WO2000075888A1

WO2000075888A1 - An automated payment system for execution and settlement of network purchase transactions

Info

Publication number: WO2000075888A1
Application number: PCT/US2000/015290
Authority: WO
Inventors: David P. Kurrasch; Alan E. Holroyde
Original assignee: Global Payment Advisors
Priority date: 1999-06-03
Filing date: 2000-06-02
Publication date: 2000-12-14
Also published as: EP1101209A1; GB0100516D0; GB2355093A

Abstract

A system for completing purchases between a buyer and at least one seller includes an administration network with a server, seller software, a buyer database including buyer entitlements and authentication, a seller database including seller entitlement and authentication. The administration network matches financial entitlements and authentications of buyers and sellers for purchase transactions. The administration network further includes financial intermediary resources that have a database with a list of approved buyers matched to each buyer's personalized purchasing capacities. A plurality of seller networks are coupled to the administration network. Each seller network includes a server and resources that provide quotes for product sale transactions.

Description

AN AUTOMATED PAYMENT SYSTEM FOR EXECUTION AND SETTLEMENT OF NETWORK PURCHASE TRANSACTIONS.

BACKGROUND OF THE INVENTION Field of the Invention:

The present invention relates generally to electronic payments and settlement of funds, and more particularly to network transactions with guaranteed payments.

Description of the Related Art:

In the past, when buyers purchased goods or services from sellers, buyers endured a long, costly process of reviewing paper catalogues, issuing purchase orders and requisitions, examining invoices, procuring multi- step approvals, and transmitting paperwork and issuing paper or electronic payments by mail, messenger or wire. When payers made payment to payees, the process included cumbersome and costly check writing or funds transfers using the mail, other messenger services or electronic funds transfer systems. With the advent of new and improved computer technologies, inventors have created methods and systems that address many of the problems inherent in the above-described traditional purchasing cycle. However, none of the prior inventions developed or presented offer a new, universal payment system that is safe, secure, quick and inexpensive for all parties to any financial transaction.

Sellers now use electronic catalogues to introduce prospective buyers to their goods and services. Similarly, electronic securities brokers offer their services via internet sites and compete for investor business by offering a variety of advantages, including relative pricing, as well as accuracy and speed of order execution. Consumers of these new electronic utilities benefit from ease of and increased access to Sellers and their products/services. Generally, buyers have greater product selection from which to choose at competitive prices. However, no previous invention has improved upon and lowered the cost of the exchange of money as in this invention. U.S. Patents 5,870,717; 5,825,881; 5,710,887; 5,319,542; 5,758,327; and 5,822,737, discuss the use of Seller supplied sites for electronic viewing of product and/or services on computer networks such as the Internet. One drawback of existing electronic buying systems is that they do not allow for a sophisticated payment function that includes, among other essential items, strong security, payment privacy, purchase consolidation, audit controls, sophisticated credit analysis, approval and limitations, on-line negotiation of payment terms, and a comprehensive flow of accounting data among the buyer, seller and approved third parties, such as the financial intermediaries of the buyer and seller.

Another drawback to the systems reflected in the foregoing patents is the inability of the systems they cover to integrate a conscious electronic business administrator into the buy/sell system. The purpose of the electronic business administrator is to assure buyer authentication, protect buyer privacy, and eliminate the need for buyers to supply personal data such as credit card numbers or checking account information directly to sellers when making purchases. Additionally, the electronic business administrator provides introductions of buyers to sellers and collects, collates and disseminates important relevant buying, selling and accounting data to the respective participants in the process.

U.S. Patent 5,732,400 addresses a financial clearinghouse serving as a middleman for on-line transactions. The clearinghouse accepts requests for goods and services from buyers and determines their ability to pay through buyer profiles. However, the system does not comprehend a sophisticated and comprehensive credit analysis procedure and, notwithstanding its on-line function, contemplates the use of traditional payment mechanisms (envisioning issuance of paper or electronic invoices with payments made by check, electronic funds transfer or ACH debit/credit).

In addition to the shortcomings of US Patent 5,732,400 specified in the immediately preceding paragraph, its primary disadvantage is the presence of the clearinghouse as a middleman. The fact that it is necessary for the clearinghouse to act as an intermediary presenting requests for product types and pricing quotes to sellers is inefficient, introduces an unnecessary layer of cost, time consumption and loss of control for both the buyer and seller. This dilutes the benefits that might otherwise be gained were the sale, credit approval and payment procedure mediated as is contemplated by the present invention.

Another disadvantage is that the financial clearinghouse is not an integral part of the business structure of the system. The financial clearinghouse is adjacent to the buying and selling functions while, in the present invention, the administration function is integrated directly into the buying and selling process.

A further disadvantage is the necessity of invoicing many transactions. The present invention allows for many transactions to be completed in a single buying "trip" and permits the buyer to pay for purchases from many Sellers in a single, consolidated payment with individual Seller and itemized product information delivered to the buyer for accounting, audit and control purposes. A further disadvantage is the need for a complicated and costly credit scoring system for the buyer. The present invention allows for on-line terms of sale to be created between buyer and seller and allows the seller to accept and/or adjust terms during the selling sequence. Additionally, the invention allows for instantaneous on-line debits to buyers' checking accounts thereby eliminating payment risk without the need of a middleman that scores each transaction.

Figure 1 illustrates an electronic catalogue system in which the Buyer views an electronic catalogue using a computer or telecommunications device attached to a network, makes purchases from one or more Sellers, pays the Seller by debit or credit to a payment processor not directly linked to the system and accepts instructions to ship/deliver the product or service. A Seller maintains the catalogue for the purpose of updating and correcting any information. This electronic catalogue system fails to provide an intermediary for payment. There is a need for improved methods and systems for electronic payments and settlement of funds. There is a further need for improved methods and systems for electronic payments and settlement of funds on network transactions. There is yet a further need for an improved method and system for enrolling and authenticating participants on network transactions. There is a need for improved reconcilement and reporting methods and systems for network transactions. There is a further need for methods and systems for network transactions with guaranteed payments.

