WO2001025994A1

WO2001025994A1 - A system and method for conducting financial transactions over the internet

Info

Publication number: WO2001025994A1
Application number: PCT/US2000/026756
Authority: WO
Inventors: Anthony Jenkins; Sami Siddiqui
Original assignee: Citibank, N.A.
Priority date: 1999-10-01
Filing date: 2000-09-29
Publication date: 2001-04-12
Also published as: AU7987900A

Abstract

The present invention furnishes a novel system and method for providing a line of credit designed only for making purchases over the Internet, referred to here as a click account. In preferred embodiments of the present system and method, the click account will provide a customer with one or more guarantees of customer satisfaction. Such guarantees could include a price protection guarantee, a product satisfaction guarantee, an extended warranty, or a purchase assurance guarantee. In other perferred embodiments of the system and method of the present invention, the click account provides financial incentives with the use of the card.

Description

A SYSTEM AND METHOD FOR CONDUCTING FINANCIAL TRANSACTIONS OVER THE INTERNET

Continuing Data

This application claims pnonty to United States Provisional Application No 60/157,002 filed on October 1, 1999, which is incorporated herein by reference

BACKGROUND OF THE INVENTION

Field of the Invention

The present invention relates generally to a system and method for conducting financial transactions over the Internet and, more particularly, to a system and method for providing a line of credit designed only for making purchases over the Internet

Description of Related Art

The nature of the shopping and purchasing expenence has been altered dramatically since the advent of the Internet The growing availability of computers and Internet access has induced consumers to use the Internet for a vanety of purposes. This, in turn, has led to the emergence of a plethora of Internet service providers (ISPs), portals, and websites, many of which offer a broad array of products and services previously available only through stores or catalogs. In response to this market, customers are increasingly using the Internet to purchase products.

However, an Internet shopping expenence differs significantly from a customer's typical purchase transaction. There are no stores to visit and no products to handle; there are only virtual images and descnptions of the products In addition, a customer purchasing a product at a website may not have encountered the merchant before; indeed, the merchant may not even have a physical store. Further, reports regarding breaches of confidential information, such as credit card information, are numerous These circumstances have produced a hesitancy in the public regarding making purchases over the Internet Recognizing the public's hesitancy, merchants and financial institutions have explored vanous avenues to reassure customers regarding Internet purchases For example, there are some products presently available for conducting financial transactions over the Internet. JP 41-0063925 A descnbes a system for the settlement of two (2) accounts with an individual member which can be used only on the Internet between a card company and a card member for the purpose of settling accounts.

U.S. Patent No. 5,883,810, issued to Franklin et al., shows a digital online card with account number, which is assigned by an issuing institution Associated with the account number is a transaction number used for Internet purchasing

U.S. Patent No. 6,014,650, issued to Zampese, mentions assigning an account identifier and associated set of secret transaction codes to a purchaser (each transaction code is used only once) for Internet purchasing.

U.S. Patent No. 5,826,241, issued to Stem et al., a cardholder account that resides on the front and back end computer and includes a card number, an Internet e-mail address, a state, a pay-m selection, a pay-out selection, and a currency preference.

U.S. Patent No. 6,049,785, issued to Gifford, shows a radio box with an "Internet Card'^" selecting option used for Internet purchasing.

However, these products are merely conventional credit cards. These cards do little to reassure customers regarding Internet purchases. Accordingly, there remains a need for a method and system for making purchases over the Internet that provides a customer with an enhanced sense of reassurance regarding the transactions.

BRIEF SUMMARY OF THE INVENTION It is a feature and advantage of the present invention to provide a novel system and method for conducting financial transactions over the Internet

It is a further feature and advantage of the present invention to provide a system and method for making purchases over the Internet. It is another feature and advantage of the present invention to provide a system and method for providing a line of credit designed only for making purchases over the Internet

It is a still further feature and advantage of the present invention to provide a system and method for providing a line of credit designed only for making purchases over the Internet which provides the customer with a sense of assurance regarding the transactions

It is still another feature and advantage of the present invention to provide a system and method for providing a line of credit designed only for making purchases over the Internet which provides the customer with a sense of secunty regarding the transactions.

To achieve the stated and other features and advantages, the present invention furnishes a novel system and method for providing a line of credit designed only for making purchases over the Internet, referred to here as a click account. In preferred embodiments of the present system and method, the click account will provide a customer with one or more guarantees of customer satisfaction. Such guarantees could include a pnce protection guarantee, a product satisfaction guarantee, an extended warranty, or a purchase assurance guarantee. In other preferred embodiments of the system and method of the present invention, the click account provides financial incentives with the use of the card.

Additional objects, advantages and novel features of the invention will be set forth in part in the descnption which follows, and in part will become more apparent to those skilled in the art upon examination of the following, or may be learned by practice of the invention.

