating a transaction.[0021]
• FIG. 2 is a flow diagram of exemplary processes of the present invention;[0022]
• FIG. 3 is a web page screen shot of a card provider's exemplary splash page for a transaction system;[0023]
• FIG. 4 is a web page screen shot of a card provider's exemplary online registration page for a transaction system;[0024]
• FIG. 5 is a web page screen shot of a card provider's exemplary online log-in page for a transaction system;[0025]
• FIG. 6 is a web page screen shot of a card provider's exemplary online drop-down menu used to select a primary charge card in the foreground and an online merchant's payment web page in the background;[0026]
• FIG. 7 is a web page screen shot, displaying in the foreground, an exemplary secondary transaction number (e.g., Private Payments™ number) returned to the user; and in the background, a merchant's payment web page;[0027]
• FIG. 8 is a block diagram of exemplary components of the present invention;[0028]
• FIG. 9 is a block diagram of an example of some of the exemplary data structure of the STN database of the present invention;[0029]
• FIG. 10 is a flow chart of an exemplary secondary transaction number generation process of the present invention;[0030]
• FIG. 11 is a flow diagram of an exemplary transaction authorization phase of the present invention;[0031]
• FIG. 12 is an screen shot of an exemplary transaction history report of the present invention;[0032]
• FIG. 13 is a flow diagram depicting an exemplary embodiment of the present invention involving an electronic line of credit system;[0033]
• FIG. 14 is a flow diagram depicting one embodiment of an exemplary transaction system of the present invention used to facilitate a non-currency based membership rewards program;[0034]
• FIG. 15 is a flow diagram depicting a second embodiment of an exemplary transaction system of the present invention used to facilitate a membership rewards program.[0035]
DETAILED DESCRIPTION OF EXEMPLARY EMBODIMENTS
• As background, the various prior art methods for implementing transactional systems utilizing temporary numbers have failed to satisfy certain consumer demands for more secure and confident transactions. Specifically, the prior art systems have typically required, inter alia, (i) additional software to provide registration and transaction processes, (ii) the generation of a separate digital certificate embodying a non-physical online commerce card, (iii) separate activation of the temporary transaction number; or (vi) a deactivation of the temporary number if predefined conditions are not met. In short, previous transaction systems have not sufficiently adapted to real world demands for a more secure and confident transaction system that is readily compatible with existing banking and electronic commerce systems.[0036]
• The present invention includes a unique system for facilitating transactions that is easily and readily adaptable to existing commercial transaction processing systems. While the system may contemplate upgrades or reconfigurations of existing processing systems, changes to cardholder or merchant systems are not necessarily required by the present invention. For example, the present system may contemplate, but does not require: downloading of software modules; a digitally-based, non-physical commerce card; activation or deactivation of the secondary transaction number; and certain embodiments do not require the existing online customer to separately register for the service. Moreover, the transaction system herein described can be seamlessly integrated into current electronic commerce processes with minimal to no changes to existing systems used by cardholders or merchants.[0037]
• The transaction system of the present invention may be described herein in terms of functional block components, flow charts, screen shots, optional selections and various processing steps. It should be appreciated that such functional blocks may be realized by any number of hardware and/or software components configured to perform the specified functions. For example, the present invention may employ various integrated circuit components, e.g., memory elements, processing elements, logic elements, look-up tables, and the like, which may carry out a variety of functions under the control of one or more microprocessors or other control devices. Similarly, the software elements of the present invention may be implemented with any programming or scripting language such as C, C++, Java, COBOL, assembler, PERL, or the like, with the various algorithms being implemented with any combination of data structures, objects, processes, routines or other programming elements. Further, it should be noted that the present invention may employ any number of conventional techniques for data transmission, signaling, data processing, network control, and the like. For a basic introduction of cryptography, please review a text written by Bruce Schneider which is entitled “Applied Cryptography: Protocols, Algorithms, And Source Code In C,” published by John Wiley & Sons (second edition, 1996), which is hereby incorporated by reference.[0038]
• It should be appreciated that the particular implementations shown and described herein are illustrative of the invention and its best mode and are not intended to otherwise limit the scope of the present invention in any way. Indeed, for the sake of brevity, conventional data networking, application development and other functional aspects of the systems (and components of the individual operating components of the systems) may not be described in detail herein. Furthermore, the connecting lines shown in the various figures contained herein are intended to represent exemplary functional relationships and/or physical couplings between the various elements. It should be noted that many alternative or additional functional relationships or physical connections may be present in a practical electronic transaction system.[0039]
• It will be appreciated, that many applications of the present invention could be formulated. One skilled in the art will appreciate that a network may include any system for exchanging data or transacting business, such as the Internet, an intranet, an extranet, WAN, LAN, satellite or wireless communications, and/or the like. The cardholder may interact with the card provider's transaction system or a merchant via any input device such as a telephone, keyboard, mouse, kiosk, personal digital assistant, touch screen, voice recognition device, transponder, biometrics device, handheld computer (e.g., Palm Pilot®), cellular phone, web TV, web phone, blue tooth/beaming device and/or the like. Similarly, the invention could be used in conjunction with any type of personal computer, network computer, workstation, minicomputer, mainframe, or the like running any operating system such as any version of Windows, Windows NT, Windows2000, Windows 98,[0040]Windows 95, MacOS, OS/2, BeOS, Linux, UNIX, or the like. Moreover, although the invention uses protocols such as TCP/IP to facilitate network communications, it will be readily understood that the invention could also be implemented using IPX, Appletalk, IP-6, NetBIOS, OSI or any number of existing or future protocols. Moreover, the system contemplates the use, sale, exchange, transfer, or any other distribution of any goods, services or information over any network having similar functionality described herein.
• As will be appreciated by one of ordinary skill in the art, the present invention may be embodied as a-method, a data processing system, a device for data processing, and/or a computer program product. Accordingly, the present invention may take the form of an entirely software embodiment, an entirely hardware embodiment, or an embodiment combining aspects of both software and hardware. Furthermore, the present invention may take the form of a computer program product on a computer-readable storage medium having computer-readable program code means embodied in the storage medium. Any suitable computer-readable storage medium may be utilized, including hard disks, CD-ROM, optical storage-devices, magnetic storage devices, flash card memory and/or the like.[0041]
• Communication between the parties (e.g., cardholder, card provider, and/or merchant) to the transaction and the system of the present invention may be accomplished through any suitable communication means, such as, for example, a telephone network, Intranet, Internet, point of interaction device (point of sale device, personal digital assistant, cellular phone, kiosk, etc.), online communications, off-line communications, wireless communications, and/or the like. One skilled in the art will also appreciate that, for security reasons, any databases, systems, or components of the present invention may consist of any combination of databases or components at a single location or at multiple locations, wherein each database or system includes any of various suitable security features, such as firewalls, access codes, encryption, de-encryption, compression, decompression, and/or the like.[0042]
• The present invention is described below with reference to block diagrams and flowchart illustrations of methods, apparatus (e.g., systems), and computer program products according to various aspects of the invention. It will be understood that each functional block of the block diagrams and the flowchart illustrations, and combinations of functional blocks in the block diagrams and flowchart illustrations, respectively, can be implemented by computer program instructions. These computer program instructions may be loaded onto a general purpose computer, special purpose computer, or other programmable data processing apparatus to produce a machine, such that the instructions which execute on the computer or other programmable data processing apparatus create means for implementing the functions specified in the flowchart block or blocks.[0043]
• These computer program instructions may also be stored in a computer-readable memory that can direct a computer or other programmable data processing apparatus to function in a particular manner, such that the instructions stored in the computer-readable memory produce an article of manufacture including instruction means which implement the function specified in the flowchart block or blocks. The computer program instructions may also be loaded onto a computer or other programmable data processing apparatus to cause a series of operational steps to be performed on the computer or other programmable apparatus to produce a computer-implemented process such that the instructions which execute on the computer or other programmable apparatus provide steps for implementing the functions specified in the flowchart block or blocks.[0044]
• Accordingly, functional blocks of the block diagrams and flowchart illustrations support combinations of means for performing the specified functions, combinations of steps for performing the specified functions, and program instruction means for performing the specified functions. It will also be understood that each functional block of the block diagrams and flowchart illustrations, and combinations of functional blocks in the block diagrams and flowchart illustrations, can be implemented by either special purpose hardware-based computer systems which perform the specified functions or steps, or suitable combinations of special purpose hardware and computer instructions.[0045]
• Referencing the computer networked aspect of a preferred embodiment of this invention, each participant is equipped with a computing system to facilitate online commerce transactions. The computing units may be connected with each other via a data communication network. The network is a public network and assumed to be insecure and open to eavesdroppers. In the illustrated implementation, the network is embodied as the internet. In this context, the computers may or may not be connected to the internet at all times. For instance, the cardholder computer may employ a modem to occasionally connect to the internet, whereas the card provider computing center might maintain a permanent connection to the internet. It is noted that the network may be implemented as other types of networks, such as an interactive television (ITV) network.[0046]
• The merchant computer and the card provider computer may be interconnected via a second network, referred to as a payment network. The payment network represents existing proprietary networks that presently accommodate transactions for credit cards, debit cards, and other types of financial/banking cards. The payment network is a closed network that is assumed to be secure from eavesdroppers. Examples of the payment network include the American Express®, VisaNet® and the Veriphone® network.[0047]