SUMMARY Accordingly, an object of the present invention is to provide a method and system for electronic payments and settlement of funds.

Another object of the present invention is to provide a method and system for electronic payments and settlement of funds on network transactions. Yet another object of the present invention is to provide a method and system for enrolling and authenticating participants on network transactions. Still another object of the present invention is to provide a method and system for reconcilement and reporting of network transactions.

A further object of the present invention is to provide a method and system for network transactions with guaranteed payments.

An object of the present invention is to provide a method and system for network transactions that ties authentication to a buyer's power to buy.

Another object of the present invention is to provide a method and system for network transactions with a set of entitlements with authentication which is reported and reconciled sequentially by the buyer and the seller.

Yet another object of the present invention is to provide a method and system for network transaction that creates a dynamic relationship between a financial institution and a buyer for a selected cyle where the financial institution guarantees payment on behalf of the buyer to the benefit of the Seller based on established purchasing limits.

A further object of the present invention vent is to provide a method and system for network transactions that enables a buyer to make multiple purchases from multiple sellers during one buying session with a single check-out.

These and other objects of the present invention are achieved in a system for completing purchases between a buyer and at least one seller. The system includes an administration network with a server, seller software, a buyer database including buyer entitlements and authentication, a seller database including seller entitlement and authentication. The administration network matches financial entitlements and authentications of buyers and sellers for purchase transactions. The administration network further includes financial intermediary resources that have a database with a list of approved buyers matched to each buyer's personalized purchasing capacities. A plurality of seller networks are coupled to the administration network. Each seller network includes a server and resources that provide quotes for product sale transactions. In another embodiment, the present invention is a system for completing purchases between a buyer, at least one seller and a financial guarantor associated with the buyer. An administration network includes a server, seller software, a buyer database with buyer entitlements and authentication and a seller database with seller entitlement and authentication. The administration network matches financial entitlements and authentications of buyers and sellers for purchase transactions. A plurality of seller networks are coupled to the administration network. Each seller network includes a server and resources that provide quotes for product sale transactions. Financial guarantor resources are associated with the financial guarantor and are coupled to the administration network. The financial guarantor resources include a database with a list of approved buyers matched to each buyer's personalized financial resources.

In another embodiment, the present invention is a method of providing purchase transaction services among at least one seller and at least one buyer with an administration network coupled to a seller network. The buyer is enrolled with the administration network. The buyer provides buyer entitlements to the administration network and the administration network authenticates the buyer to utilize the administration network. The seller is also enrolled with the administration network. The seller provides seller entitlements and the administration network authenticates the seller to utilize the administration network. The buyer electronically selects at least one product at the seller network. The buyer selects a check out function at the seller network to complete a requested product purchase. The check out is electronically coupled to the administration network. The requested product purchase is compared to the buyer's entitlements and authentication at the administration network. An approval or denial decision of the requested product purchase is made at the administration network. The approval or denial decision is transmitted from the administration network to the seller network. A guarantee of payment is provided to the seller for the purchase transaction that is backed by a financial guarantor coupled to the administration network.

In another embodiment, the present invention is a method of providing purchase transaction services among at least one seller and at least one buyer. An administration network is coupled to a seller network. The buyer and seller are each enrolled with the administration network. The buyer provides buyer entitlements and the seller provides seller entitlements. The administration network then authenticates the buyer and seller to utilize the administration network. The buyer electronically selects at least one product at the seller network. The buyer then selects a check out function at the seller network to complete a requested product purchase. The check out is electronically coupled to the administration network. The requested product purchase is compared to the buyer's entitlements and authentication at the administration network. The administration network transmits a probability of the buyer making payment of the requested product purchase to the seller network. The seller approves or denies the requested product purchase based on the probability.

BRIEF DESCRIPTION OF THE DRAWINGS Figure 1 is a flow chart of a known electronic catalogue system. Figure 2 illustrates the major components of one embodiment of an automated buying and payment system of the present invention.

Figure 3 is a flow chart illustating one embodiment of an enrollment process utilized with the system of Figure 2. Figure 4 is a flow chart of another embodiment of an enrollment process useful with the system of Figure 2.

Figure 5 is a flow chart illustrating one embodiment of a buyer enrollment process without an authenticating financial guarantor that is used with the system of Figure 2.

Figure 6 is a flow chart illustrating one embodiment of a buyer enrollment process with direct access to the electronic administrator of Figure 2.

Figure 7 is a flow chart of a login redirection procedure that is used with the Figure 2 system. Figure 8 is a flow chart illustrating a buyer authentication process with the electronic administrator through an authenticating financial guarantor used with the Figure 2 system.

Figure 9 is a flow chart illustrating one embodiment of a buying process of the Figure 2 system. Figure 10 is a flow chart illustrating one embodiment of a buyer's purchasing transaction with the Figure 2 system.

Figure 11 is a flow chart illustrating one embodiment of a purchase transaction with a shipping address at a seller network site using the Figure 2 system. Figure 12 is a flow chart illustrating one embodiment of a purchase transaction without a shipping address at a seller network site using the Figure 2 system.

Figure 13 is a flow chart illustrating one embodiment of a purchase transaction where the buyer desires to establish multi-levels of approval to execute sales using the Figure 2 system.

Figure 14 is a flow chart illustrating one embodiment of a multilevel buyer approval process with the system of Figure 2.

Figure 15 is a flow chart illustrating one embodiment of a buyer reporting process with the system of Figure 2. Figure 16 is a flow chart illustrating one embodiment of a seller reporting process with the system of Figure 2.

