INTERNET BILLING METHOD

Abstract: An Internet billing method comprises establishing an agreement between an Internet access provider (2) and a customer (4), and an agreement between the provider (2) and a vendor (5), wherein the provider (2) agrees with the customer (4) and the vendor (5) to bill the customer (4) and remit to the vendor (5) for products and services purchased over the Internet (1) by the customer (4) to the vendor (5). When the customer (4) orders a product or service over the Internet (1) from a vendor (5), transactional information is also transmitted to the provider (2). The provider (2) then bills the transaction amount to the customer (4) billing account and remits a portion to the vendor (5), keeping the differential as a fee for the service. As a result, there is no need for any customer (4) account numbers to be transmitted, maintaining the security of that information.

Description: INTERNET BILLING METHOD BACKGROUND OP THE INVENTION The present invention relates to a method of billing for commercial transactions over the Internet. The Internet is a vast worldwide interconnection of computers and computer networks. The Internet does not consist of any specific hardware or group of connected computers, rather it consists of those elements that happen to be interconnected at any particular time. The Internet has certain protocols or rules regarding signal transmission and anyone with the proper hardware and software can be part of this interconnection. At present, the technical and financial requirements for connecting directly to the Internet are beyond the resources of most individuals and thus new businesses known as Internet access providers have proliferated. These providers invest in the equipment needed to provide access to the Internet for subscribers who pay the providers a fee for the access. Providers include companies whose only business is to offer connection to the Internet as well known on-line services such as CompuServe, American On-Line, and Prodigy. In addition, telephone companies and cable television companies have announced plans to provide Internet access. A party desiring to connect to the Internet by means of a provider typically connects via a modem over a telephone or cable television network to the provider's equipment which then connects the party, through the provider's equipment, to the Internet. Although the origin of the Internet was for military use, today the primary users of the Internet are civilian. There is great activity at present attempting to utilize the Internet as a channel of commerce. Many vendors advertise their products and services over the Internet and solicit orders from Internet users for these wares. While the preferred mode of payment is by credit card, there is great reluctance to transmit credit card account information over the Internet because of lack of security. Moreover, in situations wherein the transaction amount is small--from pennies to a few dollars--it is not economically feasible to use a credit card transaction. There is a need to be able to ensure that commercial transactions over the Internet are at least as secure as conventional transactions over the telephone, through the mails, and with on-line services where credit cards and/or billing accounts are used for purchases. Similarly, there is a need to be able to handle on the Internet a large number of small-sized transactions, similar to what is done by telephone companies for conventional telephone service. The lack of security and the lack of a means to bill for small transactions are the biggest obstacles to commercial use of the Internet. SUMMARY OF THE INVENTION The main object of the present invention is to create a new business opportunity for telephone companies, cable television companies, and existing Internet access providers, by creating a way for them to offer to their subscribers a method of securely buying and selling goods and services of any value over the Internet. Another object of the present invention is an Internet billing method which is cost effective for transactions having transaction amounts ranging from pennies to a few dollars. Still another object of the present invention is to provide a secure method of billing commercial transactions over the Internet. A further object of the present invention is an Internet billing method which is simple to use from both the customer's point of view and that of vendors on the Internet. Yet another object of the present invention is a billing method which can be used by a large number of Internet users without requiring major changes in how the users customarily behave and conduct commercial transactions. These and other objects and advantages of the present invention are achieved by an Internet billing method in accordance with the present invention. A provider establishes an agreement with a customer, and a second agreement with a vendor, wherein the provider agrees with the customer and the vendor to bill for products and services purchased over the Internet by the customer from the vendor. Associated with the customer agreement are one or more billing accounts to which purchases may be charged. Associated with the vendor agreement are one or more methods of remitting funds to the vendor. The provider creates access to the Internet for the customer