• As depicted in FIG. 1, the present invention generally relates to a transaction system where a first party to a transaction (“[0048]cardholder1”) provides to a second party to a transaction (“merchant2”) a secondary transaction number (STN)15 that was generated by an issuer (“card provider3”). In a preferred embodiment, although not required, theSTN15 is immediately usable by thecardholder1 without need for activation and may have associated therewithcardholder1,card provider3, ormerchant2 defined conditions or parameters of use restrictions which limit use of theSTN15. A “transaction,” as defined herein, includes, inter alia, any exchange or delivery of value, exchange or delivery of data, gifting of value or data, etc. The term “transaction” not only contemplates an exchange of goods or services for value from one party to another, but also the gifting of something from one party to another. Additionally, transaction or charge card numbers are account numbers that are used to facilitate any type of transaction.
• While an exemplary embodiment of the invention is described in association with a transaction system, the invention contemplates any type of networks or transaction systems, including, for example, unsecure networks, public networks, wireless networks, closed networks, open networks, intranets, extranets, and/or the like.[0049]
• The first party to the transaction (referred to herein as a “[0050]cardholder1”) is any individual, business or other entity who uses aSTN15 to facilitate any transaction. In a preferred embodiment, thecardholder1 establishes a new or has an existing relationship or association with acard provider3. For example, in one embodiment, acardholder1 may be an American Express® card member. In another embodiment, acardholder1 may be a participant in a frequent flyer rewards program. In a further embodiment, thecardholder1 is a member of any suitable organization that provides transaction products or services. Another embodiment contemplates the cardholder gifting a secondary transaction number to a second party. Theterm cardholder1 may also be referred to herein as “consumer,” “card member,” “user,” “customer” or the like.
• The second party to the transaction (referred to herein as a “[0051]merchant2”) is any individual, business, or other entity who receives a secondary transaction number, whether or not in exchange for goods or services. For example, in one embodiment, amerchant2 may be an online bookstore such as Amazon.com®. In another embodiment, amerchant2 may be a local plumber. In yet another embodiment, amerchant2 may be a local hardware store. In some instances, thecardholder1 and themerchant2 may be the same. In other situations, themerchant2 and thecard provider3 are the same. Although referred to herein as a “merchant,” this term contemplates situations where any second party receives a secondary transaction number from the first party: such as, for example, where acardholder1 gifts a secondary transaction number to another individual (i.e., second party merchant).
• The issuer (“[0052]card provider3”) includes any provider of products and/or services that facilitates any type of transaction. As contemplated by an exemplary embodiment of the present invention, thecard provider3 establishes and maintains account and/or transaction information for thecardholder1. Thecard provider3 may issue products to thecardholder1 and may also provide both thecardholder1 and themerchant2 with the processes to facilitate the transaction system of the present invention. Thecard provider3 includes banks; credit unions; credit, debit or other transaction-related companies, telephone companies; or any other type of card or account issuing institutions, such as card-sponsoring companies, incentive rewards companies, or third party providers under contract with financial institutions. Unless otherwise specifically set forth herein, although referred to as “card provider,” this term should be understood to mean any entity issuing any type of account to facilitate any transaction, exchange or service; and should not be limited to companies possessing or issuing physical cards. In an exemplary system, thecard provider3 may be any transaction facilitating company such as a charge card provider like American Express®, VISA®, Mastercard®, Discover®, etc. In another embodiment, thecard provider3 could be any membership organization or union. In some instances, thecard provider3 and themerchant2 may be the same, for example, where theSTN15 is issued by the same entity that provides the product or service. ASTN15 phone card issued by a telephone company, where theSTN15 phone card is tied to a primary telephone account is one such occasion.
• An[0053]exemplary STN15 is any transaction number, code, symbol, indicia, etc. that is associated with another number or account that has been designated by thecardholder1 or thecard provider3 as a primary charge card (PCC20), i.e., primary account number. In an exemplary embodiment, theSTN15 is a purchasing number that acts as a charge card number and is associated with aPCC20 account (e.g., a main charge card, credit, debit card or other account number, such as a bank or brokerage account, reward program account, etc.). In an exemplary embodiment, aPCC20 account is not identified by aSTN15. In certain embodiments, thePCC20 account may have some identifying elements related to theSTN15. ThePCC20 is defined herein to include any type of transaction card that references any account, membership, affiliation or association. When more than onecardholder1 account exists, thePCC20 is the account that has been designated by thecardholder1 or thecard provider3 as the primary account. Alternatively, there may be a hierarchy of accounts where theSTN15 is associated with one or more PCCs20 in a designated order. Additionally, as depicted in at least one embodiment described herein, aSTN15 may be associated with two or more accounts. For example, aSTN15 could be associated with a non-currency based account and also aPCC20 account.
• As shown in FIG. 1, in a preferred embodiment, the[0054]STN15 and thePCC20 have the same format, although additional embodiments may provide for account numbers with varying formats. In an exemplary embodiment involving credit, debit or other banking cards, theSTN15 has the same industry standard format that is used for the regular banking cards (e.g., 15 or 16 digit numbers). Preferably, the numbers are formatted such that one is unable to tell the difference between aSTN15 and a regular physical charge card. Alternatively, however, the card provider/product identifier (e.g., BIN range, first 6 digits, etc.) numbers may be different so as to differentiate the STNs from regular charge card numbers. In referencing theSTN15 and thePCC20 number, it should be appreciated that the number may be, for example, a sixteen-digit credit card number, although each card provider has its own numbering system, such as the fifteen-digit numbering system used by American Express. Each company's card numbers comply with that company's standardized format such that a company using a sixteen-digit format will generally use four spaced sets of numbers, as represented by the number “0000 0000 0000 0000.” The first five to seven digits are reserved for processing purposes and identify the issuing bank, card type etc. In this example, the last sixteenth digit is used as a sum check for the sixteen-digit number. The intermediary eight-to-ten digits are used to uniquely identify thecardholder1. The invention contemplates the use of other numbers, indicia, codes or other security steps in addition to the use of theSTN15, but in an exemplary embodiment, only theSTN15 is provided to themerchant2.
• In a preferred embodiment, the[0055]STN15 is randomly and instantaneously generated by thecard provider3, usually upon a cardholder's request, and can be distributed to thecardholder1 by a variety of methods (online, telephone, wireless, email, regular mail, etc.) all of which should be secure and dependent upon verification of the cardholder's identity. Unlike the temporary transaction numbers disclosed in the prior art previously discussed, in a preferred embodiment, although not required, theSTN15 is immediately active (and usable) once it is associated with the cardholder's designatedPCC20 and provided to thecardholder1. This feature minimizes the possibility that amerchant2 will obtain a transaction number that will be worthless because it was not properly activated by thecardholder1. While the present invention may contemplate a previously allocated pool of numbers that needs to be activated, an exemplary embodiment of the present invention includesSTNs15 that are instantaneously and randomly generated, and are usable upon receipt by thecardholder1 without the need for separate activation.
• In another preferred embodiment, the[0056]STN15 may have limited-use (or conditions-of-use) parameters placed upon it by either thecardholder1,merchant2, or thecard provider3 in order for the numbers to be restricted for particular uses. Alternatively, thecardholder1 is able to choose system default parameters of use. Parameters may include, for example: (i) use of theSTN15 is good for a predetermined number of transactions; (ii) cardholder-determined expiration dates (i.e.,STN15 will be generated with expiration dates that are associated but unrelated to the expiration date of the cardholder'sPCC20 number, other than that it cannot exceed the expiration date of thePCC20 account); (iii) limiting use of theSTN15 to a specified dollar amount, dollar amount per transaction, total dollar amount for predesignated number of transactions, maximum dollar amount per month, etc.; (iv) use of theSTN15 for a specified merchant only; (v) restricting use to a specified user, other than primary cardholder (e.g., child, spouse, gift recipient, etc.); or (vi) any combination of these or similar features, for example, a number can be used at a specified merchant only for a pre-designated number of transactions and for a maximum dollar amount. In an exemplary online embodiment, acardholder1 may desire to require all online transactions (e.g., purchases) be performed using only STNs, or alternatively, be performed only with specific merchants as defined. If the cardholder (or another individual) uses a physical charge card number for an online payment in violation of this condition, thecard provider3 would decline the authorization.
• These parameters not only provide increased security, allowing a[0057]cardholder1 to tailor theSTN15 to a particular use, but an ancillary benefit is the ability of a cardholder to select preferences to control spending for themselves or others who have registered eligibility to use the card (e.g., spouse, children, etc.). These preferences may include: Restrictions (cardholder1 may choose to restrict use on certain sites or can pre-approve spending at particular sites); date range (cardholder1 can select a period of time when transactions may occur); maximum budget amount (cardholder1 can pre-set spending limits within certain periods of time or in certain categories (e.g. groceries, books, clothing)); credit and balance availability (cardholder1 can check credit or demand deposit balance availability prior to transacting); non-currency based accounts, such as Reward Points as Currency (cardholder1 can use reward points (e.g. Membership Rewards™, Blue Loot™) as currency to pay for purchases); and Gift Products (cardholder1 can use aSTN15 to fund gift products to others for designated amounts).
• As shown in FIG. 2, an exemplary embodiment of the present invention includes steps for: (i) registering a[0058]cardholder1 to use the card provider's3 transaction services (step100); (ii) receiving from a cardholder1 a request for a STN15 (step105); (iii) generating aSTN15, associating theSTN15 with aPCC20, applying limited-use conditions, if desired, and issuing theSTN15 to the cardholder1 (step110); (iv) processing a merchant's2 authorization request involving theSTN15 to determine if use of the STN is authorized (step115); (v) processing a settlement request, paying the merchant, and billing the cardholder1 (step120); and (vi) handling disputes and other customer service issues from the merchant or cardholder relating to use of the STN15 (step125).