Figure 17 is a flow chart illustrating one embodiment of a market data process with the system of Figure 2. Figure 18 is a flow chart illustrating one embodiment of a payment approval and settlement process with the system of Figure 2.

Figure 19 is a flow chart illustrating one embodiment of a settlement process with the system of Figure 2. Figure 20 is a flow chart illustrating one embodiment of a risk management process with the system of Figure 2.

Figure 21 is a flow chart illustrating one embodiment of a loyalty program process with the system of Figure 2.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

The present invention is an automated buying and payment system (the "APBS"). The APBS is a multi-party system that operates with any electronic interface between a Buyer and a Seller using a computer or telecommunications device attached to a network (collectively the "Network"). In one embodiment, the Network is the Internet.

Figure 2 illustrates the major components of the APBS. Entities utilizing the APBS include Buyers, Sellers and FG's. The APBS provides core infrastructure including enrollment, network site services, FG communications for entitlement and authentication, transaction processing, Seller protocols, Buyer-service, reporting, reconciliation, audit, network monitoring and security. The APBS includes an electronic administrator ("EA") that enrolls the FG's and Sellers, maintains the profiles of the FG's, Sellers and Buyers, captures the "entitlements" of the Buyers and Sellers, enforces the entitlements of the Buyers and Sellers, performs authentication services, approves or denies transactions, reports on transactions, provides audit services, and introduces Buyers and Sellers. For purposes of this specification, "entitlements" include Buyer's payment preferences, shipping instructions, preferences and individual Buyer limits by Seller, Seller category, product, product category, transaction, daily, weekly, monthly or other period dollar limits. Buyers, which include buying companies with their authorized Buyers, and individual consumers (collectively "Buyers") can enroll with the APBS and shop at participating wholesalers, retailers, auctions, exchanges, stores, malls (collectively "Sellers"). The APBS can be used to initiate money transfers for financial transactions, including but not limited to the buying and selling of securities and/or other assets, the execution of foreign exchange transactions, business to business, business to consumer, consumer to business and consumer to consumer payments and payment of recurring and non-recurring invoices. The APBS enables a financial intermediary that transfers value between Buyers and Sellers, to issue credentials to Buyers which provide Buyer identity certification to a Seller. Examples of financial intermediaries include but are not limited to banks, optioners, financial or non-financial intermediaries, insurance companies, business service providers, assurance companies, dealers and brokers, on-line trading facilities, electronic bill presentment firms, credit card companies, freight forwarders, governments, and the like (hereafter collectively financial guarantor "FG"). Following Buyer identity certification the FG also establishes periodic financial limits to guarantee purchases initiated by Buyers. The periodic financial limits are dynamic. The FG determines how often it wants to change the financial limits.

The APBS permits a Seller to select different pricing and money settlement plans for transactions based on its interpretation of the risk of each transaction and pay different amounts to have the payment executed with or without a guarantee. Additionally, with the APBS a Seller can choose different pricing for transactions by selecting different settlement timelines.

When a FG logs onto the APBS the first time, the APBS uses a temporary password and user name matched with a specific URL address. The FG logs on to the APBS URL, re-enters the original temporary password and user name, and completes its enrollment at the APBS. At the FG's choice, The Buyers may use, for example, a hardware token or software certificate for the APBS authentication. The FG determines the type and process of key exchange for software certificates and selects whether to issue their own certificates or not. An FG registration authority address is collected during enrollment if the FG issues its own certificates. Examples of Buyer certificates include smart cards, browser based certificates, biometrics, hardware tokens, and the like.

When an user is enrolled on the APBS, the APBS creates a unique, one-time password. This password is forwarded to the user and contains the URL to be used for logon. Passwords are initially issued by the APBS. Passwords expire based on the FG's requirements by entity. Examples of expiration dates include thirty, sixty and ninety days.

FG's are responsible for issuing certificates to their own FG users and to their Buyers. The FG runs a registration authority to issue, monitor and revoke certificates. The FG registration authority is integrated with the APBS enrollment process. AT the beginning of enrollment and APBS redirects a user to the FG registration authority to initiate a certificate request. The FG designs its registration authority enrollment process so that APBS required data is requested and captured. New users log onto the FG registration authority to get certificates and complete enrollment. At the FG's option, the APBS can provide the registration authority function. The FG does not have to integrate its registration authority with the APBS when the APBS is the registration authority. Buyers invoke the APBS by visiting a participating Seller's purchase site, choosing the APBS check-out option or accessing the APBS through an FG's on-line procurement services. The FG's electronic procurement service directs Buyers to an underlying portal service, which is managed and operated by the APBS. Sellers become participating APBS Sellers when they complete enrollment and successfully install APBS Seller software on their network engines. The Seller is enrolled and authenticated by the EA. The Seller software is an electronic connection between the Seller Network engine and the EA. The seller software is responsible for all communications and data transfer between the Seller Network engine and the EA. The Seller software communicates with the APBS Gateway, which authenticates the Buyer, enforces the Buyer's entitlements and returns an approval or denial code to the Seller. In one embodiment of the APBS, the Seller can either use the shipping address that the Buyer has provided the Seller or get the duly authorized shipping address from the EA. In either case, the APBS checks against a list of authorized shipping addresses. The Seller software, accepts calls from Seller's Network engine, executes required business logic and sends requests to APBS. Buyers can use the APBS once they have successfully enrolled their administrators and authorized buyers. Buyers can buy after completing their enrollment at the APBS. Buyers visit participating Seller network sites, shop and checkout. At checkout, Buyers click on the APBS icon button, which launches the Buyer and Seller authentication process, assembles cash register and equivalent receipt data (hereafter "Level III data") and the Seller's invoice. The APBS either approves or denies the transaction. The APBS records the history of every transaction for audit and reconciliation.