through the provider's equipment. When the customer orders a product or service over the Internet from the vendor, the provider obtains transactional information transmitted between the customer and the vendor including a transaction amount relating to the ordered product or service and the provider then bills the transaction amount to a customer billing account and remits a portion of the transaction amount to the vendor. Which accounts are used may be specified in the agreements made between the provider and the customer and between the provider and the vendor, or may be specified in the transactional information. If specified in the transactional information, the selection of account can be made by referencing the type of account (e.g., "VISA", "phone bill"), or the position of that account on a predetermined list (e.g., "the 3rd account"), and does not require that any actual account numbers be transmitted. By the use of this method, there is no need for the customer to transmit to the vendor any information containing any of the customer's billing account numbers thereby maintaining the security of that information. The present invention, in a preferred embodiment, is a method of providing merchants with the ability to offer their customers secure transactions for the purchase of goods and services of any value over the Internet, without the need for the customer to transmit any credit card or other account numbers over the Internet, without the need for the customer to sign up with any additional provider of services, and without the need to change the manner in which most customers currently use the Internet. In accordance with the present invention, a customer desiring to purchase goods and services over the Internet has prearranged access to the Internet through the services of an Internet access provider. Such providers can be companies whose only business is to offer connection to the Internet, companies which offer on-line computer services, one of which is connection to the Internet, cable television companies, or telephone companies. In arranging for access with such a provider, the customer has agreed with the provider on a method of payment which is by billing, or charge to a credit card, or charge to an account of the user which could be an account specific to the Internet or could be a more general account, such as an on-line computer services account, a cable television account, or a telephone account. Once the prearrangements have been completed, using the provider's service to connect to the Internet typically involves calling a telephone number of the provider and being automatically connected through the provider's equipment to the Internet. Once connected to the Internet, the customer can browse around until an item is located that the customer wishes to purchase, at which time the customer will follow the instructions created by the vendor and ultimately agree to purchase something by taking an appropriate action. In the course of making the purchase, the means of delivery of the goods or service will be established. Depending on the type of goods, delivery can be made by mail (e.g., in the case of a purchase of a book), by courier service (e.g., in the case of a purchase of flowers) , or by electronic transmission over the Internet (e.g., in the case of delivery of an electronic newsletter or piece of software) . The remaining element of the purchase transaction is the manner in which the customer pays the vendor . In accordance with the present invention, the provider has made arrangements with the vendors who wish to sell goods and services over the Internet to the customers of the provider. The provider agrees to do the billing associated with such sales for the vendors, and as part of the agreement, the provider and the vendor have agreed on the manner in which the provider will remit funds to the vendor. Examples of payment include payment by check, credit to the vendor's credit card merchant account, or credit to another account of the vendor's, such as the vendor's cable television or telephone account. The account of the vendor to be credited need not be with the provider. The arrangements that are made will depend on the vendor's desires and the capabilities of the provider. For example, if the vendor anticipates many small transactions and the provider is a telephone company, they can agree that the provider will credit the vendor's existing telephone account for amounts under some nominal amount and credit the vendor's credit card merchant account for larger amounts. If the vendor anticipates large transactions, then they may agree that the provider will pay by check. In a typical transaction in accordance with the present invention, from the customer's point of view all use of the Internet appears to be conventional. Depending upon the prearrangements made between the provider and the customer and between the provider and the vendor, the customer can charge a purchase to a credit card, to a cable television account, or to a telephone account. The account of the customer to be billed need not be with the provider. For example, the customer may be using one telephone company as an access provider and a second telephone company as a telephone service provider and the account to be billed is that with the second telephone company. The