Patent Publication Number: US-2009228336-A1

Title: System and method for processing financial transactions

Description:
This application claims priority in U.S. Provisional Application No. 60/120,760, entitled “System and Method for Processing Financial Transactions,” filed Feb. 19, 1999, bearing attorney docket no. 03204-6000. 
    
    
     FIELD OF THE INVENTION 
     The invention relates generally to retail transactions and, more particularly, to systems and methods for monitoring consumer behavior and for providing a secure, electronic payment in exchange for goods and services. 
     DESCRIPTION OF THE RELATED ART 
     Retail store chains survive on high sales volumes and low profit margins. Accordingly, retail professionals are constantly searching for cost-effective mechanisms to encourage consumers to shop at their retail stores and for efficient low-cost methods to process completed retail transactions. In the past, the most common approach utilized by retailers for motivating customers to shop in a particular establishment was to provide purchasing incentives to their customers, usually in the form of printed discount coupons. These coupons have been distributed to customers either through mass mailings or in a more focused manner, based on a customer&#39;s previous purchasing habits. Coupons have also been given to customers in retail stores, either from kiosks or at the check-out stand, in response to the customer&#39;s purchase of some preselected item or items. 
     Retailers have come to the realize that the more efficient approach to encouraging consumers to shop at their retail store is identify loyal customers and to offer incentives to them in response to their continued loyalty. Implementing systems that track customer purchasing trends for the purpose of identifying loyal customers can be prohibitively expensive. Furthermore, promoting retail store loyalty is a time-consuming process that necessitates determining consumer needs, which vary across demographic boundaries, and then providing the goods that satisfy those needs. Unfortunately, the process of analyzing collected consumer data is also expensive, time-consuming, and of limited use. Regional and national consumer demographics data available from Nielson and other agencies regarding consumer product movement is predictably too general to be useful to specific retailers. Additionally, these agencies do not address product movement demographics that would allow retailers to learn the particular needs and buying habits of people purchasing specific products. 
     An alternative to the traditional loyalty program that does not require demographics data is one in which increased sales and customer loyalty is obtained through a reward system. For example, the airline industry rewards loyal customers using frequent flyer programs. Attempts have also been made to develop “frequent shopper” marketing and sales promotion services in retail sales. Other retailers have experimented with programs that reward frequent shoppers by distributing cards to customers who regularly purchase name brand goods manufactured by a particular vendor. Cards are used at participating retail stores to identify the customer and record purchases of particular brand goods and to award points based on the number of brand good purchases. Points are accumulated, and gifts are given to the card member based on a predetermined criteria. 
     Unfortunately, none of these services completely address or meet the needs and interests of modern retailers. For example, many of these existing programs encourage “brand loyalty” or “retail store loyalty,” but do not permit the retailer to reward across brands (co-branding) or across retailers. Specifically, none of these services allow a retail store owner to reward purchase of Coca Cola™ products with a discount on Frito Lay™ snacks. Furthermore, none of these services allow a Wendy&#39;s™ franchise owner to reward the purchase of a predetermined number of Wendy&#39;s products with a complementary oil change at Jiffy Lube™ for example. Moreover, none of these services allow a retailer to associate particular consumer groups with specific consumer needs. For example, in the grocery retail business in the United States, double income families are pressed for time and show a trend toward less time being spent shopping and preparing meals. Retail grocers are challenged to provide incentives to encourage these kinds of shoppers into their stores. Retailers and consumers alike could benefit from systems that allow retailers to identify health conscious consumers and to offer incentives that appeal to the consumer&#39;s need for natural and/or healthy foods. Identifying those shoppers having special dietary needs, e.g. medical problems and then marketing to those dietary needs may be particularly advantageous to retailers. Providing products that appeal to certain groups instead of offering generic grocery items may also be profitable. 
     Complicating the reality that modern-day loyalty programs do not meet the needs of the modern retailer is the fact that an increasing number of retail store customers also own personal computers with many having access to computer network services that provide connections to the Internet. Although some computer sites connected to the World Wide Web have begun to offer “online” shopping services, and some services have proposed to deliver discount coupons through a computer network, the fill potential of online delivery of incentives has not been realized. 
     Aside from restricting the growth of loyalty programs, it is widely suspected that the emergence of the World Wide Web has also created an avenue for increased consumer exposure to fraudulent “online” transactions. Internet-based payment solutions give unprecedented access to personal information by uninvited eavesdroppers. Conducting these types of transactions over the Internet consequently requires additional security measures that are not found in conventional transaction processing networks. This additional requirement is necessitated by the fact that Internet communication is performed over publicly-accessible, unsecured communication lines in stark contrast to the private, dedicated phone line service utilized between a traditional “brick and mortar” merchant and a credit authorizing organization. As an example,  FIG. 1  is a diagrammatic representation of a conventional system  10  for processing retail non-cash transactions. A customer enters a merchant store  12  and makes a purchase using a credit card issued for example, by one of a plurality of credit card issuing agencies such as a bank or payment processing system  16 . Merchant store  12  may be one of a large number of similar stores, all owned or managed by a common parent corporation or headquarters  14 . A record of each credit card transaction, regardless of which card was used, is transmitted by a dedicated communications channel  13  to merchant corporation headquarters  14  of the retail outlet  12 . A processor at merchant corporation headquarters  14  analyzes the credit card transaction records received and then routes the transaction, along a second dedicated communications channel  15 , to an appropriate payment processing system  16 , according to the identification of the particular credit card used in the original transaction. 
     Compare that to the situation that arises when an online consumer purchases goods and services over the Internet. As shown in  FIG. 2 , when a consumer  18  transmits credit card information to an online merchant  24 , the information passes through countless servers  21  and routers  22  on its way to the online merchant  24 . Along the way, the information can easily be scanned and scrutinized by numerous interlopers (not shown). Thus, it is critical that any retail processing system utilizing the Internet or any other unsecured network as a communication medium, must employ some form of security or encryption. 
     In view of the shortcomings of currently available online transaction processing systems and methods, it is desirable to provide a system and method that increases customer convenience and security. It is also desirable to provide a system and method that allows merchants to easily compile demographics data for use in designing customer loyalty and incentive programs. 