When a user is enrolled on the APBS, the APBS creates a usemame for that person. The usemame, and logon instructions, are forwarded to the user by person, the U.S. Post, by e-mail or other well known notification methods. After the initial logon, the user may change the usemame to another name provided that the new name is unique within the APBS. If the name is not unique the user is prompted to select another name. The APBS manages usemames and passwords. The EA is responsible for maintaining the individuality and uniqueness of the username/password combination and is also responsible for controlling access to the usemames and passwords to protect their confidentiality.

The EA is responsible for maintaining a tight co-ordination between a Buyer's and Sellers certification, entitlements and purchasing power. In coordination with the FG, who defines the Buyer payment limits, and the entitlements that have been established during enrollment, and have been amended from time to time, the EA enforces at the time of each transaction an individual Buyer's ability to execute an individual purchase at any participating Seller's network site.

One embodiment of an authentication process with an authenticating FG is illustrated in Figure 3, in this embodiment, the EA agrees with the FG that the EA will process all Network transactions between Buyers and Sellers as electronic debits to Buyer accounts at the FG and credits to Sellers as long as all conditions of the sale are met. When the Buyer checks out at the Seller's Network site, the EA, in coordination with the FG, approves or denies the transaction. If the transaction is approved, the FG provides a financial guarantee to the Seller which is communicated through the EA. In this embodiment where there is a guarantee by FG, the EA serves as an electronic switch between Buyer and Seller.

In another embodiment, the Buyer is not authenticated by the FG but is authenticated by the EA. In this embodiment, the EA acts as the Buyer's payment facilitator. In this embodiment, the EA advises the Seller of the statistical likelihood of the success of the transaction. For example, if the Buyer has a history of successful transactions then the likelihood of success for the next transaction is high and a favorable score is delivered to the Seller by the EA. The Seller uses this score in its decision to complete or not complete the transaction. Even when the scoring occurs the EA continues to enforce individual Buyer entitlements. In this embodiment, the EA directly debits the Buyer's account at a named FG and the Seller is credited in the same manner. Alternatively, as shown in Figure 4, after collecting the Buyer's entitlements, the EA delivers authentication and non-repudiation cryptography to the Buyer and the Buyer's administrators directly.

Figure 5 illustrates one embodiment of the issuance of credentials to the Buyer by EA and FG. The APBS creates credentials by issuing traditional cryptography that may include, but not limited to, a user name, password, digital certificate, digital signature, smart card, or other well known electronic identification method and device. These credentials are then distributed to the Buyer and are sent by e-mail, direct transmission, U.S. Post, courier and the like. The Buyer maintains the confidentiality of its credentials at all times. EA or FG both issue certificates and credentials. If the Buyer is not enrolled with the APBS, the Buyer can become enrolled by selecting the APBS checkout at a participating Seller which launches an automatic enrollment process. Upon checkout, EA determines electronically that the Buyer is not enrolled with the APBS and will then automatically launch a series of screens that the Buyer may complete to enroll during a single transaction. The Buyer may elect to be authenticated by EA or FG. A Buyer with no affiliation to an FG may enroll directly with the

EA or indirectly through a participating Seller. By enrolling directly with the EA, or indirectly through a participating Seller, the Buyer enrolls on-line with the EA and provides information that includes, but is not limited to, personal financial data, Buyer control procedures and Buyer's entitlements. The Seller electronically refers the Buyer to the EA for enrollment. The EA accepts or rejects Buyer's enrollment. Upon acceptance, the EA delivers personalized credentials and cryptography to the Buyer. Figure 6 shows how the Buyer is authenticated before, during or at the conclusion of a buying session. Each day the FG electronically delivers Buyer authentication cryptography, passwords and identification codes to the EA. When the Buyer wishes to commence a buying session the Buyer links to the EA and delivers the required cryptographic instructions plus password and identification codes. The EA then delivers a message back to the Buyer confirming or denying the authentication.

Referring now to Figure 7, when the Buyer chooses the APBS checkout option, a request to open a session with the APBS is sent to the Seller software which in turn forwards the request to the EA. The EA sends back a URL string to the Seller. Once the Buyer is authenticated, the browser window automatically closes.

Alternatively, as shown in Figure 8, the Buyer may commence a buying session by linking to the FG. The Buyer delivers the required cryptographic instmctions plus password and identification codes to the EA which at this time is embedded electronically with the FG. The FG delivers a message to the Buyer confirming or denying the authentication. If the authentication is positive the FG electronically routes the Buyer to the EA to initiate a buying session.

One embodiment of a buying process using the APBS is illustrated in Figure 9. In this embodiment, the Buyer enters the APBS from one of three different sources, the FG, the Seller or the EA. The EA displays a wide range of Seller categories and specific Sellers in the Seller categories. The Buyer chooses one or more specific Seller categories and the preferred Seller. The Buyer is then linked to the Seller's electronic catalog and selects all of the product and service offerings from the various Sellers. The Buyer is able to shop from multiple Sellers with a single check-out. Individual product purchases are accumulated by product, Seller, price and are sub-totaled by product, Seller and price and displayed to the Buyer. Referring now to Figures 10 and 2, the Buyer enrolled in the APBS visits a participating Seller Network site, browses and fills its shopping cart. At checkout, the Buyer selects the APBS icon which can be customized by the Seller. Sellers who have integrated the Seller software into their

Network site will, when the Buyer checks out, pass a cash register receipt with Level III detail to the EA. The EA returns an approval or denial of the transaction back to both the Seller software and the Buyer. Seller's who delay shipment to Buyers can receive an authorization from the EA during the check- out process and then settle the currency when the product or service is delivered. For transaction that are delayed the EA and the Seller software combined allow multiple partial shipments to settle against the authorized currency value as long as the aggregated partial settlements are less than or equal to the original authorized value. One embodiment of a Seller network site is illustrated in Figure

11 which illustrates the example of a purchase transaction with a shipping address. The Seller displays a shopping cart page. The shopping cart page will have most but not all of the Level III data. The Level III data not included in this page is sales tax and shipping and handling charges associated with the purchase. The Buyer may choose to purchase by clicking the APBS checkout button that transfers the Buyer to a secure session with the EA. The Seller either retrieves the Buyer's shipping address, preferences and billing data directly from the Buyer via an interactive session or from the Buyer's profile at the Seller site. During the APBS checkout session, the Seller has the option to retrieve the Buyer's authorized shipping address from the APBS. The Seller accomplishes this by calling the Seller software.