BRIEF DESCRIPTION OF THE DRAWINGS

Figure 1 is a diagrammatic illustration of an online commerce system.

DETAILED DESCRIPTION OF THE INVENTION Refernng now in detail to embodiments of the invention which provide a novel system and method for a line of credit (click account) designed only for making purchases over the Internet which provides the customer with a sense of assurance regarding the transaction. The click account is a line of credit for Internet commerce The click account is supported by a creditor like a credit card, but it is packaged, delivered and supported like a virtual electronic credit line Upon approval by the creditor, a customer is issued an account number and an expiration date Such information is provided for immediate use A typical embossed plastic credit card is not provided, although the click account, in a preferred embodiment, can be issued under a credit card label to enhance merchant acceptance An ID card (reference card) can take the place of a traditional plastic credit card to provide relevant account information as a reference Thus, the click account is not designed for use in typical stores Figure 1 shows an online commerce system 20 for conducting online commerce transactions For general discussion purposes, three participants to an online commerce transaction are shown a customer 22, a merchant 24, and an issuing bank 26 These three participants play the pnmary roles in the online commerce transaction The customer and merchant may represent individual people, entities, or businesses Although labeled as a "bank", the issuing bank 26 may represent other types of card-issuing institutions, such as credit card companies, card sponsoπng companies, or third party issuers under contract with financial institutions It is further noted that other participants may be involved in some phases of the transaction, such as an intermediary settlement institution, but these participants are not shown Each participant is equipped with a computing system to facilitate online commerce transactions The customer 22 has a computing unit 28 in the form of a personal computer, although other types of computing units may be used including laptops, notebooks, handheld computers, set-top boxes, and the like The merchant 24 has a computing unit 30 implemented in the form of a computer server, although other implementations are possible The bank 26 has a computing center 32 shown as a mainframe computer However, the bank computing center 32 may be implemented in other forms, such as a minicomputer, a PC server, a networked set of computers, and the like

The computing units 28, 30, and 32 are connected with each other via a data communication network 34 The network 34 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 34 at all times Foi instance, the customer computer 28 may employ a modem to occasionally connect to the Internet 34, whereas the bank computing center 32 might maintain a permanent connection to the Internet 34. It is noted that the network 34 may be implemented as other types of networks, such as an interactive television (ITV) network.

The merchant computer 30 and the bank computer 32 are interconnected via a second network, referred to as a "payment network" 36. The payment network 36 represents existing propnetary networks that presently accommodate transactions for credit cards, debit cards, and other types of financial/banking cards. The payment network 36 is closed network that is assumed to be secure from eavesdroppers. Examples of the payment network 36 include the VisaNet.RTM. network and the Venphone.RTM. network

The electronic commerce system 20 is implemented at the customer 22 and issuing bank 26 In the preferred implementation, the electronic commerce system 20 is implemented as computer software modules loaded onto the customer computer 28 and the bank computing center 32. The merchant computer 30 does not require any additional software to participate in the online commerce transaction supported by the online commerce system 20.

There are three distinct phases supported by the online commerce system 20: a registration phase, a transaction phase, and a payment authonzation phase. Dunng the registration phase, the customer 22 requests an online commerce card from the issuing bank 26. The issuing bank 26 creates an online commerce card for the customer and assigns a permanent customer account number to the card. The permanent customer account number is retained in a data record at the issuing bank 26.

The "online commerce card" does not exist in physical form, but in digital form for use in online transactions. The issuing bank 26 issues the card to the customer 22 in the form of a signed digital certificate binding the customer to the bank. The click account is configured to be used by the customer in one or more areas of commerce in which the customer typically employs a credit card, a debit card, a bank card, or other type of financial services card. Dunng the transaction phase, the customer 22 uses the click account number in the transaction with the merchant 24

Dunng the payment authonzation phase, the merchant 24 submits the details regarding the transaction over the conventional payment network 36 to the issuing bank 26 for approval The issuing bank 26 identifies the click account and uses the click account number to retneve the data records regarding the financial account of the customer and processes the authonzation request using its processing system

In one preferred embodiment of the present invention, there is a separate account maintained for each customer, which account is used only for Internet purchases The benefit to the customer is that all Internet purchases are identified and separated onto one account This results in a reduction in nsk to the customer because his or her mam credit card is not at nsk of being compromised through a transaction over the Internet Thus, the present system and method provides the customer with enhanced secunty regarding Internet purchases. Specifically, in a preferred embodiment of the present invention, the creditor provides an on- line guarantee such that if an account is ever compromised, the click account holder will not be held responsible for charges made by persons who are not authonzed users In another preferred embodiment of the present invention, the customer will have the option to reallocate his or her credit line between the main credit card and the click account.