     SUMMARY OF THE INVENTION 
     The present invention satisfies the above-described need by providing a system and method for processing consumer transactions. In the system of the present invention, a consumer located in a retail establishment identifies goods or services to be purchased and then communicates payment information to the merchant by transmitting an identification signal via a wireless customer transceiver to a merchant transceiver coupled to a point of sale (POS) device. Once the merchant transceiver captures the customer ID, it passes it to a POS device that then combines the customer ID, merchant ID and transaction data into an authorization request. The POS device then transmits the data to a transaction processing system (host computer) where the customer&#39;s payment method is identified. For payment methods requiring authorization, a request for authorization transmitted to the appropriate payment processing center. Once the payment processing center authorizes the transaction, it transmits an authorization code back to the POS device via the transaction processing system. Since the system never transmits a customers credit card or debit card number across an unsecured link, it provides a heightened degree of security over prior art systems. Also, by communicating with the merchant via a wireless customer transceiver, the system increases customer confidence that their credit card number or other payment data will not be impermissibly accessed and fraudulently utilized by nefarious retail store employees. The system also provides a much greater degree of convenience to participating customers since it allows them to preassign specific payment methods to specific retail establishments, and to have the preassigned payment methods automatically selected by the transaction processing system whenever the customer utilizes his/her wireless customer transceiver in the merchant&#39;s retail establishment. 
     The system also provides unprecedented benefits to merchants. Most importantly, the transaction processing system which is networked to the merchant&#39;s in-store POS devices, and to the merchant&#39;s on-line shopping network, allows merchants to quickly and efficiently process non-cash transactions for in-store and on-line customers, using the same system. Also, since a merchant can track the purchasing history of each customer who uses the transaction processing system to authorize payments, the merchant may provide for targeted incentives to the customer based on his or her prior purchases, regardless of their method of origination (in-store or on-line). Moreover, the transaction processing system&#39;s association with a plurality of different merchants allows a merchant associated with the system to couple its incentive program with that of another participating merchant, thereby allowing customer loyalty to be awarded across multiple merchants. 
     In another aspect, the present invention provides a method for securely processing financial transactions over the Internet or other unsecured network. The method includes utilizing a wireless customer transceiver to transmit a customer&#39;s ID to a transceiver coupled to the customer&#39;s computer. The computer identifies the desired product from a merchant&#39;s online WEB site and transmits the customer ID and the product information to the transaction processing system. As in the case of the preferred embodiment, the transaction processing system identifies the selected payment method and transmits the authorization request to the appropriate payment processing center. Once the transaction processor authorizes the transaction, it transmits an authorization code to the online merchant and the merchandise is then delivered to the customer&#39;s address. In addition to transmitting a transaction authorization, the transaction processing system also may transmit identification information and other data unique to the associated customer in the absence of a retail transaction. An additional embodiment of a transaction processing system includes a system capable of transmitting instructions to a vendor based on receipt of a customer ID (e.g., issue a ticket to the customer, provide access to the customer, etc.) 
     In yet another aspect, the present invention provides a method for associating a customer&#39;s preferences with his or her customer ID. For example, a fast food restaurant chain may choose to collect and store a description of a customer&#39;s favorite meal so that when the customer transmits his ID to a merchant transceiver located in the fast food restaurant, his favorite meal is ordered and payment processing occurs, without the customer uttering a single word. 
     To achieve these and other advantages, and in accordance with the purpose of the invention as embodied and broadly described, the invention provides a system for processing retail transactions. The system comprises a wireless customer transceiver preprogrammed with a unique customer/transmitter ID number, and a merchant transceiver that captures the customer/transmitter ID and forwards it to an associated POS device. The POS device receives transaction data via an input device and combines the transaction data with the received ID signal from the reader to form an authorization request. At least a portion of the authorization request may be encrypted to further enhance security. The POS device transmits the authorization request over a communications channel to the transaction processing system that includes a processor and a customer information database. The customer information database includes a plurality of customer entries with associated transaction processing attributes. The processor receives the authorization request, decrypts it (if necessary) and transmits it to the payment processing system in accordance with the customer&#39;s predetermined choice of payment method. The processor also stores data derived from a transaction entry associated with the customer ID. In addition to processing transactions, the system facilitates the collection and analysis of comprehensive demographics and purchasing data for managing consumer loyalty programs and performing trend analysis of consumer purchasing trends. 
     It is to be understood that both the foregoing general description and the following detailed description are exemplary and explanatory and are intended to provide further explanation of the invention as claimed. 
     Additional features and advantages of the invention will be set forth in the description which follows, and in part will be apparent from the description, or may be learned by practice of the invention. The objectives and other advantages of the invention will be realized and attained by the methods, systems, and apparatus particularly pointed out in the written description and claims hereof, as well as the accompanying drawings. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
       The accompanying drawings, which are incorporated in and constitute a part of this specification, illustrate embodiments of the invention and, together with the description, serve to explain the objects, advantages, and principles of the invention. 
       In the drawings: 
         FIG. 1  is a diagram illustrating a conventional retail credit card transaction processing system; 
         FIG. 2  is a diagram illustrating a conventional online computer system for purchasing goods and services over the Internet; 
         FIG. 3  is a diagram illustrating an improved system for processing transactions, consistent with the present invention; 
         FIG. 4  is a diagrammatic representation of a point of sale device in accordance with the present invention; 
         FIG. 5  is a diagrammatic representation of a payment processing terminal in accordance with the present invention; 
         FIG. 6  is a diagrammatic representation of a transaction processing system in accordance with the present invention; 
         FIG. 7  is a diagrammatic representation of an alternate embodiment of a system for processing transactions in accordance with the present invention; 
         FIG. 8  is a diagrammatic representation of an online merchant computer in accordance with the present invention; 
         FIG. 9  is a diagrammatic representation of an online customer computer in accordance with the present invention; 
         FIG. 10  is a diagrammatic representation of a customer transceiver in accordance with the present invention; 
         FIG. 11  is a detailed flow diagram depicting the steps performed by the preferred embodiment of a customer transceiver when brought in proximity of a merchant transceiver; 
         FIG. 12  is a diagrammatic representation of a merchant transceiver in accordance with the present invention; 
         FIG. 13  is a flow diagram illustrating the preferred method for processing financial transactions in accordance with the present invention; 
         FIG. 14  is a detailed flow diagram depicting the steps performed to enroll a customer in accordance with the present invention; 
         FIG. 15  is a detailed flow diagram depicting the steps performed to process a customer transaction in accordance with the present invention; 
         FIG. 16  is a detailed flow diagram depicting the steps performed to perform an end of day closing in accordance with the present invention; and 
         FIG. 17  is a detailed flow diagram depicting the steps performed to manage a customer loyalty program in accordance with the present invention. 