Another embodiment of a Seller Network site is without a shipping address is illustrated in Figure 12. In this embodiment, the Seller integrates the Seller software in the same place in its Network engine. The Buyer opens the session with a Seller's Network engine, browses catalogs, fills the shopping cart and clicks to view cart. At this stage the cart contains only partial Level III data for the invoice. Shipping, handling and tax items are not computed. The Buyer then clicks on the APBS checkout. The Seller software collects shipping address and handling data from the Buyer, computes shipping, handling and tax items and displays the final Level III invoice to the Buyer for approval. The Buyer views this page and selects APBS as the payment option. Seller's Network engine calls the Seller software and passes the Level III invoice to the EA for approval.

The result is a pop-up login screen session between the Buyer's browser and the APBS. The Buyer enters the Buyer name and password for authentication approval from the APBS. If the Buyer has multiple checking accounts with the APBS the Buyer is prompted with a drop down list and picks one.

The EA checks the authenticated Buyer's entitlements and returns an approval or denial code with the FG's approval or denial messages and transaction ID. The Seller stores the transaction ID for future reference. The Seller software displays the approval message from the FG. Figure 13 illustrates another embodiment of a Seller network site where the purchase transaction flow is with a shipping address and the Seller's Network engine communicates with the EA to retrieve the Buyer's entitled shipping address prior to authorization. On the display cart page is an APBS checkout button. Clicking the APBS checkout button causes the Seller software to execute all the Buyer authentication steps. Retrieving the shipping address component prompts the Buyer to select from a set of controlled shipping addresses if the Buyer is entitled to more than one address.

Figure 14 illustrates one embodiment of the present invention where the Buyer desires to establish multi-levels of approval to execute sales. In this embodiment, an authorized Buyer #1 of a company Buyer enters the EA, makes purchase elections at one of more Sellers and electronically submits one or more purchases for execution to the EA. When the purchases exceeds the control criteria for Buyer #1 for the Seller, Seller category, product, product category, purchase amount or accumulated purchase amount for the buying trip, the day, the week, the month or any other defined period of time, the EA electronically communicates the purchase to the company Buyer's authorized approver Buyers #1, 2, .... "n". The authorized Buyer approver replies either positively or negatively to the EA and the sale is either completed or denied. One embodiment of a Buyer reporting process is illustrated in Figure 15. In this embodiment, a sale has been completed and the Buyer wants to obtain necessary accounting information in order to maintain its books of record and correctly manage inventory and materials. The EA delivers key purchase accounting information to the Buyer. The Buyer then updates its accounting systems manually or electronically. In those instances when a purchase procedure is violated such as, but not limited to, purchase attempts at excluded Sellers or purchase totals that exceed the Buyer's dollar limits, the EA delivers notice of the violations to a Buyer's audit function. The APBS rolls up the Level III data on behalf of the Buyer and sends the information to the Buyer. The Buyer can then automatically post the information to its general ledger. Purchase data is made available to the Buyer by US mail, courier, e-mail, network page or direct transmission. FG's, Sellers, and Buyers can research transactions and retrieve reports from the APBS by navigating to specific URL's provided by the APBS. FG's provide the primary Buyer service to Buyers. The APBS provides Buyer service to the FG's and Sellers.

In one embodiment of the present invention, the APBS provides accounting and general ledger information. In this embodiment, after a purchase transaction is approved the APBS sends an email to a designated accounting personnel to allow them to enter GL codes. After the purchase transaction is approved, the Buyer's accounting personnel can assign GL codes to each item on the purchase. In another embodiment, the APBS can create a transaction file which businesses can use to automatically map general ledgers. The APBS also provides reports that list actions for any desired time period including but not limited to the last 24 hours and monthly summaries of activities.

The APBS provides searching and sorting capabilities of individual transactions. Search results present multiple fields of the record. Applicable fields, such as the Buyer's name, may be hyper-linked to the Buyer's profile.

There can be many multiple entries for a transaction. In one embodiment of a transaction, the Seller's account is credited for the invoice amount, the Buyer's account is debited, the Seller's account is debited for a percentage of the invoice amount after accounting for the discount rate paid to the FG for its guarantee service and the APBS account is credited for the discount rate. In another embodiment, a reverse transaction debits the Seller account for the invoice amount, credits the Buyer account for the invoice amount, credits the Seller account for a percentage of the invoice amount at the discount rate and debits the APBS account for a percentage of the invoice amount.

A debit adjustment transaction credits the Seller account for the adjustment amount, debits the Buyer account for the adjustment amount, debits the Seller account for a percentage of the adjustment amount at the discount rate and credits the APBS account for a percentage of the adjustment amount.

A credit or credit adjustment transaction debits the Seller account for the adjustment amount, credits the Buyer account for the adjustment amount, credits the Seller account for a percentage of the adjustment amount at the discount rate and debits the APBS account for a percentage of the adjustment amount.

A buying company can log into the EA to adjust all or part of an invoice such as, lump sum, freight and shipping charges, tax amounts waived for resale, shipping address/zip code, and the like. The Seller selects the invoice to be adjusted and can search in single or combined fields using exact match or "sounds like". Examples of matches include, any data field on the invoice, date or dollar range and inventory part number/SKU/part description.