• FIG. 8 depicts an overview of the components of an exemplary transaction system. In general, the card provider's computer system utilizes[0059]front end13 andbackend14 processing systems. Thefront end13 system comprises, inter alia, a user interface system4 (e.g., web server, IVR, etc), anapplication server5, aSTN database6, and a card authorization system (CAS)7. Theapplication server5 andSTN database6 may, at times, be referred to collectively as the STN transaction system (or service)18. Referencing FIGS. 2 and 8, thesefront end13 components facilitate (i) cardholder registration (step100), (ii) request for a STN15 (step105), (ii) generation and issuance of the STN15 (step110), and (iv) the STN authorization process (step115). Thebackend14 system comprises, inter alia, afinancial capture system10, a back-end application service8, an accountspayable system9 and an accountsreceivable system11. Again referencing FIGS. 2 and 8, thebackend14 components facilitate transaction settlement (step120). In an exemplary system, the dispute handling and customer service processes (step125) include, inter alia, in addition to the above mentioned systems, a system for identifying aPCC20 from aSTN15, a letter generating system for sending dispute inquiries tocardholders1 andmerchants2, and a system that accepts incoming communication frommerchants2 and converts theSTN15 received to thePCC20 for the purpose of facilitating the dispute handling process. More specifically, as shown in FIG. 8, thecard provider3user interface system4 provides thecardholder1 with access to the card provider's transaction services. It is through this interface that thecardholder1 may register with thecard provider3, may request aSTN15, and, in response thereto, will receive from the card provider3 aSTN15 that is associated with hisPCC20. Thefront end13 system also utilizes at least oneapplication server5 that processes incoming information, applies the appropriate business rules/condition sets as necessary, and generates appropriate outgoing responses. Theapplication server5 is configured to support interaction with, inter alla, theuser interface system4 and aSTN database6. Anexemplary STN database6 is a relational database comprising various tables for managing and translating a variety of information, such ascardholder1 profiles, charge card data, transaction data, merchant data, conditions/rules set profiles, etc. FIG. 9 illustrates two examples of exemplary tables within theSTN database6. STN table166 may contain a variety ofdatabase fields170 relating to the cardholder's STN account. These fields may contain, in addition togeneral STN15 andPCC20 account information, the business rule/condition set profiles associated with use of theSTN15. A STN Transaction Information Table168 containsdatabase fields172 for storing information relating to a particular transaction. As a skilled programmer can appreciate, the processing mechanisms and data structure methods can be structured in a variety of ways. In short, theuser interface system4,application server5, and theSTN database6 are suitably connected to facilitate the generation and issuance of aSTN15 and are further associated with a card authorization system (CAS)7, in order to process from themerchant2 an authorization request involving aSTN15.
• When processing a merchant's request for settlement, i.e., to be paid for a transaction, the financial capture (FINCAP)[0060]10 system receives and captures the financial information (e.g., transaction amount, date, merchant identification (SE) number,STN15, etc.). The backend application service8 interfaces with theSTN transaction system18, as necessary, to determine if the number is a valid STN15 (i.e., not a phony number). If theSTN15 is valid, theAP system9 pays themerchant2. TheSTN database6 is updated to reflect the transaction information. The STN transaction system18 (or alternatively the backend application service8) substitutes thePCC20 number for theSTN15 and forwards to theAR system11 for billing.
• Although the present system for facilitating transactions may exist within one card provider system, exemplary embodiments contemplate use with other third party authorization and settlement systems and networks. FIGS. 8 and 11, for example, depict third party authorization networks (FIG. 11, 91 and[0061]92) and settlement networks (FIG. 8,93-95) that may be integrated to form parts and/or processes of the present invention.
• Exemplary processes of the present invention are discussed in greater detail below.[0062]
• Registration (FIG. 2, step[0063]100)
• Two exemplary screen shots relating to an exemplary registration process are shown at FIGS. 3 and 4. FIG. 3 depicts a splash page for an American Express® Private Payments[0064]^SM program. The Private Payments^SM program is an exemplary embodiment of the present invention. Here, anew user23 may enroll to use the program or an existing user may access a number of program features25, e.g., review account, request anew STN15 number or download software. Thecardholder1 generally enters this site by entering an appropriate card provider URL into her browser, by clicking on a link provided by a merchant's website, or alternatively, by an automatic pop-up feature that may appear upon recognizing particular URL or HTML codes.
• To enroll (or register), the[0065]cardholder1 is linked to a registration page (FIG. 4) and prompted for information. Information may include thecardholders name30,email address31, card account number32 (e.g., PCC20), last four digits ofsocial security number33, cardholder's date ofbirth34, etc. Any suitable authenticating information will suffice. By selecting “continue,” thecardholder1 is provided with a username and password, or preferably, the cardholder is allowed to select her own username and password. Theuser interface system4 processes this information and suitably interfaces with the STN transaction system18 (FIG. 8) to register the cardholder. As one of skill in this art will appreciate, registration may take many forms and may be accomplished in a variety of ways. For example, acard provider3 may choose to automatically enroll all new charge card applicants and return to the cardholder a username and password with the physical credit card. Although FIGS. 3 and 4 show an online registration process, it should be appreciated that this process may take place via any suitable user interface system.
• In one embodiment, during the registration process, the[0066]cardholder1 may choose to select or define various parameters, preferences, and programs to tailor the transaction system to the cardholder's particular needs. Additional embodiments allow thecardholder1 to select or define parameters, preferences or programs at any point in the transaction process. In other words, thecardholder1 has the flexibility to select parameters each time (e.g., during registration, log-in, upon STN request, etc.) aSTN15 is generated or may apply universal parameters to everySTN15 generated. With these selections, for example, thecardholder1 may (i) designate a specific credit card to function as the primary charge card number; (ii) associate the transaction system with other programs such as a non-currency based membership rewards program, an online digital wallet, an online shopping gateway (e.g., American Express's “ShopAMEX”), an online gift check program (e.g. E-Gift), preferred buyer's programs, etc.; (iii) provide password protected access to family members; (iv) activate a smartcard feature allowing remote random generation of secondary transaction numbers; (v) designate cell phone, email or pager numbers to utilize with the voice or automated response secondary transaction number generation feature; (vi) and other banking and transaction features that may be apparent to those skilled in the art. For more information on loyalty systems, transaction systems, electronic commerce systems and digital wallet systems, see, for example, the Shop AMEX™ system as disclosed in Serial No. 60/230,190 filed Sep. 5, 2000; the MR as Currency™ System disclosed in Serial No. 60/200,492 filed Apr. 28, 2000 and Serial No. 60/201,114 filed May 2, 2000; Wireless MR as disclosed in Serial No. 60/192,197,296 filed on Apr. 14, 2000; a digital wallet system disclosed in U.S. Ser. No. 09/652,899 filed Aug. 31, 2000; a stored value card as disclosed in Ser. No. 09/241,188 filed on Feb. 1, 1999, all of which are herein incorporated by reference.
• Log-in and Request for STN[0067]15 (FIG. 2, step105):
• A registered[0068]cardholder1 generally accesses the card provider's transaction system by logging into the system via any suitableuser interface system4. FIG. 5 depicts an exemplary online log-inscreen130, where thecardholder1 is prompted for authenticating information such as ausemame132 andpassword134. Alternative systems contemplate authentication via any suitable user interface system. For example, an embodiment employing a portable data device such as a smart card facilitates authentication by swiping the smart card through a smart card reader and providing the appropriate PIN. After entering the appropriate authenticating information and clicking the log inbutton135, the information is routed through the user interface system4 (e.g., web server) to theapplication server5, where, as shown in FIG. 5, theapplication server5 retrieves information relating to the cardholder's account from theSTN database6. If thecardholder1 has registered multiple charge card accounts, in oneembodiment136, as depicted in FIG. 6, the program prompts thecardholder1 to choose from a list of accounts from a pull-down menu138. Thecardholder1 then selects at least one account to be the primary account or to be included in a primary group of accounts (when it is desired for theSTN15 to be associated with more than one account). In other embodiments, the user interface system4 (e.g., web server) will return additional options for thecardholder1, such as prompting thecardholder1 to choose from several condition fields such as those previously mentioned (e.g., restricting use to a particular merchant, amount, allowing use by other recipients, etc.).
• [0069]STN15 Generation and Issuance (Distribution) to Cardholder1 (Step110):
• An exemplary online transaction process begins with a[0070]cardholder1 desiring to purchase products or services from an online merchant's website. In this exemplary online system, thecardholder1 selects products from a merchant'sonline website2, is routed or clicks to the merchant'spayment page2a(FIG. 5). Thecardholder1 is hyperlinked (manually or automatically) to a card provider's web site to log in130 (FIG. 5), which resides on and is managed by the card provider's user interface system4 (e.g., web server), and, upon logging in, obtains aSTN15 that may then be “cut and pasted,” “dragged and dropped” (or alternatively, automatically filled by thecard provider3 or downloaded from a digital wallet) into the payment fields144,146,148 (FIG. 7) on thepayment web page2b(FIG. 7). In alternative embodiments, the system includes one or more of the following: thecard provider3 sends theSTN15 directly to themerchant2, theSTN15 is encrypted or encoded, thecardholder1 enters additional security numbers or other indicia or a biometric sample is required from thecard provider3. In an exemplary embodiment, theSTN15, as will be discussed next, is generated by the card provider'sapplication server5 andSTN database6.
• After authenticating a[0071]cardholder1 during the log-in process, and receiving a request for aSTN15, the process begins for generating aSTN15. Theuser interface system4 prompts the initiation of the number generation process in theSTN transaction system18. In an exemplary random number generation process, theSTN15 is generated (preferably immediately) and provided to the cardholder1 (preferably contemporaneous with the cardholder's request). As previously noted, this allows the number to be usable immediately upon receipt by thecardholder1 without the need for separate activation (although separate activation features are contemplated by the present invention), while minimizing any increased risk of theft or fraud.