     
    
    
     DETAILED DESCRIPTION OF A PREFERRED EMBODIMENT 
     In the following detailed description of the preferred embodiment, reference is made to the accompanying drawings that form a part thereof, and in which is shown by way of illustration a specific embodiment in which the invention may be practiced. This embodiment is described in sufficient detail to enable those skilled in the art to practice the invention and it is to be understood that other embodiments may be utilized and that structural changes may be made without departing from the scope of the present invention The following detailed description is, therefore, not to be taken in a limited sense. 
     To achieve these and other advantages, and in accordance with the purpose of the invention as embodied and broadly described, the invention provides a system for processing retail transactions. The system comprises a customer transceiver preprogrammed with a unique customer/transmitter ID number, and a merchant transceiver that receives a customer identification signal from the customer transceiver and then forwards the received customer ID signal to an associated POS device. The POS device receives transaction data via an input device and combines the transaction data with the customer ID signal to form an authorization request, in those cases when the payment method requires an authorization. The POS device transmits the authorization request over a communications channel to a transaction processing system that includes a processor and a customer information database comprised of a plurality of customer entries with associated transaction processing attributes. The processor receives the authorization request and transmits it to the payment processing system dictated by the customer&#39;s payment choice for the transaction. The processor also stores data derived from a transaction entry associated with the customer ID. In addition to processing transactions, the system facilitates the collection and analysis of comprehensive demographics and purchasing data for managing consumer loyalty programs and performing trend analysis of consumer purchasing trends. 
     Turning first to the nomenclature of the specification, the detailed description which follows is represented largely in terms of processes and symbolic representations of operations performed by conventional computer components, including a central processing unit (CPU), memory storage devices for the CPU, and connected pixel-oriented display devices. These operations include the manipulation of data bits by the CPU and the maintenance of these bits within data structures residing in one or more of the memory storage devices. Such data structures impose a physical organization upon the collection of data bits stored within computer memory and represent specific electrical or magnetic elements. These symbolic representations are the means used by those skilled in the art of computer programming and computer construction to most effectively convey teachings and discoveries to others skilled in the art. 
     For the purposes of this discussion, a process is generally conceived to be a sequence of computer-executed steps leading to a desired result. These steps generally require physical manipulations of physical quantities. Usually, though not necessarily, these quantities take the form of electrical, magnetic, or optical signals capable of being stored, transferred, combined, compared, or otherwise manipulated. It is conventional for those skilled in the art to refer to these signals as bits, values, elements, symbols, characters, terms, objects, numbers, records, files or the like. It should be kept in mind, however, that these and similar terms should be associated with appropriate physical quantities for computer operations, and that these terms are merely conventional labels applied to physical quantities that exist within and during operation of the computer. 
     It should also be understood that manipulations within the computer are often referred to in terms such as adding, comparing, moving, etc. which are often associated with manual operations performed by a human operator. It must be understood that no such involvement of a human operator is necessary or even desirable in the present invention. The operations described herein are machine operations performed in conjunction with a human operator or user who interacts with the computer. The machines used for performing the operation of the present invention include general purpose digital computers or other similar computing devices. 
     In addition, it should be understood that the programs, processes, methods, etc. described herein are not related or limited to any particular computer or apparatus. Rather, various types of general purpose machines may be used with programs constructed in accordance with the teachings described herein. Similarly, it may prove advantageous to construct specialized apparatus to perform the method steps described herein by way of dedicated computer systems with hard-wired logic or programs stored in nonvolatile memory, such as read only memory. 
     The operating environment in which the present invention is used encompasses general distributed computing systems wherein general purpose computers, workstations, or personal computers are connected via communication links of various types. In a client server arrangement, programs and data, many in the form of objects, are made available by various members of the system. 
     Referring now to the remaining figures, corresponding reference characters refer to corresponding elements, wherever possible. 
       FIG. 3  is a diagrammatic representation of a system  30  for processing retail non-cash transactions in accordance with a preferred embodiment of the present invention. In  FIG. 3 , system  30  is comprised of merchant store  12 , payment processing system  16  and transaction processing system  26 . Located in merchant store  12  is at least one POS device  34  for capturing transaction and customer identification data. Payment processing system  16  utilizes at least one payment processing terminal  52  to process purchase transactions. POS device  34  communicates with transaction processing system  26  over communications link  28  and payment processing terminal  52  communicates with transaction processing system  26  over communications link  32 . While this specification describes a system wherein POS device  34  communicates directly with transaction processing system  26 , it is understood that POS device  34  may actually communicate with one or more intermediate computers that then communicate with transaction processing system  26 , without departing from the spirit and scope of this invention. Communication links  28  and  32  may be secure, dedicated communication links (like links  13  and  15  in  FIG. 1 ) or publicly accessible and unsecured. 