If an approval response is issued, and the Seller desires to cancel the transaction, then an email memo can be sent to the Buyer requesting them to contact the company at a pre-defined telephone number. Once a confirmation is received from the Buyer, the Seller logins to create a reverse transaction.

Alternatively, the Seller may decide to create a credit or adjustment the invoice.

The APBS also establishes audit trails. The APBS records every purchase transaction, including those that failed, were successful, denied and pending transactions, record the number of logins, records enrollment transactions, records certificate authentication transactions. All attempted and completed transactions can be time-stamped and archived in separate database tables for dispute resolution, risk monitoring and audit.

The Seller reporting process is described in Figure 16. The EA delivers key sales accounting information to the Seller by facsimile, electronic mail, paper document, network page, dial-up site or direct transmission. The Seller then updates its accounting systems manually or electronically.

The APBS also provides a reporting system. An objective of reporting is to confirm, reconcile, purchaser behavior, dispute resolution, research, account for, audit, market data, group and Buyer service, and the like. The APBS provides both accounting reporting and product reporting. Buyers and sellers can receive hourly, weekly, monthly, and the like reports of everything purchased and sold and can then reconcile the reports to actual events.

APBS reports are available as permanent records as standard database inquiries and ad-hoc inquires. For purposes of this specification, ad hoc inquires and reports are without any pre-coding to the APBS. Permanent records include date for, invoices and FG statements of the APBS activity, total data collected in the Level III and the like. Records can be permanently stored in the APBS data base and are available in hardcopy. Additionally, permanent records are pushed from the APBS and delivered to the users. Standard database inquiries are stored electronically and can be printed if required. Standard database inquiries can be pulled by users. Ad-hoc inquiries can be pulled by users and viewed online. Any output can be downloaded to a file.

Accounts can be reconciled by all major entities including the APBS, the FG's, buying companies and Sellers. Accounts are Accessible for accounting purposes to review consolidated, departmental and individual balances. Interactive online statements are provided with fields

The APBS is also a research tool for, Buyers, Sellers, by buying companies and also to address trouble tickets. The system provides easy to use links to the database that allow the user to search for individual transactions sorted by dollar amount, date, Seller, Buyer, buying company. Customer service agents are able to research a specific transaction and send a URL to a Buyer. The Buyer can enter the URL on its browser, login and see the entry in question. This is possible because the specific commands (SQL) are coded into the URL.

With the APBS every transaction is viewable online with an easy search engine that allows sounds-like and actual matches on purchase amount, invoice amount, Seller name, Buyer DDA. Adjustments and original transactions are kept in tact so that searches can be done either way.

Upon request an FG can receive a list of transaction detail to facilitate charging by transaction, or invoice processed. Each day, a settlement file is created that tells the FG how much money is guaranteed by its Buyers and using hyperlinking, that information can be drilled down to its lowest possible levels.

The APBS of the present invention also can provide a tool to establish a customer loyalty program, as illustrated in Figure 17. In this embodiment, the EA maintains valuable sales data including, but not limited to, the Buyer, the Seller, products purchased, number of products purchased, prices paid for purchases, and frequency of purchases. The EA obtains digital purchase certificates from a Sponsoring Seller and delivers the digital purchase certificates to one or more targeted Buyers. The Buyers elect to redeem the digital purchase certificate by electronically delivering the digital purchase certificate to the EA which then routes the Buyer to the Sponsor Seller to execute a purchase using the digital purchase certificate.

Figure 18 illustrates one embodiment of a payment and settlement process using the APBS. In this embodiment, the Buyer's FG periodically delivers an electronic file to the EA reporting the Buyer's open to buy ("OTB") which is the sum of a number of key financial categories under the control of the FG. This can include but is not limited to, the opening balance in the Buyer's checking, savings or other cash accounts, any invested balances, any subsequent deposits or withdrawals and any available lines of credit. The Buyer enters the EA and proceeds to execute a purchase at Seller. The Seller seeks approval of the payment and settlement of funds from the EA and, when approval is received, completes the sale. The EA delivers an electronic debit message to the FG to adjust the open to buy on-line. The EA sends an electronic funds transfer credit to the Seller's FG. Each FG updates the OTB file at the beginning of each business day. Thereafter files are updated by batch, real-time or polling methods depending on the FG's choice.

The APBS allows an approved FG user to update an OTB amount for a purchasing company or the Buyer at the APBS etwork site. An update to this field overrides the OTB file amount. The update stays in place until the next OTB file update, another OTB online update, or a default OTB is applied.

Referring now to Figure 19, settlement provides instructions to the FG to credit and debit accounts of all parties involved in all purchase transactions in a day. Each purchase requires one debit from the FG's Buyer's source of funds, one credit to the APBS account and one credit to the Seller's account.

A normal purchase transaction credits the Seller account for the invoice amount and debits the Buyer account for the invoice amount. A reverse transaction debits the Seller account for the invoice amount, credits the Buyer account for the invoice amount. A credit or credit adjustment transaction debits the Seller account for the adjustment amount and credits the Buyer account for the adjustment amount One embodiment of a risk management process of the PBS is illustrated in Figure 20. In this embodiment, Buyer's FG delivers an electronic file SQ to the EA. The EA reports the authenticated Buyer's open to buy which is the sum of a number of key financial categories under the control of the FG that includes, but is not limited to, the opening balance in the Buyer's checking, savings or other cash accounts, any invested balances, any subsequent deposits or withdrawals and any available lines of credit. An authenticated Buyer or a non-authenticated Buyer enters the EA. The Buying Process begins through the EA to a chosen Seller. The EA sends alternative payment terms, including but not limited to, risk rating, purchase price, purchase price discount, ship date and date of payment to the Seller. The Seller selects one of the alternative payment terms sent to it in the EA. The EA delivers an electronic debit message to the FG to adjust the open to buy for the authenticated Buyer. For the non- authenticated Buyer the EA sends an electronic funds transfer debit to the non- authenticated Buyer's named FG.

