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Persistent dynamic payment serviceRelated Patent Categories: Data Processing: Financial, Business Practice, Management, Or Cost/price Determination, Automated Electrical Financial Or Business Practice Or Management Arrangement, Finance (e.g., Banking, Investment Or Credit), Including Funds Transfer Or Credit TransactionPersistent dynamic payment service description/claimsThe Patent Description & Claims data below is from USPTO Patent Application 20070192245, Persistent dynamic payment service. Brief Patent Description - Full Patent Description - Patent Application Claims
[0001] This application is a continuation of our co-pending application Ser. No. 10/066,174 which application claimed the benefit of provisional application Ser. No. 60/304,819 filed on Jul. 11, 2001, both of which applications are hereby incorporated by reference herein. BACKGROUND OF THE INVENTION [0002] 1. Field of the Invention [0003] The invention pertains to online methods, systems and software for improving the privacy, anonymity, security and control of cardholders over their private financial and personal information in making online payments in a transaction over a network where online e-commerce transactions are carried out, such as the Internet. [0004] 2. Background of the Prior Art [0005] Security, privacy, and anonymity have become major issues in e-commerce transactions. The e-commerce concept depends on the premise that it is possible to access a purchaser's financial accounts for payments in a manner that will provide purchasers with the confidence to participate and make purchases while dealing with a remote merchant in an online transaction. The purchaser making a payment is currently faced with a very rigid system where a credit card number must generally be supplied along with other personal information to make a purchase. Once the information is provided the payer loses control completely, until under ideal circumstances, the payer learns that the transaction has been properly executed. Yet, deficiencies of the system are well known, including the following: [0006] 1. theft of a purchaser's financial information enabling the recipient of the financial information to conduct fraudulent transactions, [0007] 2. lack of dynamic ability to review, reconsider, and even modify aspects of a transaction after the "buy" button is clicked on the merchant's site literally during the payment process, [0008] 3. lack of flexibility in structuring a payment among various accounts of different types (e.g., credit cards, debit cards, checking accounts, and etc.), [0009] 4. lack of privacy--the merchant has access to the payer's name, billing address, credit card number and other personal information which may be correlated against purchases and even sold to third parties, and [0010] 5. merchant records associated with online transactions are a concentrated financial information target for organized attack by criminals and terrorists. [0011] Methods of conducting e-Commerce transactions wherein a buyer (payer) pays for goods or services obtained from a merchant (recipient) with a credit card in an online transaction over a computer network, such as the Internet, are well known in the prior art. While there are variations, the existing process for making such a transaction is that the payer enters a credit card number, billing address and other information needed for authorization of the payment onto a form on the web site to pay for an e-commerce transaction. The credit card number and the other information are transmitted over the Internet from the payer to the web site generally in an encrypted form such as SSL. The merchant site translates the information into a standard inter-bank protocol and forwards the information to a financial institution, usually known as the merchant's Acquiring bank, with which the merchant has an existing relationship generally over secure lines. The Acquiring bank forwards the transaction to the issuer of the credit card, generally known as the issuing bank, over a secure inter-bank payment network based on routing information which is part of the credit card number. The issuing bank either approves or denies the proposed transaction and returns the decision to the merchant through the Acquiring bank. [0012] The prior art SET Secure Electronic Transaction.TM. (trademark and service mark owned by SET Secure Electronic Transaction LLC) protocol has been developed jointly by the Visa and MasterCard card associations as a method to secure credit card transactions over public networks such as the Internet. SET provides message integrity, authentication of all financial data, and encryption of sensitive data. SET is a three party protocol involving a cardholding consumer (buyer), a merchant and a gateway operating on behalf of an acquiring bank. The gateway is an addition to the model described above which intermediates between the merchant and the acquiring bank communicating with the merchant over the public network (Internet) and the acquiring bank over a private network. The scheme is complex, and depends on many participants conforming to a new process specification. [0013] Another class of approaches towards improving the processing of online credit transactions includes issuance of one time or limited time pseudo card numbers by a bank which issues credit cards to its cardholders. These approaches protect the credit card numbers because the pseudo number is used in place of the actual card number. Valid credit card numbers contain routing information which identifies the issuing bank and allows transactions to be routed to the issuing bank for approval. In one-time or limited time approaches a cardholder's issuing bank establishes a method of issuing numbers containing the bank's routing information and a temporary pseudo card number which has been