customer specifies which account is to be billed by an indication to the provider, but neither the customer nor the vendor has to transmit any account numbers over the Internet, because it is the provider, not the vendor who submits the charge to the credit card company, the cable television company or the telephone company, and the provider already has been given, during the course of making prearrangements with the customer and the vendor, the appropriate account numbers of both the customer and the vendor. The provider sends this information to the appropriate party by the same secure means customarily used for similar transactions not made over the Internet. From the vendor's point of view, the transaction is as secure as a transaction made over the telephone with a credit card. If the vendor wishes, the vendor may verify with the provider that the address supplied by the customer for shipment of the goods has been authorized by the customer in the same manner in which such verification would be made for the same transaction made over the telephone with a credit card. In addition, because such a verification does not require the transmission of any account numbers of the customer, the verification can be done over the Internet as part of the transaction transmission itself if the provider and the vendor have prearranged to do so. From the provider's point of view, the provider is made aware that the customer has authorized the charge by monitoring the data being sent over the Internet through the provider's equipment between the customer and the vendor. This can be done, for example, by specifying a specific code which, when sent by the customer to the vendor, indicates to the provider that a transaction has been completed. When the customer has made a purchase, the provider charges the transaction amount to the agreed account of the customer and credits the agreed portion of that amount to the agreed account of the vendor, keeping the differential as the provider's charge for making the service available. These and other features and advantages of the present invention will become apparent from the following detailed description of the invention with reference to the attached drawings, wherein: BRIEF DESCRIPTION OF THE DRAWINGS Fig. 1 is a block diagram of a system for carrying out the billing method according to the present invention; Fig. 2 is a flow chart of the method according to the present invention. DETAILED DESCRIPTION OF THE INVENTION Referring to Fig. 1, a system for carrying out the method of the present invention is shown. In that system, the Internet is shown schematically as a network 1 to which providers 2,6, vendors 5.1-5.n, 6.1-6.n and 8.1-8.n and customers 4.1-4.n and 10.1-10.n (where n is an integer to indicate a range from one to many) are connected in different ways. The provider 2 is connected to an access network 3 and the Internet 1 and provides access to the Internet 1 for customers 4.1-4.n and vendors 6.1-6.2 connected to access network 3. The access network 3 can be a telephone network, a cable television network, an on-line services network such as CompuServe, American On- Line, or Prodigy, or a private Internet access network. Similarly, provider 9 is connected to access network 7 and the Internet 1 and provides access to the Internet 1 for customers 10.1-lO.n and vendors 8.1-8.n. Vendors 5.1-5.n access the Internet directly by their own equipment. In accordance with the method shown in the flow chart of Fig. 2, in step 11 the provider 2 establishes agreements with the vendors 5.1-5.n, who are connected directly to the Internet, with vendors 6.1-6.n who access the Internet via provider 2 and with the vendors 8.1-8.n, who are connected to the Internet 1 via the access network 7 and an access provider 9, to bill customers 4.1-4.n for goods and services purchased by them over the Internet from vendors 5.1-5.n, 6.1-6.n and 8.1-8.n. The provider 2 also agrees to remit a portion of the collected money back to the vendors. The provider 2 also establishes an agreement with each of the customers 4.1- 4.n. These agreements provide that the provider will bill the customer for goods and services purchased by them over the Internet. The billing will be done to billing accounts established in connection with the agreements. The billing accounts can be for credit card accounts, telephone accounts, cable television accounts, or on-line services account. The accounts need not be with the provider if the provider has a billing agreement in place with the party with whom the account was established. As part of the services of the provider to the customers 4.1-4.n, the customer is connected to the Internet 1 in step 12 at a desired time, typically by making contact via modem. Once connected to the Internet, the customer can interface with any one of the vendors 5.1-5.n, 6.1-6.n and 8.1-8.n in order to find out about products or services offered by those vendors. When one of customers 4.1-4.n makes the decision to order a product or service from one of vendors 5.1-5.n, 6.1-6.n or 8.1-8.n, in step 13 an exchange of transaction information occurs between the customer and the vendor. This exchange may include identifying information relating to the customer, such as the customer's Internet address, information relating to the products or services to