Figure 21 illustrates one embodiment of a loyalty program process of the APBS. In this embodiment, the Buyer makes purchases through the EA and participating Sellers. The Seller delivers Buyer's specific loyalty currency for each purchase executed which can then be used by the Buyer to reduce the cost of subsequent purchases at the Seller. The EA maintains an electronic record of each Buyer's loyalty points and, when the Buyer shops at a participating Seller , applies the available loyalty points to reduce the price of the purchase.

The foregoing description of a preferred embodiment of the invention has been presented for purposes of illustration and description. It is not intended to be exhaustive or to limit the invention to the precise forms disclosed. Obviously, many modifications and variations will be apparent to practitioners skilled in this art. It is intended that the scope of the invention be defined by the following claims and their equivalents. What is claimed is:

Claims

1. A system for completing purchases between a buyer and at least one seller, comprising: an administration network including a server, seller software, a buyer database including buyer entitlements and authentication, a seller database including seller entitlement and authentication, the administration network matching financial entitlements and authentications of buyers and sellers for purchase transactions, the administration network further including financial intermediary resources that include a database with a list of approved buyers matched to each buyer's personalized purchasing capacities; and a plurality of seller networks coupled to the administration network, each seller network including a server and resources that provide quotes for product sale transactions.

2. The system of claim 1, wherein the administration network manages buyer and seller entitlements and authentications and provides financial scoring to sellers for buyer transactions.

3. The system of claim 1, wherein the seller entitlements include a list of sellers approved to sell with the administration network.

4. The system of claim 1, wherein the buyer entitlements includes fund sources available to a buyer.

5. The system of claim 4, wherein the buyer entitlements includes of maximum purchase limits for a buyer.

6. The system of claim 5, wherein the buyer entitlements a list of approved sellers that can sell on the administration network.

7. The system of claim 6, wherein the buyer entitlements includes buyer delivery addresses.

8. The system of claim 1 , wherein the administration network approves and denies purchase transactions.

9. The system of claim 1 , wherein the administration network reports purchase transactions to the buyer and seller.

10. The system of claim 1 , wherein the administration network debits and credits purchase transactions for the buyer and seller.

11. The system of claim 1 , wherein the administration network reconciles purchase transactions for the buyer and seller.

12. The system of claim 1 , wherein the administration network provides auditing reporting and control of purchase transactions for the buyer and seller.

13. The system of claim 1 , wherein the administration network introduces buyers and sellers prior to the initiation of a purchase transaction.

14. The system of claim 1, wherein the administration network provides a score of the buyer's credit standing to the seller prior to completion of a purchase transaction.

15. The system of claim 1, wherein the seller software transmits a transaction approval request to the administration network, the administration network matches the transaction approval request against the buyer authentication and entitlement and generates an approval or denial decision for the transaction approval request that is transmitted back to the seller software.

16. The system of claim 1, wherein after completion of the product sale transaction, transaction information is stored in a database at the system administrator that is reportable to the buyer.

17. The system of claim 1, wherein after completion of the product sale transaction, the administrator initiates electronic payment instructions to debit the buyer and credit the seller.

18. The system of claim 1 , wherein administration network takes all transactions in a selected time period and compares the transaction for the selected time period to debit and credit instmctions processed by the buyer and seller.

19. The system of claim 1 , wherein every product sale transaction is logged into an administration network database, and the buyer or seller accesses their transaction information from the database for audit and reporting purposes.

20. The system of claim 1, wherein as the administration network collects the history of the buyer's transactions the administration network determines a credit scoring of the buyer based on its history.

21. A system for completing purchases between a buyer, at least one seller and a financial guarantor associated with the buyer, comprising: an administration network including a server, seller software, a buyer database including buyer entitlements and authentication, a seller database including seller entitlement and authentication, the administration network matching financial entitlements and authentications of buyers and sellers for purchase transactions; a plurality of seller networks coupled to the administration network, each seller network including a server and resources that provide quotes for product sale transactions; and financial guarantor resources associated with the financial guarantor and coupled to the administration network, the financial guarantor resources including a database with a list of approved buyers matched to each buyer's personalized financial resources.

22. The system of claim 21, wherein the administration network manages buyer and seller entitlements and authentications and provides financial guaranties to sellers for buyer transactions.

23. The system of claim 21, wherein the seller entitlements include a list of sellers approved to sell with the administration network.

24. The system of claim 21 , wherein the buyer entitlements includes fund sources available to a buyer.

25. The system of claim 24, wherein the buyer entitlements includes of maximum purchase limits for a buyer.

26. The system of claim 25, wherein the buyer entitlements a list of approved sellers that can sell on the administration network.

27. The system of claim 26, wherein the buyer entitlements includes buyer delivery addresses.

28. The system of claim 21 , wherein the administration network approves and denies purchase transactions.

29. The system of claim 21 , wherein the administration network reports purchase transactions to the buyer and seller.

30. The system of claim 21 , wherein the administration network debits and credits purchase transactions for the buyer and seller.

31. The system of claim 21 , wherein the administration network reconciles purchase transactions for the buyer and seller.

32. The system of claim 21 , wherein the administration network provides auditing reporting and control of purchase transactions for the buyer and seller.

33. The system of claim 21 , wherein the administration network introduces buyers and sellers prior to the initiation of a purchase transaction.

34. The system of claim 21 , wherein the administration network provides a score of the buyer's credit standing to the seller prior to completion of a purchase transaction.

