Abstract:
An electronic communication system associated with a settlement house for settling an electronic transaction between a customer and a merchant. The communication system is configured to receive through a first electronic communication path a first account identifier of a first account associated with the customer and a transaction amount from the merchant, contact the customer through a second electronic communication path to allow the customer to select a payment method, and send through a third electronic communication path the transaction amount and a second account identifier of a second account associated with the customer to a financial services provider associated with the payment method.

Description:
CROSS REFERENCE TO RELATED APPLICATIONS 
     This application is a divisional application of U.S. patent application Ser. No. 09/851,553, filed May 8, 2001, entitled, “System and method for electronic transaction settlement”, the entirety of which is incorporated herein by reference. 
    
    
     FIELD OF THE INVENTION 
     This invention relates generally to electronic transactions and more particularly to electronic transaction settlement. 
     BACKGROUND 
     Customers are increasingly using electronic means to purchase goods and services. To complete a credit card transaction, merchants typically no longer make a physical imprint of the card. Instead, a magnetic strip on the card is read by a computer to access the customer&#39;s credit card number and expiration date. Many people now also use debit cards to pay for goods and services, where the transaction amount is deducted from a bank account. Some transactions are carried out where the merchant has no physical contact with the credit card. For example, when ordering goods or services via a merchant&#39;s Internet website, a customer typically enters a credit card type, number, and expiration date into fields of a web form. 
     Enjoyment of some goods and services still requires the physical presence of the customer, for example dining at a restaurant. In such a situation, if customers wish to use a credit or debit card, then they must have that card upon their person. For this reason, many people habitually carry multiple cards with them at all times. This increases the chances of one or more of the cards being lost or stolen. 
     Also, in a restaurant situation, a credit or debit card may be out of the customer&#39;s possession for a length of time, when one or more persons may have an opportunity to copy the card number and expiration date. It is a significant concern of customers to be able to enjoy the convenience of using credit and debit cards while minimizing the risk of unauthorized access to their card numbers. 
     SUMMARY OF THE INVENTION 
     The method for electronic transaction settlement includes a customer providing an account identifier and contact information to a merchant, the merchant contacting a settlement house and transmitting the account identifier and a transaction amount, the settlement house contacting the customer, preferably via a mobile communication device such as a mobile telephone or a handheld computing device. 
     The customer then selects a payment method, such as a credit card or debit card. The customer may have several options to choose from. The customer&#39;s communication device transmits the selection to the settlement house. The settlement house contacts a credit provider or the customer&#39;s bank for authorization. If the settlement house receives an authorization, the settlement house transmits it to the client, who then typically approves the amount. 
     The settlement house then completes the transaction with the credit provider or customer&#39;s bank and the merchant&#39;s bank. If the customer selected a credit card, the credit provider adds a charge in the transaction amount to the customer&#39;s account. If the customer selected a debit card, the customer&#39;s bank deducts the transaction amount from the customer&#39;s bank account. The merchant&#39;s bank credits the merchant&#39;s account with the transaction amount. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
         FIG. 1  is a block diagram of one embodiment of an electronic transaction settlement system, in accordance with the invention; 
         FIG. 2  is a block diagram of a further embodiment of an electronic transaction settlement system, in accordance with the invention; and 
         FIG. 3  is a flowchart of method steps for settling electronic transactions, in accordance with one embodiment of the invention. 
     
    
    