     A diagrammatic representation of POS device  34  is shown in  FIG. 4 . POS device  34  is any device used by merchants at the point of sale to record transactions between customers and merchants, including cash registers, point-of-sale terminals, etc. As shown, POS device  34  is comprised of a conventional microprocessor  36 , a random access memory (RAM)  38 , an input device (e.g., keyboard, scanner, etc.)  40 , a display or screen device  42 , a mass storage  44  (e.g., hard or fixed disk, removable floppy disk, optical disk, magneto-optical disk, or flash memory), a network interface card, modem or controller  46  (e.g., Ethernet), and a merchant transceiver  48 . As shown, the various components of each POS device  34  communicate through a system bus  51  or similar architecture. POS device  34  communicates with other POS devices (not shown) and with transaction processing system  26  via network interface card or modem  46 . Alternatively, the POS device  34  may be connected via an ISDN adapter and an ISDN line for communications with the transaction processing system  26 . merchant transceiver  48  provides wireless communication with a customer transceiver  50  (explained below) which may be carried by a customer on, for example, his key chain. There may be other components as well, but these are not shown to facilitate description of the unique aspects of this embodiment of the invention. The hardware arrangement of this computer, as well as the other computers discussed in this specification is intentionally shown as general, and is meant to represent a broad variety of architectures, which depend on the particular computing device used. For example, mass storage devices depicted with each computer may be co-located with its associated computing device on an internal storage device or it may be remotely located on an external storage device. 
     A diagrammatic representation of payment processing terminal  52  is shown in  FIG. 5 . Like POS device  34 , payment processing terminal  52  is comprised of a CPU  54 , RAM  56 , a mass storage device  62 , and a network interface card or modem  64  for communicating with transaction processing system  26 . Stored in mass storage device  62  is a payment database  66  for authorizing payment in response to consumer transactions. 
     A detailed diagram of transaction processing system  26  is shown in  FIG. 6 . As shown in  FIG. 6 , transaction processing system  26  is comprised of a CPU  86 , RAM  88 , an input device  90 , a display or screen device  92 , a mass storage device  94 , and a network interface card or modem  96  for communicating with POS device  34  and payment processing terminal  52 . Stored in mass storage device  94  is a customer information database  100  for identifying a customer, payment method, payment processor, and authorization data format when given a customer/transmitter ID number. The organization of data inside customer information database  100  may take on a variety of physical structures, dependent upon evolving data management technology. Examples include, but are not limited to flat files, relational tables, star tables, hierarchical files, and objects. The data will be organized so that storage and retrieval of customer data facilitates effective navigation, association, and use of customer-related data for identification, transaction authorization, customer contact, identification of customer preferences and other uses of the data consistent with the spirit and scope of this invention. The database is structured to provide maximum security to protect the privacy of customer and merchant information. The ability to relate groups of data such as customer data with specific customer transaction data, for example, will be controlled via the structure of the data storage design as well as through controls of the database system to prevent unauthorized access of detailed and aggregated data by both internal and external sources. 
     As shown in  FIG. 6 , customer database  100  may be comprised of the following categories of information: customer profile information  102 , merchant information  104 , fraud information  106 , loyalty program information  108 , transaction information  110 , customer payment method information  112 , and customer personal information  114 . Customer profile information  102  identifies and describes each customer. It includes, but is not limited to: customer address data, phone number, occupation, PIN, billing address, primary account holder name, authorized user name, customer transceiver activation status and customer transceiver identification number. Merchant information  104  identifies and describes each participating merchant. It includes, but is not limited to: merchant name, accepted payment methods with associated authorization procedures (if appropriate), merchant location and merchant identifier. It is important to note that some payment methods (e.g., check, credit and debit) require authorization procedures, while others (e.g., cash, certified check, etc.) do not. Fraud information  106  is used to ensure that customer transceivers  50  are not used by unauthorized users. This information includes, but is not limited to: transmission device identifier, activation status, merchant identifier, merchant location, date of sale, time of sale and sale amount. Loyalty program information  108  defines specific merchant loyalty programs. It includes, but is not limited to: program rules, specific points or other benefits for each merchant loyalty program component. Transaction information  110  includes a listing of the transactions previously conducted by a customer using transaction processing system  26 . The information includes, but is not limited to: transaction type, item purchased, merchant, date purchased, dale amount, loyalty program usage. Customer payment method information  112  defines the payment method to be used by each customer at each merchant. Examples include, but is not limited to: default payment method, credit card number, debit card number, bank account number, associations between each merchant and each payment method. Customer personal information  114  comprises a plurality of individual customer purchasing preferences and other customer-unique personal information. For example, suppose the merchant is Burger King™. The purchasing preference could be the customer&#39;s favorite meal or menu item such that whenever the customer initiates a transaction with the merchant, the purchasing preference will automatically be ordered for the customer. Other examples include, but is not limited to: customer shoe size, suit size, spouse&#39;s birthday, spouse&#39;s suit size, etc. Additional information may be stored in customer transaction database  100 , and the data may be organized in a different manner, without departing from the scope of the present invention. 
     A second embodiment of the present invention is directed to a method and apparatus for securely processing financial transactions over the Internet or other unsecured network.  FIG. 7  is a diagrammatic representation of a system  700  for processing retail, non-cash transactions in accordance with the second embodiment. In addition to the elements shown in  FIG. 3 , system  700  in  FIG. 7  further comprises an online consumer terminal  710  that communicates with transaction processing system  26  over communications link  715 . Online merchant  12 ′ replaces merchant store  12 , online merchant computer  734  replaces POS device  34 , and communication link  28 ′ replaces communication link  28  shown in  FIG. 3 . In this embodiment, communication links  28 ′ and  715  are typically unsecured, publically accessible links. As in the case of the preferred embodiment, communication links  28 ′,  32  and  715  may be any combination of publically accessible or secure dedicated links. 
     The difference between merchant store  12  ( FIG. 3 ) and online merchant  12 ′ is that merchant store  12  is a conventional “brick and mortar” store where consumers can physically select and purchase merchandise, whereas online merchant  12 ′ is a WEB site operated by a merchant that allows online consumers to examine and purchase merchandise over a computer network. Online merchant computer  734  is preferably operated by retail establishments (Macy&#39;s, K-mart, Border&#39;s etc.) Its main role is to collect merchandise orders from online consumer terminals  710 , and arrange for delivery of the merchandise once it receives authorization from a payment processing system  16 . 