In another preferred embodiment of the present invention, the ID card will have the following information impnnted on its face: (1) account number, (2) expiration date; (3) customer service number; (4) the URL of the issuing bank; (5) "Member since" and date of ongmal membership; and (5) an appropnate logo

In still another preferred embodiment, because the invention si designed only for transactions by means of the Internet, the click account provides a Cash line but no PIN access capability; is not eligible for balance consolidation; and does not provide convenience checks However, the click account does allow for issuance of additional ID cards, is maintained as a separate statement; allows for on-line access of the account; and permits line transfers from an existing account to the click account The click account also offers the customer enhanced convenience regarding his or her Internet transactions Specifically, because the click account is an Internet-dedicated account, the customer will have all his or her Internet transactions in one place, simplifying record keeping and enhancing secunty In a preferred embodiment of the present invention, on-line account management will be available The customer can go on-line to retneve information about his or her account from the creditor Through this on-line account management feature, the customer can check his or her balance, find his or her next billing date and amount due, and pay his or her bills

In other embodiments of the present invention, a customer, after approval, can obtain this click account in one of three methods, contacting the creditor by telephone, contacting the creditor by mail, and contacting the creditor over the Internet In a preferred embodiment, if the customer requests the click account over the Internet, at the time of requesting the card, he or she will input some basic information and, then if approved, receive in the same Internet session within a few moments his or her account number with a corresponding expiration date Upon receiving the account number, the customer can then begin to shop online using the click account Several days later the customer receives a reference card The reference card is not a credit card in the conventional sense, it can't be used in a physical store, has no magnetic stnp, has no embossed numbers, and has no place for a signature Rather the reference card is analogous to a frequent flyer program card that lists the account number and expiration date This information can be provided in a vanety of ways, for instance, the information could be pnnted or etched onto the reference card

In another preferred embodiment of the present invention, the click account can be used to offer a form of transaction satisfaction to the customer Specifically, a purchase transaction conducted over the Internet using the click account of the present invention can provide a customer with one or more of four different guarantees of customer satisfaction

The first guarantee of customer satisfaction is a pnce protection guarantee, in which a customer, if he or she finds the same item from the same manufacturer as the purchased item advertised and available at a lower pnce within a penod of time from the date of the transaction, the customer can request a refund from the creditor As will be appreciated, in preferred embodiments, there may be limits applied to the amount received and to the penod within which a refund can be requested. For example, in one preferred embodiment, the upper limit for a refund can be set at $1000 per item, with an upper limit of $5000 per account per year. In another preferred embodiment, the penod of time for requesting the refund can be set at 60 days.

The second guarantee of customer satisfaction is a product satisfaction guarantee. With the product satisfaction guarantee, the creditor will ensure that, if a customer is dissatisfied with the product purchased by means of the click account, and the party from whom the product was bought will not accept the product back, the creditor will accept the product back from the customer and give the customer a credit for the cost of the product. In a preferred embodiment of the present invention, there will be a time limit for the product satisfaction guarantee. For example, the creditor may allow return of a purchase for a refund if the refund is requested within 90 days of the purchase transaction. In a preferred embodiment, the upper limit for a refund can be set at $1000 per item, with an upper limit of $5000 per account per year.

The third guarantee of customer satisfaction is an extended warranty. The extended warranty is a warranty by the creditor that is longer than the warranty offered by the product manufacturer. In a preferred embodiment of the present invention there would be a limit on the length of the extended warranty offered by the creditor. For example, the creditor could offer an extended warranty of up to one year beyond the time limit of the manufacturer' s warranty on the product.

The fourth guarantee of customer satisfaction is a purchase assurance guarantee. With this guarantee, if a purchase made with the click account is damaged, stolen, or destroyed in a fire withm 90 days from the date of purchase, the creditor will refund the cost of the purchased item. In a preferred embodiment, the upper limit for a refund can be set at $1000 per item, with an upper limit of $5000 per account per year.

In another preferred embodiment of the present system and method of conducting financial transactions over the Internet, the creditor offers financial incentives for the use of the click account. For example, the creditor could offer financial rewards tied to the use of the chck account In a preferred embodiment, use of the click account could result in a corresponding award of frequent flier miles from one or more airlines. In another preferred embodiment of the present invention, the creditor could offer a small cash-back award for use of the click account For example, the creditor could offer 1% or 2% cash-back to the customer on purchases made using the click account

In another preferred embodiment of the present invention, the click account provides three (3) product benefits: secunty, convenience and shopping peace of mind

With regard to secunty, the click account can furnish both an on-line purchase guarantee and a pnvacy promise. With the online purchase guarantee, a click account holder will never lose a penny shopping on the web. The online guarantee ensures that if an account is ever compromised, the account holder will not be held responsible for charges made by unauthonzed users In addition , with the pnvacy promise, information regarding the click account or the click account holder will not divulged to third parties without cause.