• An exemplary random number generation process is depicted in FIG. 10. In this exemplary embodiment, each card provider[0072]3 (FIG. 1) is generally identified by a range of numbers on the physical card, typically called the bank identification number (BIN). Each card possesses a product identifier (e.g., first 6 digits. BIN, etc) that is not part of the random number generation process, but in order to initiate the process, this number must first be selected (step40). It may be preferable for acard provider3 to set aside a set of product identification numbers relating to secondary transaction numbers for specific use with the transaction system. Alternatively, however, some card providers may find it desirable to use the same BIN number designation for both STNS15 and regular charge card numbers so that one cannot distinguish between the two types of numbers. As depicted in FIG. 10, a random eight digit number is generated by the card provider'sapplication server5 using an algorithmic process (step41). Theapplication server5 verifies that the randomly generated number is available (i.e., it is not in use nor has it been used within a certain period of time) (step42). If the transaction number is free (i.e., not in use), a check digit and the selected product identification number is appended to the number (step43). This newly createdSTN15 is then associated with the cardholder'sPCC20 and is provided to the cardholder1 (step45), whereupon theSTN database6 is updated to reflect that thisparticular STN15 is in use and associated with aPCC20 account. If, duringstep42, it is determined that the number is in use, the number generation process is repeated up to a preset number of times (e.g., 3) (step44). After attempting and failing to generate a non-used random number for a preset number of times, a non-used random number is physically selected from the STN database6 (step46).
• After the[0073]STN15 is generated, conditions of use parameters are applied, and are associated with thePCC20, theSTN15 is then distributed (i.e., issued) to acardholder1 for use in facilitating a transaction. Communication of theSTN15 may occur via a number ofuse interface systems4. For example, FIG. 7 depicts an exemplary online interface where the STN15 (Private Payment number) is returned to thecardholder1. This embodiment shows how thecard provider window140 overlays a merchant'sonline payment page2b. Thecardholder1 selects the appropriate charge card (e.g., American Express®) from the credit type filed144. Thecardholder1 is then able to “cut and paste” or “drag and drop” the STN15 (present in the STN field142) into thecredit card field146 on thewebpage2b. Finally, thecardholder1 chooses theappropriate expiration date148 and completes the transaction by selecting the “purchase now”button150. Although this embodiment describes linking to a card provider's web site to receive aSTN15, an additional embodiment configures the user interface4 (e.g., web server) andSTN transaction system18 to seamlessly interact with the merchant's website to eliminate the need to separately link to thecard provider3. In this instance, the generation and issuance of theSTN15 would use themerchant2 as a gateway to thecard provider3. Any number ofinterface systems4 can be used to facilitate the processes described above (FIG. 2steps100,105,110).
• For example, as just described, distribution of the[0074]STN15 may occur via a “server to desktop” arrangement where a connection is established between the card provider's web-server4 and the cardholder's1 desktop computer, using SSL 3.0. With this exemplary system, the number is generated by the application server5 (according to an algorithmic processing feature) utilizing a random number generation process such as that previously described and delivered to theweb server4. The number is then displayed on the cardholder's1 desktop. While pre-registration is not required, in an exemplary embodiment, acardholder1 will have previously registered at the card provider's3 online web site providing all required personal information, primary charge card account numbers, and establishing a cardholder ID and password (if not already established). The cardholder ID and password are then used for verification ofcardholder1 identity when logging into the card provider'sweb server4.
• Distribution of[0075]STNs15 may also occur via a “server to IVR” arrangement, where acardholder1 calls thecard provider3 in order to obtain aSTN15. In this exemplary embodiment, a voice response menu enables thecardholder1 to choose the transaction option, and allows thecardholder1 to enter a main account number. Once identity is verified, a link to theapplication server5 is established, prompting generation and delivery of aSTN15 over the phone. In this embodiment, thecardholder1 provides authenticating information by providing date of birth (DOB), a PIN, etc. Once this verification number is matched to customer's records, theSTN15 is distributed. Of course, this process would also work with a live operator arrangement.
• Additional distribution embodiments include a number of different delivery vehicles and/or portable data devices, such as use of wireless devices, smart chip encoded devices, personal digital assistants (PDAs), pagers, interactive TVs, etc. For example, a “server to wireless device” is used where a wireless phone with internet browser is able to access the card provider's transaction site via the card provider's online service web site. The[0076]STN15 can be delivered via text or voice. Additionally, with the use of encryption keys, the wireless device can be used as payment vehicles (e.g.,STN15 is delivered from thecardholder1 tomerchant2 or other customer with Blue Tooth or other beaming technology). Again, verification of identity can be accomplished by a variety of means, including cardholder ID and password, DOB, PIN number, SIM cards in phones, etc.
• Another exemplary embodiment of the transaction system, utilizing one or more of the distribution arrangements above, includes situations where a Point of Sale terminal (POS) is not present (e.g., submitting a[0077]STN15 to amerchant2 such as, for example, a plumber at home). In this exemplary embodiment, thecardholder1 may not have cash or may not want to provide herPCC20 number to the vendor due to concerns about unauthorized re-use. As such, thecardholder1 calls thecard provider3 seeking to obtain aSTN15 with either pre-defined conditions of use or cardholder determined conditions of use. A voice recognition system asks for aPCC20 number, the amount she wants to authorize, a merchant ID (e.g., SE number), or any other conditions of use. The voice recognition system communicates with theapplication server5 and, alternatively, alsoCAS7, to generate theSTN15. TheSTN15 is then transmitted to thecardholder1 who in turn provides to themerchant2. Additionally, themerchant2 can also receive, if desired, an immediate call from the voice response unit to provide an approval code. One skilled in the art will appreciate that this system can be used in association with landline phones, cellular phones, pagers, handheld computers or any other PDA devices.
• Another exemplary embodiment of the present invention utilizes a smart card system or similar portable data device to generate and/or distribute a[0078]STN15 to thecard provider1 ormerchant2. The smart card may facilitate the generation of aSTN15 in a number of different ways. In one embodiment, the smart card device itself generates theSTN15 from a self-contained processing chip. In another embodiment, the smart card interfaces with the card provider'suser interface system4 to cause thecard provider3 to generate a number. In another embodiment, the smart card supports interaction with a merchant's transaction processing system. “Smart card” is referred to herein to include any microchip enabled transaction card that is capable of being read by a smart card reader, and is also referred herein to generally refer to any portable data device that is capable of processing information. In an online embodiment, thecardholder1 installs a smart card reader and associated software to be used with the cardholder's computer system that is capable of connecting to the internet. When desiring to make an online purchase, thecardholder1 swipes or inserts his smart card through a card reader and enters an appropriate PIN. Once properly authenticated, the card provider transaction system generates and issues aSTN15 to thecardholder1. In another embodiment, themerchant2 may have a smart card reader capable of interfacing with the card holder's smart card. In this embodiment, thecardholder1 swipes or inserts the smart card through the merchant's reader, a PIN is entered and theSTN15 is displayed to themerchant2. Additional information relating to smart card and smart card reader payment technology is disclosed in Serial No. 60/232,040, filed on Sep. 12, 2000, and U.S. Pat. Nos. 5,742,845; 5,898,838 and 5,905,908, owned by Datascape; which are hereby incorporated by reference.
• With an exemplary online smart card embodiment, the[0079]cardholder1 interfaces with the card provider's user interface system4 (e.g., website) and registers the smart card for use with the transaction system option. Thecardholder1 downloads a program and the program is stored on the cardholder's computer. A STN transaction icon (e.g., Private Payments^SM button) appears on the cardholder's browser or an icon appears on the display (e.g., Microsoft Windows® system tray). This button, driven by a card provider specific application (activator) that resides on the cardholder's computer, appears each time thecardholder1 launches the browser (or alternatively the button appears at any predetermined intervals, cycles or URLs).
• The[0080]cardholder1 suitably links to an online shopping site, orders a product or service or fills a shopping cart and goes to the payment page. Thecardholder1 clicks the STN payments button on the browser or the icon on the display (or the activator automatically launches the STN button) and a pop-up window appears, asking thecardholder1 to enter the smart card into the smart card reader and, in a preferred embodiment, enter his PIN number. In an alternative embodiment, a PIN may not be necessary. In another embodiment, any other security data or functionality may be included. Upon entering this information, theSTN15 will be generated by the card provider's STN transaction system18 (FIG. 8), or, in another embodiment (discussed below) will be generated directly from the smart card chip; and a pop-up screen containing theSTN15 number will be displayed on the computer. Thecardholder1 then “drags and drops” or “cuts and pastes” the randomly generatedSTN15 and other transaction information (e.g., card type, expiration date) into the online order form and completes the transaction. In an alternative embodiment, theSTN15 and other transaction information are automatically filled into the web shopping page by the card provider's web server.
• Another exemplary embodiment of the present invention integrates a smart card with an online merchant's website, which may or may not be utilized by the[0081]cardholder1. For example, in one aspect of this embodiment the smart card cardholder goes to a merchant website and a “smartchip” payments checkout button appears on the credit card payments page. The card provider's transaction system will be invoked if thecard holder1 checks out via the smartchip payments button. In a preferred embodiment, the transaction system option is “behind the scenes.” Thecardholder1 goes to an online shopping site, orders a product or service or fills a shopping cart and goes to checkout page. Thecardholder1 clicks the smartchip payments button on the browser and a pop-up window appears, asking thecardholder1 to enter the smart card into the smart card reader and, optionally, enter his PIN number. Upon entering this information, the system logs thecardholder1 into smartchip payments checkout process. Thecardholder1 will hit “check out” and the smartchip payments checkout process may auto-generate and auto-fill theSTN15 and transaction information into the appropriate payment field (an applet may be read off of the smartcard to transfer number to merchant site.) In this embodiment, theSTN15 will be auto-generated off the chip, where the smart card chip may use the Java or Multos operating systems and may use a random number generating algorithm. In one embodiment, the smart card chip is able to access the card provider's transaction system or, alternatively, contain a pool of possible numbers (in order to avoid generating the same number twice). The number is also need sent back to theSTN transaction system18 in order to match thePPC20 number with theSTN15.
• In another embodiment using a smart card, a secure electronic transaction (SET) protocol is used to avoid or minimize system/server contact. In this embodiment, the[0082]PCC20 number is on the chip but is encoded. The SET protocol is preferably an encryption algorithm on the chip where part of the initial data would be the cardholder'sPCC20 number. The algorithm could be decoded by thecard provider3 but not by themerchant2 to come up with the real account number. In one embodiment, themerchant2 routes the authorization to the card provider via a BIN number rather than thePCC20 number. When the transaction is sent from themerchant2 to thecard provider3 for authorization, theCAS7 preferably triggers the decode algorithm to complete the process, linking theSTN15 to thePCC20 account.