       FIG. 8  is a diagrammatic representation of an online merchant computer  734  in accordance with the present invention. As shown in  FIG. 8 , online merchant computer  734  is comprised of a main memory  800 , a display device  810 , input device  820 , a mass storage device  840 , a CPU  830  and a network interface card or modem  850 . As further shown in  FIG. 8 , the mass storage device  840  contains the merchant&#39;s product database  845 . Product database  845  is comprised of information on various merchant products available online. Once a user accesses a merchant&#39;s home page, he/she will be able to access all of the merchant&#39;s product pages that are associated with the home page. Individual pages may be sent in the form of Hyper-Text Markup Language (HTML) pages across communication link  715  to a WEB browser  960  operating on a requesting online consumer computer  710 . 
     As shown in  FIG. 9 , the online consumer computer  710  preferably includes a main memory  900 , a display device  910 , input device  920  such as a keyboard and a pointing device (e.g., mouse, track ball, pen, slide pointer or similar device), a mass storage device  940 , a transceiver  970 , a printer  990 , and a CPU  930  for performing various functions related to retrieving and viewing WEB pages stored on the Internet. These components communicate through a system bus  980  or similar architecture. Additionally, the customer computer  710  is preferably connected to a network interface card or modem  950  for communication with the transaction processing system  26 . The mass storage device  940  of the customer computer  710  maintains an Internet browser  960  for directing the CPU. 
     The second preferred embodiment processes transactions very similarly to the first embodiment. That is, an online consumer located at an online consumer computer  710  selects merchandise, identifies it to the online merchant computer  734  and inputs his or her customer/transmitter ID number using a customer transceiver  50  into transceiver  970 . The information is transmitted from transceiver  970  via system bus  980  to CPU  930  where it is then transmitted to the online merchant computer  734 . Upon receiving the data, the online merchant computer  734  creates an authorization request comprised of the customer ID, a merchant ID and transaction data, and then transmits the data to transaction processing system  26 . Transaction processing system  26  then transmits the data to the appropriate payment processing system  16 . As in the case of the preferred embodiment, payment processing system  16  authorizes the transaction and then transmits an authorization back to the online merchant computer  734  and online consumer computer  710  via the transaction processing system  26 . Once the online merchant computer  734  receives the authorization, merchants online sales associate prepares the merchandise identified by the customer, and then ships it to the address indicated in the customer information database  100  or any other location specified by the customer. The transaction processing system  26  is capable of managing customer loyalty and consumer trend analysis in the same manner as the first embodiment. In fact, since the transaction processing system  26  is capable of interacting with both in-store and on-line systems, it provides participating merchants the ability to comprehensively monitor customer loyalty and consumer purchasing trends for online consumers and in-store consumers using a single system. 
     A third embodiment of the present invention is directed to a method and apparatus for processing retail non-cash transactions at a kiosk or other similar self-service station. A terminal located at the kiosk is similar to online consumer computer  710  except that a product database similar to that found in online merchant computer  734  is stored in the mass storage device. In operation, the customer in merchant store  12  approaches a kiosk in the store, indicates a food, merchandise or service selection, and provides a customer/transmitter ID using input device  920 , customer transceiver  50  or a combination of the two. In doing so, the customer has placed an order for the desired article of food, merchandise or service and simultaneously initiated payment processing. Once the transaction is authorized, a receipt is printed on printer  990  and the purchase is delivered to the customer, either at the kiosk or at another predetermined location. This embodiment provides a combination self-service, automatic payment processing system, with order preparation being the only delay. 
     In yet another embodiment, a customer may place an order by telephone prior to arriving at merchant store  12 , by interfacing with an automated system using DTMF tones through the telephone. That is, when an automated operator at merchant store  12  answers the telephone call, the customer is prompted to enter the customer/transmitter ID number and his/her purchasing preference via the DTMF buttons. Upon arrival, the customer&#39;s food, merchandise or service is ready at a drive-through window or inside a special line within merchant store  12 . Payment has, at this time, already been processed. The customer uses customer transceiver  50  to identify themselves prior to a sales associate providing the merchandise to the customer. In this example, customer transceiver  50  is simply used to identify that the customer receiving the food, merchandise or services is the customer who corresponds to the customer/transmitter ID previously communicated to the merchant through the DTMF system. Different transactions may be conducted and different information may be exchanged between the merchant and customer to confirm the customer&#39;s identification without departing from the scope of this invention. For example, a customer may conduct a transaction over the telephone using a payment method not recognized by the transaction processing system  26 , and then take delivery of the merchandise/services after confirming his/her identification using customer transceiver  50  and paying for the items. Customer transceiver  50  may also be used to confirm an individual&#39;s identification even in the absence of an underlying transaction. For example, a transceiver  48  may be located adjacent to an airplane loading gate or other restricted access point. A customer seeking to gain access to the restricted area simply provides his identification by interfacing customer transceiver  50  with merchant transceiver  48 . This action initiates the security process which may also require an additional form of identification (e.g., picture ID, boarding pass, etch) to complete. Once the process is completed, the customer is permitted to cross the boundary. Another embodiment of customer transceiver  50  includes a customer transceiver that identifies a class of persons (e.g., handicapped) such that when a person interfaces with the transaction processing system  26 , an attendant will be alerted as to any special customer needs. Yet another embodiment includes a customer transceiver  50  that identifies an individual to a service provider, permitting the service provider to then access information about the customer for the purpose of providing personal services to the customer. A further embodiment includes a customer transceiver  50  that transmits automatic teller machine (ATM) card information to an ATM. Once the ATM receives the information, the customer is prompted to input his/her PIN and transaction information, allowing the process to continue as usual. 