With regard to convenience, the click account offers many benefits. The chck account is an Internet dedicated account Thus, an account holder is able to have all his/her Internet transactions in one place, simplifying record keeping and adding to secunty The click account also provides online account management Here, an account holder can save time by going online to get information about his/her account(s). This online account management capability permits the account holder to check their balance, find his/her next billing date and amount due, and pay his/her bills. In addition, if there is ever a billing problem regarding merchandise purchased online, the account issuer can intervene to try to help settle the dispute. Additional benefits regarding convenience are billing dispute resolution, fraud early warning capability, and the ability to authonze additional users.

Concerning shopping peace of mind, the click account also provides significant advantages. These include (1) extended warranty, (2) pnce protection, (3) satisfaction guarantee, and (4) purchase assurance. The extended warranty, in one embodiment, could extend the manufacturer's ongmal U.S. warranty up to one additional year for items purchased with the click account The pnce protection, in an embodiment, could assure an account holder that he/she is getting the best advertised pnce on all Internet purchases. If the same item, from the same manufacturer, is advertised for a lower pnce within 60 days of the purchase, the account holder will be refunded the difference up to $1,000 per item, up to a limit of $5,000 per account per year The satisfaction guarantee, m an embodiment, can provide 100% money back guarantee on every online purchase. If the Internet merchant does not accept a return, the issuer will cover the return up to $1,000 per item, up to a limit of

$5,000 per year. The purchase assurance, in another embodiment, provides that, if a purchase made with a click account is damaged, stolen, or destroyed in a fire within 90 days from the date of purchase, the cost of the purchase will be refunded to the account holder.

It will be appreciated that that the click account can be used in conjunction with another Internet system termed the electronic wallet. The system and method of the electronic wallet allows a customer to prepopulate an order form when he or she is shopping on the Internet with his or her address, telephone number, e-mail address, credit card or line of credit information, shipping address, password, and other information customanly requested on an Internet order form. Vanous preferred embodiments of the invention have been descnbed in fulfillment of the numerous features and advantages of the invention. It should be recognized that these embodiments are merely illustrative of the pnnciples of the invention. Numerous modifications and adaptations thereof will be readily apparent to those skilled in the art without departing from the spint and scope of the present invention.

Claims

WHAT IS CLAIMED IS:

1 A method for facilitating electronic commerce, compnsmg the steps of: issuing an electronic commerce card to a customer dunng a registration phase, and performing a electronic commerce transaction, wherein the electronic commerce card provides capability for credit reallocation capability, online account management, satisfaction guarantees, and financial incentives.

2. The method for facilitating electronic commerce according to claim 1, wherein the electronic commerce card is used only for electronic commerce.

3. An electronic commerce card embodiment on a computer-readable medium that is created as a result of the steps in the method as recited in claim 2.

4 A computer-readable medium having computer-executable instructions for performing the steps in the method as recited in claim 2

5. A computer programmed to perform the steps in the method as recited in claim 2

6. A method for utilizing an online commerce card in conducting online commerce transactions between a customer and a merchant, compnsing the following steps: issuing an electronic commerce card to a customer dunng a registration phase, and performing a electronic commerce transaction, wherein the electronic commerce card provides capability for credit reallocation capability, online account management, satisfaction guarantees, and financial incentives

7. The method for utilizing an online commerce card in conducting online commerce transactions between a customer and a merchant according to claim 6, wherein the electronic commerce card is used only for electronic commerce

8. A computer-implemented method for handling online commerce transaction, compnsing the following steps: issuing an electronic commerce card to a customer dunng a registration phase, and performing a electronic commerce transaction, wherein the electronic commerce card provides capability for credit reallocation capability, online account management, satisfaction guarantees, and financial incentives.

9. The computer-implemented method for handling online commerce transaction according to claim 8, wherein the electronic commerce card is used only for electronic commerce

10. A computer-readable medium having computer-executable instructions for performing the steps in the computer-implemented method as recited in claim 9.

11. A computer programmed to perform the steps in the computer-implemented method as recited in claim 9.

12. A system for facilitating online commerce, compnsing: a customer computing unit resident at a customer site, the customer computing unit being configured with an online commerce card for use in online commerce transactions, the online commerce card being associated with a customer account number, an authonty computing system resident at an authonty site, the authonty computing system having a database to hold the customer account number; the customer computing unit being configured to use the customer account number in an online commerce transaction with a merchant; and the authority computing system being configured to receive from the merchant an authorization request for approval of the transaction, the authority computing system using the customer account number to process the authorization request.

13. The system for facilitating online commerce according to claim 8, wherein the electronic commerce card is used only for electronic commerce.