Patent Application
20140310169
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Currently available payment processing methods have multiple limitations, such as limited fraud and credit loss protection, no ability to eliminate a need for exchanging sensitive banking information between buyers and sellers, and no ability to provide payment guarantees, to name a few.
Currently, the ACH credit transaction is one of the most utilized electronic payment methods. This is a buyer initiated transaction, where the buyer deposits the amount of payment due into the seller's account, using the ACH network. To initiate the ACH credit transaction, sellers must share their bank account details with buyers. This information is then used to transfer the ACH payment from the buyer's account to the seller's account.
The ACH credit transaction method has several key limitations:
Another currently utilized electronic payment method is the ACH debit transaction. The ACH debit transaction is a seller initiated transaction, where the seller debits the buyer's account for the amount of payment due. To enable the ACH debit transaction, buyers must provide payment details to their vendors. The merchant (seller) then uses that information to “pull” the payment from the buyer's account.
The ACH debit transaction method has several key limitations:
The wire transfer is another electronic payment method currently used. The wire transfer is an electronic payment service developed and maintained by the Federal Reserve. It is a real-time gross settlement system that enables participants to initiate funds transfer that are immediate, final, and irrevocable once processed. The wire transfer is generally used for larger payments that are time critical. The wire transfer transaction method has the following key limitations:
The existing electronic payment solutions available for business to business financial transactions have numerous limitations. Thus, not surprisingly, the majority of payments between businesses are currently still done using checks. To achieve broad acceptance of electronic payments for transactions between businesses, improvements from both a buyer's and seller's perspective are desired. An innovative, state of the art electronic payment solution is desired. The solution should be designed to resolve the security and usability limitations, which are restraining the use of electronic payments.
The inventors have developed an innovative electronic payment system that eliminates the current security risks and limitations of currently used electronic payment methods.
This invention relates to electronic commerce. More particularly, this invention describes an innovative electronic payment method for conducting secure electronic payment transactions between buyers and sellers using a definite-use electronic bank account that is used for a specific transaction, specific payment amount only, and without exposure of their main bank account information or other sensitive financial data. Each definite-use electronic bank account is only created for a specific transaction, a specific obligation, and/or a specific payment amount, and it maintains a parent-child relationship with the customer's main bank account. Each definite-use electronic bank account is assigned a random account number, which is retired upon the closure of the payment transaction. Furthermore, a breakthrough electronic payment guarantee method is introduced in conjunction with the definite-use electronic bank account payment method.
This invention relates to electronic commerce. More particularly, this invention describes an innovative electronic payment method for conducting secure electronic payment transactions using definite-use electronic bank accounts.
Each definite-use electronic bank account is created for a specific transaction, definite obligation, and/or specific payment amount only. Each definite-use electronic bank account is assigned a random account number, which is retired upon the closure of the payment transaction. From external usage perspective the definite-use accounts are treated the same way as “normal” bank accounts, and as a result, the seller and/or buyer do not need to implement any new devices. Additionally, the use of definite-use electronic bank accounts does not require that it is implemented by both parties. It can be implemented and used by a seller, or a buyer, or by both seller and buyer.
The definite-use electronic bank account maintains a parent-child relationship with the customer's main bank account. This is a hierarchical relationship, meaning that the definite-use electronic bank accounts are created and funded using the main bank account. Upon the termination of the definite-use electronic bank account, all the remaining monies are deposited back to the main account. Only the account owner(s) or authorized person(s) can initiate the creation of the definite-use electronic bank accounts.
When the definite-use account information is used for the transaction between the buyer and seller, the main bank account information is not shared between the involved parties thus eliminating the risk of the main bank account information being misused, lost, or stolen.
Additionally, a breakthrough electronic payment guarantee feature called “electronic-Lock” (e-Lock hereafter) is introduced in conjunction with the definite-use electronic bank account method. The funds used with the definite-use electronic bank account are “good funds” because the money has to be available for the definite-use electronic bank account to be established. The e-Lock provides the electronic payment guarantee to the seller that the buyer has funds available, allocated, and locked in the definite-use electronic bank account in order to be able to pay for goods and services.
The definite-use electronic bank account method does not require buyers and sellers to exchange their sensitive main bank account information or other sensitive financial data. Furthermore, since the definite-use electronic bank accounts numbers are a transaction specific, they cannot be reused if stolen or mishandled. This inherent security significantly diminishes the likelihood of fraud and makes the system trustworthy, which means that buyers and sellers can confidently transfer payments without fearing that their main “parent” bank accounts could be misused.
The electronic payment utilizing the definite-use electronic bank account method consists of 3 steps:
During the initiation phase, a definite-use electronic bank account is established using a randomly generated account number. Only the account owner(s) or authorized person(s) can initiate the creation of definite-use electronic bank accounts. Each definite-use electronic bank account is established for a definite transaction, definite obligation, and/or definite payment amount only. The definite-use electronic bank account maintains parent-child relationship with the customer's main bank account. This is hierarchical relationship, meaning that the definite-use electronic bank accounts are created and funded using the main bank account. Upon the termination of the definite-use electronic bank account, all the remaining monies are deposited back to the main account. Additionally, any time after the definite-use bank account is established, the electronic-Lock (e-Lock hereafter) can be set up per buyer's request and authorization. The e-Lock feature provides an electronic payment guarantee to the seller that the buyer has sufficient funds available and allocated “locked” in the definite-use electronic bank account to pay for goods and services.
From external usage perspective definite-use accounts are treated the same way as “normal” bank accounts. As a result, sellers and/or buyers do not need to implement any new devices. Additionally, the use of definite-use electronic bank accounts does not require that it is implemented by both parties. It can be implemented and used by sellers, or buyers, or by both sellers and buyers.
During the payment phase, once the payment is authorized by the buyer, the funds are electronically transmitted from the buyer's definite-use electronic bank account to the seller's bank account, which could also be set up as a definite-use electronic bank account or could be just a “regular” bank account. In the case when only the seller is using the definite-use account method, the funds are electronically transmitted from the buyer's regular bank account to the seller's definite-use electronic bank account.
During the closure phase, for the buyer using the definite-use electronic bank account, the buyer's definite-use electronic bank account is closed; the account number is retired; and in case if there are any remaining monetary funds, those are moved back to buyer's main bank account. For the seller using the definite-use electronic bank account, the funds are automatically moved from the seller's definite-use electronic bank to the seller's main bank account, and then the seller's definite-use electronic bank account is closed, and the account number is retired.
Definite-use electronic bank account initiation phase from a buyer's perspective:
Definite-use electronic bank account payment phase from a buyer's perspective:
Definite-use electronic bank account closure phase from a buyer's perspective:
Definite-use electronic bank account closure phase from a seller's perspective:
The present invention is not to be limited in scope by the specific embodiments described herein.
Although the invention is described herein with reference to the preferred embodiment, one skilled in the art will readily appreciate that other applications may be substituted for those set forth herein without departing from the spirit and scope of the present invention. Indeed, various modifications of the present invention, in addition to those described herein, will be apparent to those of skill in the art from the foregoing description and accompanying drawings. Thus, such modifications are intended to fall within the scope of the appended claims. Furthermore, processes described in conjunction with Figures are intended as representative and not limiting, as they may be implemented in additional ways and using different terminology, all within the scope of the present invention.