     Various active and customer transceivers ( 48  and  50 , respectively) may be implemented in the course of practicing this invention. For example, the TIRIS system commercially available from Texas Instruments Corporation is representative of the technology. Further details of digital signature transponder (DST) and TIRUS technology are contained in U.S. Pat. No. 5,541,604 assigned to Texas Instruments Deutsche Line GmBh, the disclosure of which is hereby expressly incorporated by reference. A simplified diagram of a preferred embodiment of customer transceiver  50  is shown in  FIG. 10 . As shown, customer transceiver  50  is comprised of a keyboard  1110 , CPU  1120 , memory  1130 , receiver  1140 , transmitter  1150  and security pad  1160 . As further shown in  FIG. 10 , keyboard  1110  is comprised of a plurality of buttons  1110   a - 1110   l , labeled 0-9, “*” and “#”. Each button may correspond to its labeled number/character, or to a selectable user option. For example, button  1110   a  may correspond to the number “1” such that when a user presses it, the number “1” is communicated to CPU  1120 . Button  1110   a  may alternatively correspond to a user-specified item (e.g., primary credit card, a secondary credit card, or a debit/bank account). In a preferred embodiment, customer transceiver  50  has no independent battery or other power source, such that operational energy is received from transceiver ( 48  or  970 ), indicated generally in  FIGS. 4 and 11 , respectively. Customer transceiver  50  stores identification information such as a customer ID, or customer/transmitter ID in programmable, read-only memory (PROM) device  1130  for subsequent, repeated transmission to a transceiver ( 48  or  970 ). Memory device  1130  could optionally be an erasable PROM (EPROM) or random access memory (RAM) device, thereby allowing ease in modifying the contents of the memory device. As previously stated, one important characteristic of the preferred embodiment of customer transceiver  50  and merchant transceiver  48  is that operational energy for customer transceiver  50  is transmitted from the transceiver ( 48  or  970 ). When customer transceiver  50  is brought within close proximity to transceiver ( 48  or  970 ), a signal of a desired frequency passes through receiver  1140 , causing it to generate a supply voltage for powering the other components of customer transceiver  50 . The signal is received by CPU  1120  which then sends a signal to memory device  1130  and then to customer transceiver  1150  for transmission to an adjacent merchant transceiver  48 . 
       FIG. 11  is a detailed flow diagram depicting the operation of customer transceiver  50 . The process begins at step  1200  when the user brings customer transceiver  50  within close proximity to a transceiver ( 48  or  970 ). In step  1205 , an interrogation signal is transmitted from reader to customer transceiver  50 . CPU  1120  processes the interrogation signal with an algorithm which is fixedly programmed into memory  1130  (step  1210 ). If the signal is valid, processing flows to step  1215 , otherwise processing terminates. In step  1215 , the CPU waits for user input via keyboard  1110 . If the CPU does not receive input, processing flows to step  1245 , otherwise processing flows to step  1220 , where the CPU determines whether the first character entered is a “#”, corresponding to button  1110   l . If the first character is a “#”, the CPU transmits a purchasing preference associated with the entered number (step  1240 ). As previously stated, customer database  100  is capable of storing a plurality of customer purchasing preferences, corresponding to specific items offered by merchant. Pressing “#” prior to pressing a numbered key specifies which order item the customer is interested in selecting. For example, “#1” corresponds to the first purchasing preference, pressing “#2” corresponds to the second, and so on. Processing then flows to step  1245 . If the first character is not a “#”, the CPU determines whether the first character is a “*”, corresponding to button  1110   j  (step  1225 ). If the first character is a “*”, the CPU  1120  transmits a payment choice selection associated with the entered number (step  1235 ). The customer must have a valid payment method associated with the entered number, and it must be accepted by the merchant. Otherwise, the process will terminate without authorizing the transaction. After the customer information has been entered, processing flows to step  1245  where the CPU  1120  next transmits the stored customer/transmitter ID. If the first character is not a “*”, processing flows to step  1230  where the CPU  1120  simply transmits the entered numbers as a customer ID number. That is, the user may actually override the pre-programmed customer ID number and manually input a customer ID number. Processing then flows to step  1250  where the user is prompted to enter a PIN after which processing terminates. When the user manually enters a customer ID number, the system may also require additional authorizing information like a photo ID and/or a signature, to further ensure that customer transceiver  50  is not used in a fraudulent manner. While this specification describes operation of customer transceiver  50  as including the capability to specify a merchandise/service selection an alternate method of payment, a customer number or a PIN, it is obvious that any data or combination of data may be transmitted by customer transceiver  50  without departing from the spirit and scope of this disclosure. 
     As shown in  FIG. 10 , customer transceiver  50  may optionally include a security pad  1160  comprising a fingerprint reader or other biometric recording device. In operation, when customer transceiver  50  is issued to the customer and prior to its first use, the customer inputs a biometric (fingerprint, palm print, pore print, retinal configuration, etc.) into security pad  1160 . For the purposes of this discussion, it is assumed that the biometric is a fingerprint. The first time that customer transceiver  50  is used, the customer fingerprint is read and stored in memory  1130  of customer transceiver  50 . When customer transceiver  50  is used for subsequent transactions, it will only activate if the same finger is placed upon security pad  1160 , creating a match with fingerprint information stored at the first use of customer transceiver  50 . Of course, any finger may be used at initial usage, however, the same finger must then consistently be used on all subsequent transactions. As an alternative, a predetermined number of separate fingerprints may be stored in customer transceiver  50 , permitting its use by friends or family members. Initial fingerprints will be read, for example, by depressing one of four predetermined buttons prior to first use of customer transceiver  50 . A series of fingerprints is then placed upon the security pad  1160  for storage within memory  1130  of customer transceiver  50 . Customer transceiver  50  would then permit subsequent purchases to be made when a fingerprint on pad  82  matches any of the fingerprints prestored within customer transceiver  50 . Fingerprint reading, storing, and matching technology is currently available from the plurality of sources including, for example, Indicator Technology Corporation, Biometric Identification Inc., and AuthenTec. Even though this specification describes the use of a fingerprint reader, other biometric identification options such as palm prints, pore prints, retinal configurations, etc. may, of course, also be implemented using customer transceiver  50 . It should be understood that while this specification describes a security pad associated with customer transceiver  50 , the security pad may actually be included in a computer display touch screen. 
     Another embodiment of customer transceiver  50  includes a customer transceiver with read/write capability. That is, when customer transceiver  50  is used to authorize a transaction, information is passed into memory  1130  from the merchant transceiver  48 . For example, a predetermined quantity of money may be stored in memory  1130  such that whenever a transaction is carried out, the amount of the transaction is deducted from the total stored in memory  1130 . When the total is exhausted, customer transceiver  50  will not activate until an amount is restored to memory  1130 . Customer transceiver  50  may also track the customer&#39;s participation in loyalty programs by updating memory  1130  with purchase data whenever a transaction is authorized. Customer transceiver  50  may additionally support remote reprogramming of memory  1130 . In other words, a customer wishing to change the customer/transmitter ID associated with customer transceiver  50  may do so by interfacing customer transceiver  50  with merchant transceiver  48  and then modifying the customer/transmitter ID by entering a special code sequence using keyboard  1110 , for example. It is envisioned that whenever an customer/transmitter ID is updated by a customer, transaction processing system  26  will disable the subject customer transceiver, pending confirmation of the change. Customer transceiver  50  may alternatively accept customer/transmitter ID updates from transaction processing system  26  via merchant transceiver  48  without user input. 