• Another embodiment contemplates the use of the[0083]STN15 with a transponder system comprising a first means for generating or storing a signal that includes an encodedSTN15 and a second means for reading or receiving the signal. In an exemplary embodiment, acardholder1 waves a small transponder unit in front of the merchant's2 receiving unit. TheSTN15 information can be sent/received by a number of known methods (e.g. optical, magnetic, infrared, radio frequency, etc). Themerchant2 reader captures theSTN15 and forwards the STN15 (with the associated transaction information) to the card provider'sCAS7 as previously described. The transponder units may be set up in a number of ways. Each transponder device may hold oneSTN15 with certain predefined parameters or each transponder device may haveseveral STNs15.
• [0084]STN15 Authorization Process (FIG. 2, step115):
• Referencing FIGS. 1 and 11, after the secondary transaction number (STN[0085]15) is provided to themerchant2, themerchant2 submits an authorization request to thecard provider3, as it would with any other credit card transaction. This request is routed to a card authorization system (CAS)7 for authorization (step80). TheCAS7 recognizes the transaction as involving aSTN15 and forwards the transaction information to the Authorization Request Listener.77 program on the application server5 (step81). TheAuthorization Request Listener77 passes the transaction information to a CAS Authentication Component78 (step82). The CAS Authentication Component78 determines if use of theSTN15 has satisfied the previously defined conditions of use parameters. To determine this, the CAS Authentication component78 looks to theSTN database6 for the conditions-of-use rules and the primary charge card number (PCC20) that are associated with the particular STN15 (step83). If the use of theSTN15 complies with the rules of use, the CAS Authentication component78 returns an authorization message and the associatedPCC20 to CAS7 (step84).CAS7 then performs an authorization request for thePPC20, as is typically done with any physical charge card, to ensure that the primary charge card conditions (e.g., credit limit, expiration date, etc.) have been met.
• If[0086]CAS7 authorizes use of thePCC20, the transaction involving theSTN15 is approved and an approval code will be generated. However, thePCC20 must first be replaced with theSTN15 and theSTN database6 must be updated to reflect this transaction data. This is accomplished byCAS7 returning to the CAS Authentication component78 an approval message with the transaction data (step85) and CAS Authentication component78 forwarding to a reversal processing engine79 (step86). Thereversal processing engine79 interfaces with theSTN database6 to re-substitute theSTN15 for thePCC20 and also to update theSTN database6 to reflect the transaction information (step87). For example, if the conditions of use parameters associated with theSTN15 authorized two transactions, thisstep87 updates the cardholder account in theSTN database6 to reflect that only one transaction remains. Thereversal engine79 substitutes thePCC20 with theSTN15 and forwards to CAS7 (step88).CAS7 then provides the results to the merchant2 (step89). If the CAS Authentication Component78 does not authorize use under theSTN15 conditions or ifCAS7 does not authorize use under thePCC20 conditions, the transaction will not be approved. When the use conditions of both the primary charge card and the secondary transaction numbers are satisfied, the transaction is approved. In this preferred embodiment, however, theSTN15 is not deactivated to prevent settlement. To the contrary, settlement may proceed (as discussed next) even when an authorization was declined.
• Additionally, use of other third party networks and systems are contemplated by the present system. One exemplary system allows a[0087]card provider3 to associate STNs to third party accounts, offering the same fraud reduction benefits to external card issuers. Here, in this exemplary system for authorizing STN, amerchant2 submits an authorization request to acard provider3.CAS7, recognizing theSTN15 forwards the request toapplication server5. The conditions of use are checked and the authorization request is modified to substitute theSTN15 with the associated primary account (PCC20). In some cases a merchant identifier may be included in the authorization request. Therefore a translation may occur to substitute thecard provider3 merchant ID with the corresponding third party card issuer merchant ID. The request is then returned back toCAS7 for a normal authorization.CAS7 then recognizes the account as originating from another issuer (third party issuer92), forwards the authorization request to a third party issuer's network for processing (step84a). Thenetwork91 routes the request to the appropriatethird party issuer92 for an authorization determination. Thethird party issuer92 processes the authorization request and returns the result toCAS7 for forwarding back to application server5 (step84b).Application server5 saves the authorization result (approval or denial) and substitutes thePCC20 with theSTN15 and returns toCAS7 for forwarding to themerchant2.
• The authorization and settlement processes may occur as separate steps or as a single step. In one embodiment, referred to herein as an electronic data capture (EDC) system, the[0088]merchant2 sends an authorization request and if the authorization request is approved, a receipt of charges is created and submitted for themerchant2. Separate sequences of file transmissions or messages are therefore not required. Various embodiments, hybids, and modifications of these processes should be apparent to one skilled in this art.
• [0089]STN15 Transaction Settlement (FIG. 2, step120):
• Prior art systems typically deactivate a temporary transaction number during the authorization process if limited-use conditions are not met. As previously explained, because of the uncertainty and variability of the authorization processing, this often results in a transaction numbers being unintentionally deactivated, thereby bringing the transaction processing to a sudden halt. An exemplary embodiment of the present invention overcomes this problem by not “deactivating” the secondary transaction number when predetermined conditions are not met. But instead, allowing the transaction to proceed through settlement, albeit without a valid approval code, where the merchant bears the risk that the amount will later be charged back by the[0090]card provider3 if the transaction is disputed by thecardholder1.
• An exemplary settlement process of this invention involves the backend systems shown in FIG. 8. Specifically, referencing FIGS. 1 and 8, the backend process utilizes a financial capture system (FINCAP)[0091]10 to capture the settlement information (e.g., receipt of charges “ROC” and summary of charges “SOC”) from themerchant2, abackend application service8 to ensure that proper account information is processed, an accountspayable system9 to pay themerchant2, and an accountsreceivable system11 to process the account statement that is provided to thecardholder1. An exemplary embodiment of the settlement process involves a settlement request being made by amerchant2 for a transaction involving aSTN15. All settlement requests are forwarded to the card provider'sback end system14 for processing where the request is initially sent to FINCAP10.FINCAP10 captures the ROC and SOC data and identifies, via the card product identifier (or by any other suitable means), the transaction as involving aSTN15. In another embodiment, the product identifier (or BIN number) does not differentiate between aSTN15 and a regular charge card number. In that instance, it will be necessary forFINCAP10 to call the backend application service8 (which interfaces with the STN database6) to identify theSTN15 from other charge numbers. After theSTN15 is distinguished from the ordinary physical charge cards,FINCAP10 verifies that the number is valid (i.e., exists in the STN database6). If theSTN15 is a valid number,FINCAP10 creates a payment (accounts payable) file including the transaction data and sends a payment message to theAP system9 instructing themerchant2 to be paid. In paying themerchant2, thecard provider3 references only theSTN15 and does not release thePCC20 or any other regular charge card numbers.
• The back-[0092]end system14 processes thecardholder1 STN account information as follows. After capturing the transaction information (ROC and SOC) from themerchant2,FINCAP10 creates a cardholder account (accounts receivable) file and sends a message to the back-end application service8 to process the information for cardholder billing. Recognizing that the transaction involves aSTN15, the back-end application service8 replaces theSTN15 with thePCC20, updates the cardholder STN account information in theSTN database6 to reflect the appropriate transaction settlement information, and processes the transaction as with any other transaction. Thebackend application service8 sends the transaction details to theAR system11, where theAR system11 sends the proper statement to thecardholder1, typically referencing only thePCC20 number. In another embodiment, theAR system11 may process the statement where the transactions are further categorized and itemized by both thePCC20 number and theSTN15.
• As previously noted, it may often be the case with prior art systems, that the temporary transaction number is inadvertently deactivated during the authorization phase and completion of the transaction is not possible. e.g., multiple payment purchases. The present transaction system overcomes this problem by ensuring that valid transaction numbers will be processed. If the conditions-of-use parameters are not met, the[0093]cardholder1 is, under an exemplary embodiment of the present system, able to dispute the transaction and have the transaction charged back to themerchant2 during the dispute handling process (discussed next). During this dispute handling phase, thecard provider3 will retrieve information from theSTN database6 to determine if the disputed information was “authorized”, i.e., has an associated approval code. If the transaction was not “authorized” because the conditions of use parameters were not satisfied, the amount will be charged back to themerchant2 according to predefined business rules.
• Another embodiment provides for checking the approval codes and other conditions during settlement. Here, transaction information (approval code, SE number, or other information) may be checked during settlement. For example, the backend application service[0094]8 (or the application server5) may compare transaction information to a business rule or conditions set associated with acardholder1 STN account. If conditions of use have not been met or if a valid approval code is missing, theservice8 orserver5 may cause a charge back to be issued to the merchant to offset the previous merchant payment. In other words, in this alternative embodiment, where anSTN15 transaction is processed through settlement, the following events may occur in sequence. First, a payment file is established once it is determined that theSTN15 is a valid number. Second, the merchant is paid. Third, the system applies the business rules or conditions for the particular account associated with theSTN15. Fourth, if it is determined that themerchant2 should not have been paid in the first instance because the transaction conditions were not met or an approval code was not present, the system will execute a charge back to themerchant2. This settlement processing may be transparent to thecardholder1 since, before the AR system releases a cardholder billing statement, the merchant is paid and then charged-back resulting in no outstanding balance to thecardholder1.