be purchased including the transactional amount, the manner and time of delivery, and a reference number to identify the order. The vendor can also produce a verification code signifying that a transaction has been completed which can be picked up by the provider 2. In step 14, the transaction information is obtained by the provider 2. The communication can be a separate transmission by the vendor or the customer to the provider 2, or the provider 2 can extract the information from the exchange of information taking place between the customer and the vendor through the provider's equipment. The provider 2 can then send verifying information to one or both of the customer and vendor to indicate that the transaction has been approved, if approval of an outside party, such as credit card company, is required. Most importantly, the entire transaction takes place without the need of communicating the customer's credit card or account number over the Internet 1 . The product or service is delivered to the customer in step 15 and the appropriate customer account is billed by the provider 2 in step 16. The provider then remits the agreed payment in the appropriate manner to the vendor in step 17, keeping the differential as a service charge for the services rendered by the provider 2. As can be seen from Fig. 1, the method according to the present invention can be carried out in many ways. For example, a vendor 5.1 can establish a remitting agreement with provider 2 and provider 9 to remit to vendor 5.1 a portion of a transaction amount billed to the billing account of any one of customers 4.1-4.n and 10.1-10.n. Similarly, vendors 6.1-6.n can establish a remitting agreement with provider 9 for transactions carried out over the Internet between vendors 6.1-6.n and customers 10.1-10.n. In accordance with another feature of the present invention, prior to the billing of the transaction amount to the account of the customer and after obtaining the transactional information, the provider can obtain approval to bill the transaction amount to the billing account. This is particularly true in the case where the billing account is a credit card account. In that instance, approval must be obtained from a third party, i.e., the bank issuing the credit card. Where the account is with the provider, approval would be obtained from the provider itself. In a preferred embodiment of the present invention, the approval can be obtained over the Internet and most preferably during the communication between the customer and the vendor. In accordance with a further feature of the present invention, the customer can specify a particular billing account, for example, a credit card account, a telephone number account, a cable television account or an on-line services account at the time that the billing agreement is established with the provider. Thereafter, whenever the transaction amount is to be billed, it will be billed to that specified billing account. Alternatively, the customer can specify a plurality of billing accounts, for example, an AMEX account, a VISA account, a Mastercard account at the time that the billing agreement is established. When the transaction information is communicated, it will include an identification of which of those plurality of billing accounts the customer wants billed, however, without specifying the account number of the account. Thus the customer can merely indicate the account by the "brand" name AMEX, VISA or Mastercard or the customer can identify it as the first account, second account or third account. As noted above, the billing account is not necessarily with the provider, that is, it can be with a third party such as a bank issuing a credit card. Alternatively, the provider can be a first telephone company, but the billing account can be with a second telephone company and charged by the first telephone company to the telephone number account of the customer with the second telephone company. In accordance with the invention, the remitting can be by means of sending money, crediting a vendor account such as a credit card merchant account, a telephone number account, a cable television account or an on-line services account. In a preferred embodiment of the present invention, the step of establishing the remitting account comprises specifying a particular vendor account to which the portion of the transaction amount will be remitted. In an alternative embodiment of the present invention, the step of establishing the remitting agreement comprises the vendor specifying a plurality of vendor accounts to which a portion of the transaction account can be remitted. Thus when the transactional information is communicated, the vendor can identify which one of the plurality of vendor accounts the amount is to be remitted to, however, without specifying the specific account number. The vendor account can be an account with the provider or an account with a third party such as a credit card merchant account with a bank. It is understood that the embodiments described hereinabove are merely illustrative and are not intended to limit the scope of the invention. It is realized that various changes, alterations, rearrangements and modifications can be made by those skilled in the art without substantially departing from the spirit and scope of the present invention.