     Although the described embodiments employ a customer transceiver carried as a separate item by the customer, customer transceiver  50  may be integrated into another device. For example, customer transceiver  50  may be embedded in a cellular phone, pager, remote control, car lock device, personal digital assistant, watch, or other miniature electronic device. 
     While the preferred embodiment of customer transceiver  50  envisions a device that receives operational energy from a merchant transceiver  48  prior to transmitting an RF signal, it is understood that any device capable of transmitting a signal across a wireless medium (e.g., cellular, microwave, etc.) may be utilized without departing from the scope of this disclosure. 
       FIG. 12  shows a detailed diagram of merchant transceiver  48  as previously discussed with reference to  FIGS. 4 and 10 . As shown in  FIG. 12 , merchant transceiver  48  is comprised of a CPU  1300 , memory  1305 , keyboard  1310 , printer  1320 , communication interface  1330 , display  1340 , transmitter  1350 , and receiver  1360 . Keyboard  1310 , as further shown in  FIG. 14 , is comprised of a plurality of buttons  1310   a - 1310   l , labeled 0-9, “*”, and “#”. Keyboard  1310  may be utilized for receiving manually entered data (e.g., PIN) and transmitting the data to communication interface  1330 . In operation, transmitter  1350  transmits an interrogation signal stored in memory  1305  to customer transceiver  50 , causing the customer transceiver to generate a sufficient supply voltage for powering the customer transceiver. Receiver  1360  receives a signal from customer transceiver  50  and then transmits the signal to communication interface  1330  for subsequent transmission to an associated POS device  34 , online customer computer  710 , kiosk, etc. Communication interface  1330  may comprise a wireless or wireline interface, permitting merchant transceiver  48  to communicate with external devices from widely separated locations for the purpose of transmitting information received from a customer transceiver  50  via receiver  1360 . Communication interface  1330  further permits merchant transceiver  48  to interface over the Public Switched Telephone Network (PSTN) via an RS232 connection to an internal modem (not shown). Customer transceiver  50  consequently may be capable of interfacing with a central location (over CATV coaxial cable) such that a person wishing to watch a pay-per-view™ movie can communicate with the pay per view system and purchase the movie directly through the television. Printer  1320  may be used to print a receipt for a customer upon completion of a transaction, and display  1340  may be used to communicate information to a customer (e.g., when to input his/her PIN.) 
     An alternate embodiment merchant transceiver includes a merchant transceiver built into or attachable to a portable device (e.g., Palm Pilot™, hand-held computer, etc.) that enables the capture and transmission of a customer ID and other security information for authenticating payment for goods and services via the Internet, or authenticating and authorizing access to digital information (e.g., movies, music, online books, research) and applications (e.g., voice/mail, personal calendar, “sports entertainment package,” golf handicapping program). A further embodiment includes a portable merchant transceiver that allows a vendor (pizza delivery person) to authorize transactions from any location. The merchant transceiver includes a CPU  1300  with sufficient memory  1305  to capture and locally process a transaction. The merchant transceiver may or may not have wireless connectivity to the transaction processing system  26 . Yet a further embodiment includes a merchant transceiver associated with a vending machine (snacks, cigarettes, stamps, etc.), pay phone, etc. for authorizing consumer transactions. 
     As discussed above, the preferred embodiment of the merchant transceiver  48  transmits power to, and receives an RF signal from a co-located customer transceiver. However, any device capable of receiving a wireless signal (cellular, microwave, etc.) is capable of functioning in the place of the merchant transceiver without departing from the scope of this invention. 
     In a preferred embodiment, transaction processing system  26  is owned and operated by a company separate from the entities that own merchant store  12  and payment processing system  16 . In exchange for the service provided by transaction processing system  26 , merchants are charged fees to process transceiver-based transactions. First, a transaction fee is charged for each transaction processed through transaction processing system  26 . In addition, an advertising fee may be charged to cover brand communication. That is, customer transceiver  50  is supplied under a brand name owned by the owner of transaction processing system  26 . This brand name is widely advertised to entice customers to patronize merchant stores  12  having the ability to conduct transactions using customer transceiver  50 . Thus, the owner of transaction processing system  26  charges an advertising fee to participating merchant stores  12 . 
     Alternatively, the transaction processing system  26  may permit large corporations owning multiple retail outlets to market customer transceiver  50  using their brand name. Thus, such merchant companies will “issue” customer transceivers  50  and pay a fee to the transaction processing system. The transaction processing system then offsets these costs to merchant stores  12  by providing monthly rebates based on the dollar volume of transceiver-based transactions conducted through its outlets. 
     The Preferred Method for Processing a Financial Transaction 
     The preferred method for processing a financial transaction will now be described in conjunction with  FIGS. 13-17 . As described above, the system  10  is operative for capturing a customer&#39;s transmitter ID at a POS device  34 , combining the captured data with the merchant ID and the customer&#39;s selected purchase items into an authorization request, encrypting at least a portion of the request (if desired), and transmitting it to transaction processing system  26 . Once it receives the authorization request, the transaction processing system  26  identifies the appropriate payment processing system  16  and then transmits the customer&#39;s payment data and the transaction data to the payment processing system  16  for authorization. After the payment processing system  16  authorizes the transaction, it transmits an authorization code back to the merchant via the transaction processing system  26 . The transaction processing system  26  may also transmit customer identification and purchase data upon request by a participating merchant. In addition to its function of authorizing retail transactions, transaction processing system  26  also collects the transaction data for later use in compiling consumer purchasing trend data and tracking a consumer&#39;s progress in a merchant&#39;s loyalty program. 