• As shown in FIG. 8, the present invention contemplates the interaction of clearing and settlement systems other than those of the[0095]card provider3. This exemplary system allows acard provider3 to clear and settle STN transactions where anSTN15 is associated to a third party account, meaning that themerchant2 is paid and the charge is billed to thecardholder1. As such, an exemplary embodiment of the present invention is configured to support interaction with third party networks and systems. Here, thebackend application service8, upon receiving aSTN15, recognizes that the associatedPCC20 originated with anothercard issuer92. Thebackend service8 separates the transaction into two transactions (a clearing transaction and a settlement transaction). A substitution occurs in the clearing transaction where theSTN15 is replaced by the associatedPCC20. Also, a translation may occur to substitute thecard provider3 merchant ID with the corresponding third party card issuer ID. The transactions are then forwarded to a third party clearing andsettlement network93. The third party clearing andsettlement network93 handles the routing, as appropriate, to a merchant acquirer's accountspayable system91 and an issuer's accountsreceivable system92. As noted above, the accounts payable system ensures that all correspondence with themerchant2 references theSTN15.
• Dispute Handling and Customer Service Process (step[0096]125):
• The dispute handling process of the present invention involves situations where a[0097]cardholder1 ormerchant2 disputes charge that is associated with a transaction involving aSTN15. Generally, acardholder1 disputes a charge by contacting thecharge card provider3 via phone, mail, or internet. As previously noted, anexemplary AR system11 typically bills thecardholder1 with reference to only thePCC20 number. The computer systems of the present invention allow the card provider's customer service representatives to lookup information based on, inter alia, theSTN15 or thePCC20 number. FIG. 12 depicts an exemplary look-upscreen175 for reviewing the primarycharge card account20 and the transactions associated with theSTNs15.
• With respect to a cardholder initiated dispute, the representative initiates a dispute through a dispute handling system (DHS) to obtain the case avoidance or case set rules for cardholder disputed transactions. One of the case avoidance or case set rules provides for a look up from the[0098]STN database6 to verify that the transaction was processed with an approval code. The rule set may provide for, inter alia, an automatic charge back of the transaction amount to the merchant if anSTN15 transaction is submitted without an approval code. The DHS or the representative initiates acardholder1 ormerchant2 contact (via phone, mail, internet).Disputes involving STNs15 may be automatically routed to predefined STN queues based on industry type (i.e., airline, car rental, etc). Contact letters may be automatically filled with information retrieved from theSTN database6. The adjustment file accesses the application server5 (or backend application service8) to substitute thePCC20 number with theSTN15. A letter file is then generated and an electronic transmission system routes electronic contacts to and from various merchant interfaces.
• In an exemplary system for handling disputes from[0099]merchant2, amerchant2 contacts thecard provider3 via normal channels. The card provider's representative generally accesses a customer service application that is used to service merchants. This customer service application identifies the account by aSTN15 in dispute. A case is set-up with theSTN15 and is managed via adjustment management systems. The adjustment management system and a letter generating system access theSTN transaction system18 for the account number swap, where thePCC20 number is replaced with theSTN15 for financial adjustments intended for thecardholder1. The remaining inquiry is processed as with existing dispute handling systems.
• Although the previously described embodiments generally relate to a cardholder's[0100]1 request for aSTN15, themerchant2 may also find it desirable to request secondary transaction numbers from thecard provider3 in order to limit exposure to credit card fraud. In traditional transaction processes, upon completing a transaction, themerchant2 stores transaction information (including the customer's credit card number) in a merchant database. This database of information is subject to credit card fraud in that a thief could hack into the merchant's computers to steal its customer's credit card numbers. To limit exposure, themerchant2 may desire to replace those customer credit card numbers withSTNs15 that are associated with the cardholder's primary credit card number (e.g., PCC20), i.e., the merchant may not want its database filled with actual customer credit card numbers. In this situation, only thecard provider3 maintains the actual credit card number and themerchant2 retains only theSTN15. In an exemplary process, themerchant2 receives a regular credit card number from acardholder1 to facilitate a transaction. Themerchant2 submits the number to acard provider3 for authorization, requesting that thecard provider3 instead of returning the regular credit card number, return a STN15 (and approval code) that is associated with the regular credit card. In response, the card provider generates aSTN15, associates the number to the regular credit card number (which becomes the primary account (e.g., PCC20)), checks to see if authorization is appropriate and returns the authorization record (only referencing the STN15) to themerchant2. Themerchant2 processes the transaction through the normal settlement channels, referencing theSTN15 instead of the regular credit card number. When retaining transaction records, themerchant2 replaces the primary credit card number with theSTN15 and maintains theSTN15 in its database.
• In another embodiment, the[0101]merchant2 accepts only STNs15—not regular credit card numbers—from cardholder's to complete transactions. For the same reasons stated above, themerchant2 may desire to limit receipt of regular charge card numbers to limit exposure to credit card fraud. In one exemplary embodiment, themerchant2 computer system differentiates between STNs and regular charge card numbers and will not allow customers to use regular charge card numbers to facilitate a transaction (i.e., will refuse the transaction). As previously described, however, theSTN15 and the regular charge card may be transparent to themerchant2 making it difficult for themerchant2 to differentiate between theSTN15 and the regular charge card. In this situation, in an exemplary embodiment, theSTN15 will be identified during the authorization process by thecard provider3, where if theSTN15 does not meet certain conditions defined by themerchant2, the transaction will not be authorized. For example, the merchant could require that all customer transactions be completed with aSTN15 that has limited-use conditions restricting use to the amount of the transaction or restricting use to the particular merchant. During the authorization process, theSTN15 is compared with the merchant-defined conditions where if the conditions are not satisfied, the authorization request will be denied. After completion of the transaction, and upon satisfying themerchant2 conditions, theSTNs15 have little to no value and would be of minimal value to a potential thief.
• Several additional embodiments of the transaction system are provided below.[0102]
• In one embodiment, the[0103]STN database6 is used to facilitate the merging of a newly acquired cardholder base with an established cardholder base. For example, when a bank or other institution sells a cardholder base to acard provider3, thecard provider3 creates new physical accounts for the acquired cardholders and does not issue new cards. TheSTN database6 is updated to associate the acquired cardholder account numbers to the newly created accounts. This allows the cardholders' existing physical cards to still be used and processed appropriately. The card provider (BIN) routing is modified for the acquired accounts so authorization requests and settlements are sent to thecard provider3 instead of to the bank or other institution.CAS7 andFINCAP10 recognize these acquired accounts asSTN15 accounts and translate the numbers appropriately. The end result is that charges made by the acquired cardholders end up on a statement generated by thecard provider3.
• In another exemplary embodiment of the transaction system, a[0104]card provider3 may provide a line of credit to a customer or to amerchant2 or group of merchants who can private label for use by their customers. This allows themerchant2 to provide a branded line of credit with minimal or no changes to the credit card authorization and settlement process. In one embodiment, themerchant2 approves a line of credit or asks thecard provider3 to approve a line of credit for the customer. The card provider would then issue aSTN15 to the customer via themerchant2. ThisSTN15 is generally used with themerchants2 who are issuing the line of credit. When the customer wants to make a purchase using the merchant's line of credit, the merchant forwards a standard credit request to thecard provider3 with theSTN15 used as the credit card number in the transaction protocol. Thecard provider3 verifies that the line of credit is authorized and was submitted by themerchant2 issuing the line of credit associated with thisSTN15. The card provider transaction system (via the STN transaction system18) is capable of denying usage of this line of credit at another non-participating site. Thecard provider3 may provide a private label or co-branded web site to apply for the line of credit. The card provider'sback end system14 then bills the customer and pays the merchant. Themerchant2 may keep the electronic line of credit privately at their site, or provide it to the customer. The authorization system would not authorize usage at other sites.
• FIG. 13 depicts an exemplary transaction process for use in providing lines of credit to[0105]merchants2. Acardholder1 or customer (who may or may not be an existing card member of the participating card provider3) applies for an electronic line of credit (ELOC) with a merchant2 (step221), themerchant2 redirects thecardholder1 to the card provider's3 website to fill out the ELOC application30 (step222). Afraud check31 is performed (step223) and a credit inquiry is typically performed by any credit bureau company33 (step224). If acard processing system32 determines that credit is acceptable, an account is set up (step225). Aphysical card34 is not generated as with typical processes and may need to be purged depending on the particular system set-up (step226). The account is sent to the account management system35 (step227) and then forwarded to theSTN database6 and the application server5 (step228). Thecardholder1 account is then related to a valid merchant identification number such as the SE number36 (step229). An account is then set-up with aELOC profile37 and at this point the secondary transaction ELOC number is passed back to the cardholder1 (step230). Themerchant2 submits the ELOC payment request to CAS7 (step231), andCAS7 routes the ELOC to the STN system (step232), where the STN system verifies that the SE number is approved for this particular ELOC (step233). The STN system translates the ELOC STN to the related account in the account management system and returns the ELOC STN to merchant (step234). The merchant is then required to submit the authorization code with the receipt of charges (ROC) and summary of charges (SOC). The merchant submits the ROC and/or SOC to the card provider's FINCAP10 (step235), whereupon FINCAP forwards the ELOC to the STN system (step236). The STN system verifies that (i) this SE number is valid for the particular ELOC account (step237) and (ii) the particular transaction was authorized for the specific ELOC account (step238). The STN system then flips the card number, returns it to FINCAP10, whereupon, the number is forwarded to the card provider's accounts receivable system11 (step239). FINCAP forwards the ELOC STN and associated information to the Accounts Payable system9 (step240) and pays the merchant2 (step241).
• Another exemplary embodiment allows a cardholder to fund an online digital wallet with the secondary transaction number. In this embodiment, after generation and association with the primary charge card, the secondary transaction number is provided to the cardholder to use within a designated digital wallet, which may reside locally at the cardholder's computer or may be stored in an online password protected account.[0106]
• In yet another alternative embodiment, the secondary transaction system may be used to facilitate programs involving non-currency tender, such as the American Express® Membership Rewards as Currency™ system that is detailed in U.S. Provisional Application No. 60/200,492, filed on Apr. 28, 2000, and U.S. Provisional Application No. 60/201,114, filed on May 2, 2000, which are hereby incorporated by reference. One embodiment of this system, depicted in FIG. 14, allows a[0107]cardholder1 to create aSTN15 to be used to spend membership rewards points. In general, a membership or incentive rewards program is a loyalty program that rewards cardholders for using their charge card to make purchases. Cardholders accumulate points by using a participating charge card or by purchasing products at a participating merchant. These points may then be converted to a monetary value and redeemed to purchase merchandise.