35. The system of claim 28, wherein the administration network provides a financial guaranty from the financial guarantor to the seller on behalf of the buyer for a purchase transaction.

36. The system of claim 21, wherein the seller software transmits a transaction approval request to the administration network, the administration network matches the transaction approval request against the buyer authentication and entitlement and generates an approval or denial decision for the transaction approval request that is transmitted back to the seller software.

37. The system of claim 21 , wherein after completion of the product sale transaction, transaction information is stored in a database at the system administrator that is reportable to the buyer.

38. The system of claim 21, wherein after completion of the product sale transaction, the administrator initiates electronic payment instructions to debit the buyer and credit the seller.

39. The system of claim 21 , wherein administration network takes all transactions in a selected time period and compares the transaction for the selected time period to debit and credit instmctions processed by the buyer and seller.

40. The system of claim 21 , wherein every product sale transaction is logged into an administration network database, and the buyer or seller accesses their transaction information from the database for audit and reporting purposes.

41. The system of claim 21 , as the administration network collects the history of the buyer's transactions the administration network determines a credit scoring of the buyer based on its history.

42. A method of providing purchase transaction services among at least one seller and at least one buyer with an administration network coupled to a seller network, comprising: enrolling the buyer with the administration network, the buyer providing buyer entitlements to the administration network and the administration network authenticating the buyer to utilize the administration network; enrolling the seller with the administration network, the seller providing seller entitlements and the administration network authenticating the seller to utilize the administration network; electronically selecting by the buyer at least one product at the seller network; the buyer selecting a check out function at the seller network to complete a requested product purchase, the check out being electronically coupled to the administration network; comparing the requested product purchase to the buyer's entitlements and authentication at the administration network; generating an approval or denial decision of the requested product purchase at the administration network; transmitting the approval or denial decision from the administration network to the seller network; and providing a guarantee of payment to the seller for the purchase transaction that is backed by a financial guarantor coupled to the administration network.

43. The method of claim 42, wherein the administration network creates a debit to the buyer and a credit to the seller.

44. The method of claim 42, wherein the administration network reports the purchase transaction to the buyer and the seller.

45. The method of claim 42, wherein the administration network reconciles the purchase transaction for the buyer and the seller.

46. The method of claim 42, wherein the administration network maintains an audit record of the purchase transaction for the buyer and the seller.

47. A method of providing purchase transaction services among at least one seller and at least one buyer with an administration network coupled to a seller network, comprising: enrolling the buyer with the administration network, the buyer providing buyer entitlements to the administration network and the administration network authenticating the buyer to utilize the administration network; enrolling the seller with the administration network, the seller providing seller entitlements and the administration network authenticating the seller to utilize the administration network; electronically selecting by the buyer at least one product at the seller network; the buyer selecting a check out function at the seller network to complete a requested product purchase, the check out being electronically coupled to the administration network; comparing the requested product purchase to the buyer's entitlements and authentication at the administration network; and transmitting from the administration network a probability of the buyer making payment of the requested product purchase to the seller network, wherein the seller approves or denies the requested product purchase based on the probability.

48. The method of claim 47, wherein the administration network creates a debit to the buyer and a credit to the seller.

49. The method of claim 47, wherein the administration network reports the purchase transaction to the buyer and the seller.

50. The method of claim 47, wherein the administration network reconciles the purchase transaction for the buyer and the seller.

51. The method of claim 47, wherein the administration network maintains an audit record of the purchase transaction for the buyer and the seller.

52. A method of providing purchase transaction services among at least one seller and at least one buyer with an administration network coupled to a seller network, comprising: enrolling the buyer with the administration network, the buyer providing buyer entitlements to the administration network and the administration network authenticating the buyer to utilize the administration network; enrolling the seller with the administration network, the seller providing seller entitlements and the administration network authenticating the seller to utilize the administration network; electronically selecting by the buyer from multiple seller networks multiple products; the buyer selecting a check out function at a single check-out point to complete a requested product purchases, the check out being electronically coupled to the administration network; comparing the requested product purchases to the buyer's entitlements and authentication at the administration network; generating an approval or denial decision of the requested product purchases at the administration network; transmitting the approval or denial decision from the administration network to each seller network; and providing a guarantee of payment to each seller for each purchase transaction that is backed by a financial guarantor coupled to the administration network.

53. The method of claim 52, wherein the administration network creates a debit to the buyer and a credit to each seller for each purchase transaction.

54. The method of claim 52, wherein the administration network reports each purchase transaction to the buyer and each seller.

55. The method of claim 52, wherein the administration network reconciles each purchase transaction for the buyer and each seller.

56. The method of claim 52, wherein the administration network maintains an audit record of each purchase transaction for the buyer and each seller.

57. A method of providing purchase transaction services among at least one seller and at least one buyer with an administration network coupled to a seller network, comprising: enrolling the buyer with the administration network, the buyer providing buyer entitlements to the administration network and the administration network authenticating the buyer to utilize the administration network; enrolling the seller with the administration network, the seller providing seller entitlements and the administration network authenticating the seller to utilize the administration network; electronically selecting by the buyer from multiple seller networks multiple products; the buyer selecting a check out function at a single check-out point to complete a requested product purchases, the check out being electronically coupled to the administration network; comparing the requested product purchases to the buyer's entitlements and authentication at the administration network; and transmitting from the administration network a probability of the buyer making payment of each requested product purchase to each seller network, wherein each seller approves or denies the requested product purchase based on the probability.

58. The method of claim 57, wherein the administration network creates a debit to the buyer and a credit to each seller for each purchase transaction.

59. The method of claim 57, wherein the administration network reports each purchase transaction to the buyer and each seller.

60. The method of claim 57, wherein the administration network reconciles each purchase transaction for the buyer and each seller.

61. The method of claim 57, wherein the administration network maintains an audit record of each purchase transaction for the buyer and each seller.