Claims: What is claimed is: 1. An Internet billing method comprising the steps by an Internet access provider of: establishing a billing agreement with at least one customer and a remitting agreement with at least one vendor to bill a billing account of the at least one customer for products and services purchased over the Internet by the at least one customer from the at least one vendor and to remit to the at least one vendor; connecting the at least one customer to the Internet; obtaining transactional information over the Internet from communications over the Internet between the at least one customer and the at least one vendor related to a purchase made over the Internet by the at least one customer from the at least one vendor, wherein the transactional information includes a transaction amount; billing the transaction amount to the billing account of the at least one customer; and remitting a portion of the transaction amount to the at least one vendor. 2. The method according to claim 1, further comprising after the step of obtaining the transactional information and before the step of billing the transaction amount: obtaining approval to bill the transaction amount to the billing account of the least one customer. 3. The method according to claim 2, wherein the approval is obtained from the provider. 4. The method according to claim 2, wherein approval is obtained from a third party. 5. The method according to claim 2, wherein approval is obtained over the Internet. 6. The method according to claim 5, wherein approval is obtained during communications between the at least one customer and the at least one vendor. 7. The method according to claim 1, wherein the billing account is one of a credit card account, a telephone number account, a cable television account, and an on-line services account. 8. The method according to claim 1, wherein the step of establishing the billing agreement comprises specifying a given billing account to which the transaction amount is billed. 9. The method according to claim 1, wherein the step of establishing the billing agreement comprises specifying a plurality of billing accounts to which the transaction amount is billed and wherein the transactional information includes identification of one of the plurality of billing accounts without specifying an account number. 10. The method according to claim 1, wherein the billing account is an account with the provider. 11. The method according to claim 1, wherein the billing account is an account with a third party. 12. The method according to claim 1, wherein the step of remitting comprises sending money. 13. The method according to claim 1, wherein the step of remitting comprises crediting a vendor account. 14. The method according to claim 13, wherein the vendor account is one of a credit card merchant account, a telephone number account, a cable television account, and an on-line services account. 15. The method according to claim 13, wherein the step of establishing the remitting agreement comprises specifying a given vendor account to which a portion of the transaction amount is remitted. 16. The method according to claim 13, wherein the step of establishing the remitting agreement comprises specifying a plurality of vendor accounts to which a portion of the transaction amount is remitted and wherein the transactional information comprises identification of one of the plurality of vendor accounts without specifying an account number. 17. The method according to claim 13, wherein the vendor account is an account with the provider. 18. The method according to claim 13, wherein the vendor account is an account with a third party. 19. The method according to claim 1, wherein the transactional information does not include the billing account number to which the transaction amount is billed. 20. The method according to claim 1, wherein the transactional information does not include any billing account number. 21. An Internet billing method comprising the steps by a vendor of: establishing a remitting agreement with at least one Internet access provider to remit to the vendor a portion of a transaction amount billed to a billing account of at least one customer of the at least one Internet access provider for products and services purchased over the Internet by the at least one customer from the vendor; communicating transactional information over the Internet with the at least one customer relating to a purchase made over the Internet by the at least one customer from the vendor, wherein the transactional information includes a transaction amount and not the billing account number; and receiving the portion of the transaction amount from the at least one Internet access provider. 22. The method according to claim 21, wherein the step of receiving comprises receiving money. 23. The method according to claim 21, wherein the step of receiving comprises receiving a credit to a vendor account. 24. The method " according to claim 23, wherein the vendor account is one of a credit card merchant account, a telephone number account, a cable television account, and an on-line services account. 25. The method according to claim 23, wherein the step of establishing the remitting agreement comprises specifying a given vendor account to which the portion of the transaction amount is remitted. 26. The method according to claim 23, wherein the step of establishing the remitting agreement comprises specifying a plurality of vendor accounts to which the portion of the transaction amount is remitted and wherein the transactional information comprises identification of one of the plurality of vendor accounts without specifying an account number. 27. The method according to claim 23, wherein the vendor account is an account with the at least one provider. 28. The method according to claim 23, wherein the vendor account is an account with a third party.

Inventors: EGENDORF ANDREW, EGENDORF, ANDREW
Applicants: EGENDORF ANDREW, EGENDORF, ANDREW
Application year: 1996
Main classification: G06F17
IPC codes: G06F13, G06Q10, G06Q20, G06Q30, G06Q50