• As depicted in FIG. 14, a[0108]cardholder1 accesses and logs onto the card provider's services via a user interface system4 (e.g., an Internet connection) (step251). Thecardholder1 proceeds (clicks on hyperlink) to the membership rewards (MR)system95, where she indicates that she would like to use her membership reward points that are available in her MR account (step252). TheMR system95 reports to thecardholder1 how much the available MR points are worth (step253). Thecardholder1 indicates how many of the MR points (converted to monetary value) should be loaded info an account that can be used for purchases (step254). In an exemplary embodiment, theSTN15 can be associated with a MR account, i.e., a primary charge card account that is funded with these MR points. Use of this MR account may be limited by thecard holder1 or thecard provider3, or could be further limited by the MR system rules of use that may have been predefined by participating merchants (step255). Once theMR system95 has approved the request and allocated the requested MR points, theSTN system18 associates aSTN15 and establishes an MR-STN15 profile (256). The MR-STN profile contains the options that will be applied and the amount that will be available to the resultingSTN15. TheSTN system18 returns the STN15 (and other account information) to theMR system95 to provide to thecardholder1 for use in completing subsequent transactions (e.g., online purchases) (step257).
• When desiring to purchase products using the MR point-funded[0109]STN15, thecardholder1 proceeds to a merchant site (e.g., online website), selects goods and is requested by the merchant to provide payment information (e.g., via an online payment web page). Thecardholder1 chooses theappropriate card provider3 as the form of payment (e.g., American Express®, Visa®, etc.) and enters the STN15 (and other needed information) into the appropriate payment fields (step258). The merchant processes theSTN15 authorization as discussed above (step259), where thecard provider CAS7 recognizes the transaction as involving aSTN15, and forwards the request to theSTN system18 containing, inter alia, an application server (FIG. 8, number5) and a STN database (FIG. 8, number6). It should be appreciated that profile information may be stored in a MR database,STN database6 or any other suitable database (step260). TheSTN system18 recognizes the account as a MR account, and verifies that optional conditions, if any, are met. If the conditions are not met, an error is returned toCAS7 and then to the merchant (step261). If the conditions are met, the balance available on the MR-STN profile is reduced by the purchase amount, a record of the purchase is recorded in the MR-STN profile, and an approval code is returned to the authorization system (step262) and then to the merchant (step263). Althoughadditional CAS7 processing is contemplated by this embodiment, application of additional rules and validations—which would typically be applied—are not required for this type of account. The approved purchase is finalized by the merchant with theSTN15 transaction being submitted through the merchant's existing POS network for settlement (step264). TheSTN15 transaction is received by the card provider's financial capture system (FINCAP)10 (step265). TheFINCAP10 forwards the STN transaction to the appropriate AP system9 (step266). TheAP system9 then pays the merchant according to the appropriate settlement terms and conditions (step267). TheFINCAP10, having identified the transaction as involving anSTN15, sends the transaction information to the STN system18 (via a backend application service8) to identify the actual account number (i.e, PCC20) (step268). TheSTN system18 recognizes that theSTN15 is associated with a MR account, searches for the MR-STN profile and passes a credit request to theappropriate cardholder1 MR account to reduce the available MR points (step269), and (ii) the transaction record is used to build a credit against the actual charge card account (e.g., PCC20) that will offset the chargedSTN15 transaction (step269b). In the first instance (step269), theSTN system18 passes a request to theMR system95 to deduct the appropriate number of MR points. In the second instance (step269b), both the original transaction and the credit are passed back to FINCAP10 with the actual charge card account number (e.g.,PCC20 number). TheFINCAP10 then forwards the charge and credit transactions to theappropriate AR system11 for normal billing processing.
• As shown, the embodiment depicted in FIG. 14 allows the[0110]cardholder1 to spend the MR points in at least two ways. First, the membership reward points can be deducted at the time of the transaction processing, or second, the transaction can be reflected on the cardholder's bill along with an associated credit that reflects the payment with reward points. It should also be appreciated that acardholder1 may choose to use MR points on a transaction by transaction basis, and preferably, is able to combine variations of currency (e.g., credit, debit cards etc.) and non-currency tender (MR points), as desired, to effectuate a transaction. Additionally, both currency and non-currency tender may be integrated into a STN gift, where a first party gifts to a second party a secondary transaction number that has some currency or non-currency value.
• Another membership rewards embodiment is shown in FIG. 15. Here, the[0111]cardholder1 is able to choose to use membership reward points when shopping at amerchant2 site that supports the membership rewards as a payment option. Referencing FIG. 15, thecardholder1 goes to a participating merchant's site (e.g., online website) to shop for goods or services. Thecardholder1 selects merchandise and continues to a payment site, where the card provider's MR points is one of the payment options (step301). When the cardholder selects this option, a secure connection is established with thecard provider3 that authenticates both thecardholder1 and the merchant2 (step302). Thecard provider3 requests the cardholder's user ID and Password, either through a pop up screen, a http redirect link, or an applet downloaded by the merchant (step303). Thecardholder1 supplies the User ID and Password which is returned to the card provider with the purchase amount (step304). The card provider user interface4 (e.g., online services) causes thecardholder1 to be authenticated, collects the associated registered card accounts and invokes the MR system95 (step305). TheMR system95 uses these card accounts to identify the cardholder's MR account (step306). If none of the registered accounts are related to a MR account, thecardholder1 is not able to use MR points to pay for her purchase and an error is returned to thecardholder1. After identifying the MR account, the MR points available are converted to the corresponding cash equivalent and compared to the purchase amount being requested. If the purchase amount is greater than the MR cash equivalent, an error is returned to the cardholder1 (step307). If the MR cash equivalent is greater than the purchase amount, all card accounts participating in the MR account are collected and returned to the cardholder1 (step308). Thecardholder1 designates the card account to be used to house all succeeding financial activity, which is then returned to the card provider3 (step309). Thecard provider3 then triggers theSTN system18 to establish aSTN15 that is associated to the selected MR account number and a MR-STN account profile is set-up (step310). TheSTN system18 returns theSTN15 to theUser Interface System4 and then onto the cardholder1 (step311), thecardholder1 cuts and pastes, drags and drops, or auto-fills the STN15 (and needed information) nto the appropriate merchant payment field (step312).
• As previously noted, the merchant uses the existing authorization network to request authorization for the STN transaction (step[0112]313). TheCAS7 recognizes the transaction as one involving aSTN15 and forwards to the STN system18 (step314). TheSTN system18 identifies the associated actual account number (e.g.,PCC20 number) for the STN15 (step315) and also recognizes the account as a MR account. At this point, although all MR transactions would have been previously verified, the MR account balance is again checked to minimize possible fraud (e.g., fraud involving two requests using the same MR points). The cash equivalent for the MR points for the actual account are then retrieved from theMR system95 and if the purchase amount is greater than the available amount, a denial is returned to the authorization system and to the merchant2 (step316). If the cash equivalent value of the MR points exceeds the purchase amount, the STN system records the purchase in the MR-STN profile and returns theSTN15 to the CAS7 (step317). TheCAS7 then completes the authorization for the actual account (e.g., ensuring that the limits for thePCC20 are complied with) (step318), and returns the results (e.g., approval code) to the merchant2 (step319).
• The approved transaction is finalized by the[0113]merchant2 with the STN transaction being submitted through the existing point of sale network for settlement (step320). As before, the transaction information is received by the card provider FINCAP10 (step321) and then forwarded to the appropriate AP system9 (step322) for payment (step323). Since the transaction involves aSTN15,FINCAP10 directs the transaction to theSTN system18 to identify the PCC20 (step324). TheSTN system18 identifies the PCC20 (step325) and also recognizes theSTN15 account is set up using MR points, where theSTN system18 searches the MR-STN profile for the associated purchase record (step326). The STN system either (i) passes a credit request to MR to reduce the MR points (step326a), or (ii) creates a credit against the billing transaction (step326b). Instep326a, theSTN system18 passes a request to theMR system95 to deduct the appropriate number of MR points. Here it is not necessary to return the AR transaction information to FINCAP for forwarding to theAR system11, but a reconciliation entry is created to reconcile the AR forFINCAP10. Instep326b, a transaction record is used to build a credit against a real account number (e.g., PCC20) that will offset the charge transaction. TheSTN system18 forwards this credit to theFINCAP10. The original billing transaction is returned to the FINCAP to appear on the cardholder's1 statement. TheFINCAP10 then forwards the charge transaction to the appropriate AR system for normal processing. TheFINCAP10 forwards the credit issued by theMR system95 to theappropriate AR system11 for normal billing processing. Accordingly, thecardholder1 will see on her statement a credit reflecting the currency value of the MR points used and a charge in the amount of the transaction.
• Another embodiment provides for the generation of one or more STNs that are subordinate to and associated with a main secondary transaction number that, as described above, is associated with the cardholder's[0114]PCC20 account. As noted above, these subordinate numbers may also be digitally stored in devices such as wireless telephones, PDAs, handheld computers, and the like. Providing multiple layers of secondary transaction number provides thecardholder1 with greater flexibility. For example, a cardholder on vacation could structure themain STN15 to be valid for the duration of the vacation. Thecardholder1 is then able to generate subordinate secondary transaction numbers (or tertiary numbers) with varying preferences to take into account various activities that may occur during the vacation. Acardholder1 could structure the main secondary transaction number to have a maximum credit limit of $3,000 (this assumes that the associated primary charge card credit limit is equal to or greater than $3,000) that is good for the duration of the vacation. A subordinate secondary transaction number may then be provided to the spouse with a $1,000 limit and additional secondary transaction numbers, restricted to $500 limits, could be provided to the children. Each subordinate card would be valid only for the duration of the vacation and would only be valid for the maximum dollar amount specified.

