l|||||||||||||ll||l||||||||l|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| US 20050021455A1 (19) United States (12) Patent Application Publication (10) Pub. No.: US 2005/0021455 A1 Webster (43) Pub. Date: Jan. 27, 2005 (54) ON-LINE PAYMENTS SYSTEM Publication Classi?cation (76) Inventor: Paul Webster, Hornchurch (GB) (51) Int. Cl.7 ................................................... .. G06F 17/60 (52) US. Cl. .............................................................. .. 705/39 Correspondence Address: Gregory J Lavorgna Esq (57) ABSTRACT Drinker Biddle & Reath LLP One Logan Square Payments for purchases made from Web sites may be effected by pre-registering customers and merchants. Cus 18th & Cherry Streets Philadelphia, PA 19103-7595 (US) tomers and merchants are assigned at least one virtual account and a public and a private account number. Cus 21 A 1. N .1 10 499 099 tomers de P osit funds into a s Y stem collection account and ( ) pp 0 / ’ their virtual accounts are credited by the same amount. (22) PCT Filed. Dec_ 9, 2002 Purchases are made online by requesting a transfer of the purchase price from the customer virtual account to the (86) PCT No; PCT/GB02/05561 merchant virtual account accompanied by the customer’s private account number. The merchant may access funds in (30) Foreign Application Priority Data their virtual account by transferring the real amount from the system collection account to their oWn bank accounts on an Dec. 17, 2001 (GB) ....................................... .. 01301076 instruction accompanied by their private account number. PAYMENT 10 / SYSTEM MERCHANT CUSTOMER \. ' 12 W. .CO INTERNET R HANT‘ CUSTOME BANK \ 16/ 18 I6 Patent Application Publication Jan. 27, 2005 Sheet 1 0f 17 US 2005/0021455 A1 Q4 04 EO \N—— OZEM O U 2 PAYMENT SYSTEM 1Figure / MERCHANT MERCHANT BANK Patent Application Publication Jan. 27, 2005 Sheet 7 0f 17 US 2005/0021455 A1 SoSnag253#503“ we bEawE N2 X: mmwL.wd£32.50 bumm m2 v23E588mmw / Patent Application Publication Jan. 27, 2005 Sheet 9 0f 17 US 2005/0021455 A1 202.2209“ r .23830320SN m.m ososm?ok3880 398:2 Mnmm 230tom 2:? dQsSmMwBwavwan~82E8$228833£3E3338a28588mmsoumncow?=<0.503B8826 Fm 200622omtzn / 3338MMo@EsoO 2555 322% 253mg Patent Application Publication Jan. 27, 2005 Sheet 10 0f 17 US 2005/0021455 A1 2ENE 020Q // .Esooommo889$2t32>mESm59h 852:».£888mug805%hmmS?H8 M85£38.2583.EEEH8.59» www-mwmlig:mno?!not o: N: o: Patent Application Publication Jan. 27, 2005 Sheet 11 0f 17 US 2005/0021455 A1 / m2.mwmgo..| o2 o I QEME cwco?xnom 2: .3m532>2.5%59% n88. E503“58m? 358:“E533689$ 225m“£38k#28Bo» x53.2588 99" o: Patent Application Publication Jan. 27, 2005 Sheet 12 0f 17 US 2005/0021455 A1 03 NE oil w:/ Est?850:.»£33“$33M.25838 '8.25:5?388m $5.5mw:EI 225E ME>MQOUMHEHDOQON08mm Hung:w?iouum3583 Hang:Mo58.56 .mSE mo0532>958m.59» o: 2508“E22? omsmsoxmcmmouom32> 99" w: Patent Application Publication Jan. 27, 2005 Sheet 13 0f 17 US 2005/0021455 A1 962%$255582V8 "58%nosommcmb05“02.808.5.3038M02098 25%82.803“£285cbmnoO 22:5 “$93.5. .EQCQ0632>mag 2:88829$ 258“$28;8 .5528E268829$ .59»%=&H832“.8 x83.2588 uwcgoxmcwm?om32> $82 Patent Application Publication Jan. 27, 2005 Sheet 16 0f 17 US 2005/0021455 A1 548cmmwnmnoxm$98 0600 wt: wmjlanm3odoow_I._.mO>> wQZDOmodoomvzjmmkw 5.83mm 225% tQEoO 35.250 83 2w32>we2:5“So» EBQAm3:83 muss“Hummus;8 .66052588Swim 2:5homma?h8.59» x55#582“ 32>$6.6muwsmsoxm $88 US 2005/0021455 A1 Jan. 27, 2005 ON-LINE PAYMENTS SYSTEM merchant can access these funds using its private account number to transfer funds from the collection account to their [0001] This invention relates to a method and system for bank account. making on-line payments. It is particularly concerned With payments for purchases made on the Internet. [0010] More speci?cally there is provided a method of making payments for on-line purchases, comprising the [0002] Over the past feW years, use of the Internet to steps of: registering at least one merchant subscriber and a purchase goods and services has groWn enormously. Simi plurality of customer subscribers; establishing a virtual larly, there has been a rapid groWth in the concepts and account for each subscriber; assigning a public account delivery of commerce over the Internet. HoWever, the infra reference and a private account reference to each subscriber; structure by Which customers pay for goods and services has crediting funds to the subscriber virtual accounts in accor not kept pace With these developments. Providers of e-com dance With funds deposited by subscribers in a payment merce services (e-tailers) have found that payment processes system collection account; transferring funds from a cus are critical to their operations and that existing payment tomer subscriber virtual account to a merchant subscriber mechanisms are inadequate for supporting e-commerce. account on the instruction of the customer subscriber to [0003] The great majority of