correlated to the cardholder's valid account number. Pseudo card numbers have less potential for misuse because of their limited duration and thus improve security. However, the approach is linked to implementation by a cardholder's issuing bank, so that a cardholder must enter into a different arrangement with the issuer of each account. The approach is also limited to protection of the credit card number but not protection of the privacy of the cardholder himself. The approach similarly does not provide dynamic control during payment processing of the transaction. [0014] Examples of one-time/limited time approaches include Wong, U.S. Pat. No. 5,956,699, which deals primarily with a method of generating an account number and permutation of the number for successive uses. Austin, U.S. Pat. No. 6,029,890 deals with a system for using a single use credit card number. Franklin, U.S. Pat. No. 6,000,832 discloses a form of one time account number where a unique account number is generated for each transaction by the user's computer according to an algorithm involving a base account number, a private key, and user specific data. Similar systems are U.S. Pat. Nos. 5,937,394 and 5,913,203. [0015] Other approaches include Pearson, U.S. Pat. No. 6,023,684, which is a three tier financial transaction system having a local data memory. The system facilitates consumer access to financial institution records to service consumer transactions such as bill paying, retail banking, and credit card account support. Rosen, U.S. Pat. No. 5,745,886 discloses a system for a secure transaction between a customer and a merchant for the open distribution of electronic money between a customer trusted agent and a merchant trusted agent, each with an associated money module. U.S. Pat. No. 5,978,840 discloses a system, method and article of manufacture for a payment gateway system for processing encrypted transactions utilizing a multichannel, flexible architecture. These approaches deal primarily with new systems and methods for secure transactions and do not provide a cardholder with an improved means of payment over existing payment systems. [0016] Another new type of bankcard processing system for online transactions is described by Linehan in U.S. Pat. No. 6,327,578. Lineham discloses a four party protocol intended to improve on the SET protocol by adding a fourth party to the three party SET protocol, an issuer gateway operating on behalf of a cardholder's issuing bank and moving the credit/debit card authorization process from the merchant to the issuing bank. The issuer gateway communicates with the cardholder's computer over the Internet and with the issuing bank over a private network. The communication between the cardholder's computer and the issuer gateway is initiated by message from the merchant that starts a wallet in the cardholder's computer. The initiation message includes a merchant digital signature and a digital certificate from an Acquiring bank as well as a payment amount, an order description, a time stamp and a nonce. Approval of the transaction is made by the issuing bank without real time involvement of the Acquiring bank. When approved an authorization is sent to the merchant either directly or via the cardholder. Upon receipt and verification of the authorization, the merchant completes the transaction with the cardholder. At a later time, the merchant requests the acquirer gateway to capture the transaction and arrange for settlement through the Acquiring bank. Linehan's method achieves improved privacy and security for the cardholder because the cardholder's sensitive information is not passed through the merchant, and because once the four party protocol is in place, various issuers may choose various different methods of authentication without the need to change the acquirer gateway. However, the challenge to adoption of Linehan's invention is that unlike today's situation where virtually any cardholder with browser access to the Internet can complete a transaction with virtually any merchant, Lineham requires that all four parties to a transaction (consumer, merchant, Acquiring bank, and Issuing bank) must have adopted the protocol to complete a transaction. The protocol involves a new method of online bankcard transactions and does not appear to contemplate use with the existing infrastructure. [0017] There is a need for methods and systems for improving the security of financial account payments in online transactions between a payer and a beneficiary which will protect consumers, merchants, and financial institutions from misuses and criminal, and terrorist attacks. [0018] There is a need for improved methods and systems for eliminating misuse of a payer's financial information associated with online payment transactions. [0019] There is a need for improved methods and systems for protecting a payer's privacy in online payment transactions. [0020] There is a need for improved methods and systems for giving payers dynamic control over online payment transactions between the time of submission of the payment information to the beneficiary and approval by the payer's financial institution. [0021] There is a need for accomplishing the above within constraints of the existing account processing methods and systems in use today for processing online payments. SUMMARY OF THE INVENTION [0022] The instant invention comprises systems, software and online methods which offer online users privacy, anonymity, security and control over their private financial data while making electronic payments as part of transaction over networks such as the public Internet or private networks. In particular, embodiments of the invention improve the existing methods and systems for making and authorizing payments during e-commerce transactions and payments between peers. [0023] A preferred embodiment relates to a method of making