Claims (56)

What is claimed is:

1. A method for facilitating a transaction, comprising the steps of:

identifying at least one primary account;

generating a secondary transaction number that is configured to facilitate a transaction;

associating the secondary transaction number with said at least one primary account; and

issuing the secondary transaction number to a first party to facilitate a transaction with a second party, wherein the secondary transaction number is configured to be immediately usable for facilitating the transaction.

2. The method ofclaim 1, wherein the step of identifying said at least one primary account further comprises the steps of receiving information from the first party specifying a particular account; and verifying that the account exists and is valid.

3. The method ofclaim 1, wherein the step of generating a secondary transaction number further comprises the steps of:

generating a random number;

determining if the random number is available for use; and if available for use,

appending appropriate formatting and product identifier numbers to the random number to achieve a secondary transaction number that is configured to have the same format as the primary account number.

4. The method of claims1 or3, wherein the secondary transaction number is generated by a computer system.

5. The method of claims1 or3, wherein a portable data device is configured to generate the secondary transaction number.

6. The method of claims1 or3, wherein a portable data device is configured to support interaction with a card provider's user interface system to generate the secondary transaction number.

7. The method ofclaim 5, wherein a portable data device reader is configured to support interaction with the portable data device.

8. The method ofclaim 1 or3, wherein the secondary transaction number is generated by a first party's computer system configured to support interaction with a card provider's user interface system.

9. The method ofclaim 1, wherein the step of associating the secondary transaction number with the primary account further comprises the step of recording the secondary transaction number in a database associated with the primary account.

10. The method ofclaim 1, wherein the primary account is associated with a physical charge card.

11. The method ofclaim 1, wherein the step of issuing the secondary transaction number to a first party is facilitated by a user interface system.

12. The method ofclaim 11, wherein the user interface system comprises at least one of the following: a web server system, a telephone system, and a mail handling system.

13. The method ofclaim 1, further comprising the steps of registering a first party to use a transaction system configured to generate and issue a secondary transaction number; and upon proper registration, providing the first party with authentication information;

14. The method ofclaim 13, where the authentication information is a username and password.

15. The method ofclaim 1, further comprising the steps of:

prompting the first party for authentication information to confirm that the first party is a registered user; and

receiving authenticating information from the first party, and upon verifying that the first party is registered, providing the first party access to a transaction system.

16. The method ofclaim 15, further comprising the step of receiving a request from the first party for a secondary transaction number.

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

allowing the first party to select and define conditions-of-use parameters, wherein the parameters place limits on how the secondary transaction number may be used; and

associating the conditions-of-use parameters with the secondary transaction number.

18. The method ofclaim 17, further comprising the step of storing the condition of use parameters in one or more account database fields associated with the secondary transaction number.

19. The method ofclaim 17, wherein the conditions of use parameters comprise at least a secondary transaction number credit limit and an expiration date.

20. The method ofclaim 1, comprising the following steps:

receiving transaction information from a second party for authorization;

forwarding the transaction information to a card authorization system for authorization processing;

processing the transaction information with the card authorization system, wherein the card authorization system interfaces with a secondary transaction number system to determine if authorization is appropriate.

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

recognizing that the transaction information comprises a secondary transaction number;

retrieving account information that is associated with the secondary transaction number;

determining if conditions of use associated with the primary account are satisfied;

determining if conditions of use associated with the secondary transaction number are satisfied;

returning an appropriate approval code to the second party, if conditions of use parameters associated with the secondary transaction number and the primary account are satisfied; and,

declining the authorization request if either the conditions associated with the primary account or the secondary transaction number are not satisfied.

22. The method of21, wherein the conditions of use parameters associated with the primary account include at least an expiration date.

23. The method ofclaim 1, comprising the following steps:

receiving transaction settlement information from a second party, wherein the transaction was facilitated using a secondary transaction number;

identifying the transaction settlement information as a transaction involving a secondary transaction number; and verifying that the secondary transaction number is a valid number;

capturing the transaction settlement information in a financial capture system, and causing the second party to be paid.

24. The method ofclaim 23, further comprising the steps of:

identifying the primary account that is associated with the secondary transaction number;

replacing the secondary transaction number with the primary account number;

processing the transaction settlement information in an accounts receivable system; and

generating a billing statement that includes at least the primary account number.

25. The method ofclaim 24, further comprising the steps of comparing the transaction settlement information with conditions of use parameters associated with the secondary transaction number to determine if the conditions of use have been satisfied.

26. The method ofclaim 1, further comprising the step of configuring the secondary transaction number for use with an electronic line of credit system.

27. The method ofclaim 1, further comprising the step of configuring the secondary transaction number for use with a stored value card system.

28. The method ofclaim 1, further comprising the step of configuring the secondary transaction number for use with a non-currency based account program.

29. The method ofclaim 1, further comprising the step of configuring the secondary transaction number to be used as a gift product.

30. The method ofclaim 1, further comprising the step of configuring the secondary transaction number to be used in an online wallet system.

31. A method of processing authorization and settlement requests in a transaction system comprising the steps of:

receiving an authorization request from a second party, where the authorization request involves a secondary transaction number with limited-use conditions associated therewith;

routing the authorization request to a card authorization system to determine if limited use conditions have been satisfied;

returning to the second party a message declining authorization if the conditions have not been satisfied; and

returning to the second party a message approving authorization request if conditions have been satisfied.

32. The method ofclaim 31, further comprising the step of receiving from the second party a settlement request for payment of a transaction involving a secondary transaction number; wherein the second party is paid if the secondary transaction number is valid.

33. A method ofclaim 32 further comprising the steps of:

routing the second party settlement request for payment to a financial capture system,

creating an accounts payable file and routing the accounts payable file to an accounts payable system for payment processing; and

creating an accounts receivable file and routing the accounts receivable file to a service that retrieves the associated primary account number and replaces the secondary transaction number with the primary account number and forwards the resulting accounts receivable file to an accounts receivable system to generate the first party billing statement.

34. A host computer system for facilitating transactions comprising:

a user interface system configured to allow a first party to interact with a host computer's transaction services; and

a number generating and processing mechanism, including at least one application server and at least one database, configured for receiving input from the user interface system to generate a secondary transaction number and to associate therewith a designated primary account.

35. The host computer system inclaim 34, further comprising a card authorization processing mechanism configured to receive transaction information from a second party, wherein the authorization mechanism interfaces with at least the number generating and processing mechanism to determine if the second party authorization request should be approved or denied.

36. The host computer system inclaim 34 or35, further comprising a settlement processing mechanism including at least a financial capture system configured for capturing transaction information relating to use of secondary transaction numbers, an accounts receivable system for billing the first party and an accounts payable system for paying the second party.

37. The system ofclaim 34, wherein the user interface system comprises at least one of the following: web server system, telephone system, and mail handling system.

38. A method for facilitating a transaction comprising the steps of:

registering with a card provider to use a transaction system;

logging-in to the card provider's transaction system by providing authenticating information, and causing card provider to verify that a first party is a registered and authorized user;

designating at least one transaction account as at least one primary account;

requesting a secondary transaction number from the card provider, causing the card provider to generate a secondary transaction number and to associate the secondary transaction number with the previously selected said at least one primary account; and,

receiving the secondary transaction number from the card provider.

39. The method ofclaim 38, further comprising the step of providing the secondary transaction number to a second party to facilitate a transaction.

40. The method ofclaim 38, further comprising the step of selecting conditions of use parameters to be associated with the secondary transaction number.

41. The method ofclaim 38, further comprising the step of defining conditions of use parameters to be associated with the secondary transaction number.

42. The method ofclaim 38, wherein the steps occur online.

43. The method ofclaim 38, wherein said at least one primary account is a non-currency based account.

44. The method ofclaim 38, wherein said at least one primary account is associated with an electronic line of credit system.

45. The method ofclaim 39, further comprising the step of disputing a charge for a transaction involving a secondary transaction number, and causing the card provider to charge back the charge to the second party.

46. A method for facilitating a non-currency based transaction system involving a secondary transaction number comprising the steps of:

designating a non-currency based account as at least one primary account;

generating a secondary transaction number and associating said secondary transaction number with at least one primary account, wherein said at least one primary account includes at least the designated non-currency based account;

converting accumulated non-currency based tender into currency to fund the primary account.

47. The method ofclaim 46 further comprising the step of designating condition of use parameters and associating said parameters to the secondary transaction number.

48. The method ofclaim 47 further comprising the step of processing an authorization request from a second party relating to a transaction involving a secondary transaction number associated with at least a non-currency based account comprising the further steps of:

recognizing the transaction as involving a non-currency based account;

verifying the conditions of use have been satisfied; and if satisfied,

reducing the non-currency based account balance by the transaction amount.

49. The method ofclaim 47 further comprising the step of processing a transaction settlement request from a second party relating to a transaction involving a secondary transaction number associated with at least a non-currency based account further comprising the steps of:

capturing transaction settlement information in a financial capture system, wherein an accounts payable file is created and the second party is paid.

forwarding the transaction settlement information to an accounts receivable system;

recognizing that the transaction settlement information comprises a secondary transaction number that is associated with at least a non-currency based account;

issuing a credit equal to the transaction charge amount from the non-currency based account to the accounts receivable system; wherein the credit from the non-currency based account offsets at least part of the transaction charge.

50. A method for facilitating an electronic line of credit system involving a secondary transaction number comprising the following steps:

issuing a line of credit to a participating first or second party;

causing to be processed an application from the first party requesting to be issued a secondary transaction number;

causing to be issued to the first party a secondary transaction number that is associated with the line of credit; wherein the secondary number is used to facilitate a transaction.

51. The method ofclaim 50 further comprising the steps of:

providing the secondary transaction number to a first party, wherein the secondary transaction number may only be used with a specified second party to facilitate a transaction.

52. A dispute handling method for facilitating a disputed transaction involving a

secondary transaction number, comprising the steps of:

receiving a dispute from a first party relating to a transaction involving a secondary transaction number associated with at least one primary account;

retrieving transaction information from a database;

replacing the primary account number with the secondary transaction number in order to initiate a second party inquiry; wherein the second party inquiry references only the secondary transaction number.

53. The method ofclaim 52, further comprising the steps of:

determining if a valid approval code is associated with the secondary transaction number; and

charging back to the second party the amount of the transaction, if a valid approval code does not exist.

54. A method for facilitating a transaction, comprising the steps of:

receiving a primary account number from a first party to initiate a transaction;

sending the primary account number to a card provider, requesting that the card provider generate and return a secondary transaction number that is associated with the primary account number;

receiving from the card provider the secondary transaction number associated with the primary account, wherein the secondary number is then used to facilitate a transaction settlement.

55. A method ofclaim 54, wherein the step of sending the primary account number to a card provider occurs during a card authorization process.

56. A method ofclaim 54, further comprising the step of purging the primary account number from the second party's records and replacing with the associated secondary transaction number.

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