on-line payments are made effect payment to the merchant for an on-line purchase made using credit or debit cards. HoWever, credit cards are unsat from the merchant by the customer subscriber; and at the isfactory for tWo main reasons: security and cost. Customers request of the merchant subscriber transferring funds from are reluctant to disclose credit card information on-line for the system collection bank account to a nominated merchant fear of fraud. It has been found that the major reason that subscriber bank account and reducing the balance of the customers abandon on-line purchases is a reluctance to enter merchant subscriber virtual account by the amount of the credit card information. Whilst the actual likelihood of credit funds transferred to the merchant subscriber bank account. card information being misappropriated can be limited by [0011] The invention also provides an on-line payment use of secure connections and encoding, the public percep system comprising: means for registering at least one mer tion is such that many potential customers Will not use credit chant subscriber and a plurality of customer subscribers; cards to shop on-line. means for establishing a virtual account for each subscriber; [0004] The suspicion of credit cards is not limited to means for assigning a public account reference and a private customers. In the event of fraudulent transactions, the liabil account reference to each subscriber; means for crediting ity resides solely With the merchant. This can lead a reluc ?nds to the virtual accounts in accordance With funds tance on the behalf of merchants to offer e-commerce deposited in a collection account by subscribers; means for services to their customers. transferring funds from a customer subscriber virtual account to a merchant subscriber account on the instruction [0005] For small purchases, credit cards are uneconomical of the customer subscriber to effect payment to the merchant to a merchant. Typically, a credit card supplier Will charge a for an on-line purchase made from the merchant by the merchant 2.5% of the purchase cost plus a ?xed fee of 30 customer subscriber; and means for transferring funds at the cents. In addition, the e-tailers may be charged a payment request of the merchant subscriber from the system collec gateWay fee of about 30 cents and a further 20 cents in fraud tion bank account to the nominated merchant subscriber and screening costs. For a $40 purchase cost, the total cost of a for reducing the balance of the merchant subscriber virtual credit card payment adds up to $1.80, some 41/z% of the total account by the amount of the funds transferred to the purchase price. The percentage is even higher for loWer merchant subscriber. price goods and does not enable merchants to maintain acceptable pro?t margins. [0012] Embodiments of the invention have a number of advantages. Firstly, the system is loW cost. The system [0006] A further problem With credit cards is that, apart operator can charge a transaction fee to the merchant or the from the USA and United Kingdom, their use is not Wide customer, as appropriate, but fraud prevention and payment spread as a result of Which many potential customers have gateWay charges are avoided. Second, the system is secure no means of paying for on-line purchases. in that there is no need for the customers to disclose any personal information such as their credit card number When [0007] Other methods of on-line payment are possible making an on-line purchase. Third, on-line purchases may although not Widely used. These include direct cash on delivery payment; payments through billing intermediaries; be made by anyone, regardless of Whether they have any and payment through banks. None is particularly satisfac credit or debit cards or a bank account. Any person may tory. register With the system and make a deposit into the system collection account Which is credited to their virtual account. [0008] There is, therefore, a need for an on-line payment This account is draWn doWn as they make on-line purchases method and system that is loW cost and suf?ciently secure to until such time as the customer deposits more funds into the enable customers to use it Without Worrying about fraud. system collection account. [0009] Broadly, the present invention provides a system in [0013] The system is also suitable for micro-payments Which virtual accounts are created for customers and mer Which are presently uneconomic using credit cards. chants. Customers are provided With public and private [0014] Embodiments of the invention Will noW be account numbers and place funds in a system collection described, by Way of eXample, and With reference to the account Which are credited to their virtual accounts. When accompanying draWings, in Which: an online purchase is made, using the customer private account reference, the funds are transferred from the cus [0015] FIG.