credit card payments from a payer to a recipient in a web based transaction, typically a buyer using a credit card to make an online purchase from a merchant's Internet web site. While there are variations, the existing core process in making such a transaction is that the payer enters a credit card number, billing address and other information needed for authorization of the payment onto a form on the web site to pay for an e-commerce transaction. The credit card number and the other information are transmitted over the Internet from the payer to the web site generally in an encrypted form such as SSL. The merchant site translates the information into a standard inter-bank protocol and forwards the information to a financial institution, usually known as the merchant's Acquiring bank, with which the merchant has an existing relationship generally over secure lines. The Acquiring bank forwards the transaction to the issuer of the credit card, generally known as the issuing bank, over a secure inter-bank payment network based on routing information which is part of the credit card number. The issuing bank either approves or denies the proposed transaction and returns the decision to the merchant through the Acquiring bank. [0024] The issuing and processing of financial accounts is generally done by banks. However, when the word bank or financial institution is used herein it is meant to include any entity which can perform the requisite act in question, such as issuing and accepting credit cards, debit cards or checking accounts, or processing transactions in whole or in part involving transactions utilizing these accounts. Users, payers, or cardholders refer to the party making a payment and may be individuals or corporations. Any of these terms may refer to the party who actually owns the account or some other party using the account for the actual owner. In the case of online payments these terms could also refer to web connected automated software applications or software operated hardware devices acting on behalf of an individual or corporation. [0025] An improvement according to one preferred embodiment of the invention is to provide a trusted third party service known as a Persistent Dynamic Payment Service (PDPS) which links a network on which online e-commerce transactions are being carried out between payers and merchants, typically a public network such as the Internet, and a private inter-bank payment network. A payer is assigned a proxy account number which is syntactically identical with a standard credit card number, so it is indistinguishable from a real card number to the merchant. The proxy account number includes routing information which causes it to be directed to a Payment Processor which is a financial institution which is part of the inter-bank payment network and serves as the PDPS's gateway to the payment network. The Payment Processor is typically a bank, or an association such as VISA or MasterCard. The PDPS may be fully integrated with the Payment Processor or external with a secure communications link or partially integrated. [0026] The PDPS, in the above preferred embodiment, includes a database which associates the payer's proxy account number with one or more valid account numbers. A valid account number is an account number which corresponds to an actual financial account. The financial accounts may be of any type which can be processed and settled either directly or indirectly by the Payment Processor, typically credit cards, debit cards, and checking accounts. The database also includes other data needed to complete the transaction, typically a proxy and valid cardholder name and billing address for credit cards and a PIN for debit cards. The database preferably also includes user preferences which include advanced preferences for completing transactions. The PDPS includes functionality for making and updating entries in the database. [0027] The PDPS in this preferred embodiment communicates with the payer through a portal which is accessible to the user on the network where the online transaction will be carried out, and provides the payer with agent software for establishing a persistent channel with the portal and for otherwise exchanging information with the portal over the persistent channel. A persistent channel is a two way electronic communication with the PDPS, which is different from the channel used to communicate with the merchant, or in the case of multiple transactions, merchants, and which once opened is available for communication and verification until terminated. In the previously described preferred embodiment, the persistent channel is available over the network where the on-line transaction takes place. However, this is not a general requirement. For instance a persistent channel may be available on a secure VPN, while the merchant-payer interaction takes place on the Internet. The persistent channel may be implemented in data, voice, and video networks. Also, the two directions of communication over the persistent channel also need not be a single physical channel. For example, by a prearranged preference, a payer could initiate a channel from a computer system, with replies set to come to a PDA. A persistent channel remains open until closed. A channel may be closed by an action taken over the persistent channel or by a time out after a predetermined time. Continue reading about Persistent dynamic payment service... Full patent description for Persistent dynamic payment service Brief Patent Description - Full Patent Description - Patent Application Claims Click on the above for other options relating to this Persistent dynamic payment service patent application. ###  How KEYWORD MONITOR works... a FREE service from FreshPatents1. Sign up (takes 30 seconds). 2. Fill in the keywords to be monitored. 3. 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