     DETAILED DESCRIPTION 
       FIG. 1  shows an electronic transaction settlement system including, but not limited to, a settlement house  110 , a merchant  112 , a merchant&#39;s bank  114 , a credit provider  116 , and a customer  118 . Merchant  112  may be a retail store, restaurant, wholesaler, or any other type of provider of goods or services. Merchant&#39;s bank  114  may be any type of financial service provider where merchant  112  maintains an active account. Credit provider  116  is a financial service provider that provides a line of credit to customer  118 . For example, credit provider  116  may have issued a credit card to customer  118 . Customer  118  is preferably an individual consumer, but may also be a representative of a business or non-profit organization. 
     Settlement house  110  is preferably an entity independent of merchant  112 , merchant&#39;s bank  114 , credit provider  116 , and customer  118 ; however, in some embodiments settlement house  110  may be affiliated with one or more of the other parties. For example, settlement house  110  may include credit provider  116 . Settlement house  110  preferably has communication paths to merchant  112 , merchant&#39;s bank  114 , and credit provider  116 . The communication paths may include an Internet connection, a PSTN connection, a Local Area Network (LAN) connection, a Wide Area Network (WAN) connection, a wireless network connection, or a combination of the above. 
     Customer  118  preferably communicates, at least in part, via a wireless communication path with settlement house  110 . Customer  118  may use any type of mobile communication device, including but not limited to a mobile telephone, a pager, and a handheld computing device such as a personal digital assistant (PDA). Customer  118  may use any type of interface to communicate with settlement house  110 , including key strokes, voice commands, or a touchscreen. 
     Settlement house  110  manages settlement of transactions between merchant  112 , merchant&#39;s bank  114 , credit provider  116 , and customer  118 . For instance, a purchase by customer  1118  from merchant  112  may include a transaction between customer  118  and credit provider  116 , a transaction between credit provider  116  and merchant&#39;s bank  114 , and a transaction between merchant  112  and merchant&#39;s bank  114 . 
     Customer  118  preferably maintains an account with settlement house  110 . The account may contain information regarding several options for payment, including a bank debit card and one or more credit cards. 
     To initiate a purchase, customer  118  provides contact information of settlement house  110  to merchant  112 . Customer  118  also provides account information, such as a name or account number, to merchant  112 . Merchant  112  uses the contact information to initiate communications with settlement house  110 . Merchant  112  then transmits the account information for customer  118  and the purchase amount. Settlement house  110  then completes the transaction so that credit provider  116  adds a charge to the credit account of customer  118  and merchant&#39;s bank  114  records a payment into the account of merchant  112 . Further details of a transaction settlement are discussed below in conjunction with  FIG. 3 . 
     Throughout the purchase transaction, merchant  112  does not have access to the credit account number of customer  118 , which provides privacy to customer  118 . If credit provider  116  denies the transaction, customer  118  may then select a credit account with another credit provider (not shown). Customer  118  is thus spared any embarrassment due to a denial of a credit transaction. 
       FIG. 2  shows an electronic transaction settlement system including, but not limited to, settlement house  110 , merchant  112 , merchant&#39;s bank  114 , a customer&#39;s bank  216 , and customer  118 . Customer  118  maintains an account with customer&#39;s bank  216 . The account may be a checking account, a savings account, or any other type of bank account. Customer  118  preferably has a debit card with an associated debit card number that allows him or her to pay for purchases with monies from the account with customer&#39;s bank  216 . 
     In the  FIG. 2  embodiment, settlement house  110  uses the debit card number to settle transactions with customer&#39;s bank  216 . Customer  118  provides contact information and a name or account information to merchant  112 . Merchant  112  contacts settlement house  110  and transmits the name or account information and the amount of the transactions. Settlement house  110  then contacts customer  118  via a mobile telephone or other communication device. Customer  118  selects a payment method, in this embodiment the debit card. Settlement house  110  then contacts customer&#39;s bank  216  to request payment for the amount of the transaction. 
     Although not shown if  FIG. 2 , customer  118  may also select additional payment methods. Customer  118  may have an account with a financial service provider that may or may not be a bank or credit provider and may select to pay using that account. For example, if customer  118  is a teenager, a parent may deposit an amount of money with a financial service provider who establishes an account accessible by the teenager. Thus the parent may provide spending money to the teenager without using cash. 
       FIG. 3  is a flowchart of method steps for settling electronic transactions, according to one embodiment of the invention. First, in step  310 , customer  118  provides identification to merchant  112 . The identification may include the customer name, an account name or number, or any other type of identification. Customer  118  may also provide contact information for settlement house  110 . Next, in step  312 , merchant  112  transmits the identification of customer  118  to settlement house  110 . 
     In step  314 , settlement house  110  contacts customer  118 . Settlement house  110 , may place a call to a mobile telephone of customer  118 , or contact customer  118  via any other type of mobile communication device. Then, in step  316 , customer  118  selects a payment method, for example a credit card, and this selection is transmitted to settlement house  110 . Customer  118  may have the option of choosing among several credit cards or debit cards, depending on his or her arrangement with settlement house  110 . 
     In step  318 , settlement house  110  contacts credit provider  116  for approval of the transaction. Settlement house  110  then transmits the account information, for example the credit card number, and the amount of the transaction. In step  320 , credit provider  116  approves or denies the transaction. If credit provider  116  denies the transaction, then in step  322  settlement house  110  forwards the denial to customer  118 . The method returns to step  316 , where customer  118  may select an alternate payment method. 
     If credit provider  116  approves the transaction, then in step  324  settlement house  110  forwards the approval to customer  118 , and customer  118  approves (OKs) the transaction to settlement house  110 . Customer approval may include an additional amount to add to the transaction, for example when using a debit card and requesting cash. In step  326 , settlement house  110  sends the approval of customer  118  to credit provider  116 , which then adds a charge in the transaction amount to the account of customer  118 . In step  328 , settlement house  110  sends a transaction record to merchant&#39;s bank  114 , which the credits the account of merchant  112  with the transaction amount. 
     The invention has been explained above with reference to a preferred embodiment. Other embodiments will be apparent to those skilled in the art in light of this disclosure. For example, the present invention may readily be implemented using configurations other than those described in the preferred embodiment above. Additionally, the present invention may effectively be used in conjunction with systems other than the one described above as the preferred embodiment. Therefore, these and other variations upon the preferred embodiments are intended to be covered by the present invention, which is limited only by the appended claims.