       FIG. 13  is a flow diagram illustrating the preferred method  200  for processing financial transactions. The steps that comprise the method described in  200  are carried out by the various equipment that form a part of system  10  for processing financial transactions. The method begins at step  300  with the customer accessing the enrollment subsystem of the transaction processing system  26 . This step includes all the activities that must take place before an individual can consummate retail transactions with customer transceiver  50  using transaction processing system  26 . After the customer is enrolled, processing flows to step  400  and the system then is capable of processing a customer transaction. At a predetermined time interval, preferably every 24 hours, processing then flows to step  500  where system  10  updates customer preferences and profiles and settles charges for the time period. Next processing flows to step  600  at which time system  10  performs the processing necessary to archive captured data and update loyalty program data. 
       FIG. 14  is a detailed flow diagram depicting the steps performed by system  10  in step  300  of  FIG. 13 . As shown in  FIG. 14 , the process begins in step  310  when a customer accesses the enrollment subsystem of the transaction processing system  26  for the purpose of opening an account. The act of accessing the enrollment subsystem of transaction processing system  26  can be performed any number of ways from simply telephoning a human customer assistance representative and verbally communicating the information over the telephone, to dialing a telephone number and interfacing with a computer using dial tone multi frequency (DTMF) tones, to logging onto the Internet and accessing a predetermined uniform resource locator (URL). Once the customer is logged onto the system, processing flows to step  320  and the enrollment subsystem of transaction processing system  26  prompts the user to enter customer information. During this process, the customer provides customer profile information  102 , customer payment method information  112 , and customer personal information  114 . These data are used for communicating with the customer and may be combined with other data (e.g., transaction information  110 , customer personal information  114 , etc.) to provide special promotions of particular interest to the customer. During enrollment, the customer also provides the payment methods to be invoked by the transaction processing system  26 , whenever he/she initiates a transaction. For example, a customer will provide credit, debit, and other payment-related data so that the customer may be properly charged for purchases. When the customer enters data in the customer transaction database  100 , he/she may select any one of the merchant&#39;s accepted payment methods in which he/she also has accounts. That is, the customer may choose to have all of his transactions conducted in merchant #1&#39;s retail establishments allocated to his VISA™ card even though he has several other cards that are also accepted by merchant #1. Alternatively, the customer may specify that his transceiver-based transactions will be processed and paid through his bank credit or debit card. Furthermore, the customer may specify that all transactions at merchant #1 will be cash transactions, despite the fact that the customer also has credit accounts accepted by merchant #1. The number of merchants associated with each customer record in customer transaction database  100  depends on the number of merchants entered into the system by a particular customer. In other words, customer #1 may have two merchant entries, corresponding to the number of merchants that the customer frequents, whereas customer #2, who is less debt averse may have 20 merchant entries. It is important to realize that certain information must be entered in order for the system to operate properly (e.g., name, address, PIN#, etc.), and other information can be entered at the discretion of the customer (e.g., marital status, birth date, etc.) When enrolling, the customer is informed that not only is the input of certain information discretionary, but that they can restrict the publication and use of the information by the transaction processing system  26 . 
     Customers may also identify a default payment method to be applied to a participating merchant for which no other payment method has been identified. This default payment method would also be applied to new merchants that join the transaction processing system  26  after the customer enrolled. Part of the enrollment process includes the customer providing customer personal information such as preferred product brands at different merchants, anniversary and other important dates, clothing sizes, etc. As explained below, all of the data provided by the customer during the enrollment process can be later changed at the customers discretion. A customer can request more than one customer transceiver  50  to be associated with each account as well as identify other authorized users for each customer transceiver. The rules for use of multiple customer transceivers  50  by multiple individuals are controlled based on the rules of the payment processor  16 . 
     Once the customer has entered the requested information, system  26  validates the payment methods selected by the customer for legitimacy and acceptance. This process is carried out by comparing user-inputted information with data stored in payment processing terminal  52 . Once the data is determined to be valid, processing flows to step  345  and the data is stored in customer information database  100 . A customer transceiver  50  is programmed with the customer&#39;s ID number in step  370 , the customer transceiver  50  is mailed to the customer in step  380 . Before the customer can use customer transceiver  50  to authorize a transaction, customer transceiver  50  must be activated by the customer. This security process helps ensure legitimate use of the customer transceiver  50  by authorized personnel. In a preferred embodiment, customers activate customer transceiver  50  using identification information provided by them during enrollment and information provided to them in the device package. Once customer transceiver  50  is activated, it can be used by a customer to activate a transaction. If the data is invalid, the system prompts the user to correct the invalid information and processing is routed back to step  320  where the customer is prompted to re-input the invalid information. 
       FIG. 15  is a detailed flow diagram depicting the steps performed in step  400  of  FIG. 13 . As shown in step  410 , the first step occurs when a customer shopping in merchant store  12  identifies merchandise for purchase to a sales associate. Next in step  415 , the sales associate utilizes input device  40  of POS device  34  to enter the merchandise into CPU  36  which then computes a transaction amount. After reviewing the transaction record, the customer in step  420  identifies him/herself to system  26  by interfacing customer transceiver  50  with merchant transceiver  48 . Customer transceiver  50  consists of an electronic transmitter/receiver combination including a unique customer/transmitter ID number programmed therein. When customer transceiver  50  interfaces with merchant transceiver  48 , a customer identification signal including the unique customer/transmitter ID number is transmitted to merchant transceiver  48 . To provide security, merchant transceiver  48  and customer transceiver  50  employ technology in which an interrogation signal is transmitted from merchant transceiver  48  to customer transceiver  50 . Customer transceiver  50  processes the interrogation signal with an algorithm which is fixedly programmed into customer transceiver  50  and then transmits a response back to merchant transceiver  48 , consisting of a customer/transmitter ID number. The interrogation signal and the response signal are highly encrypted such that intense processing power over a long period of time will be necessary to fraudulently extract the unique customer/transmitter ID number from the customer transceiver  50 . 
     Once merchant transceiver  48  receives the customer/transmitter ID number, it transmits the data, together with the specifics of the retail transaction (cost, identification of merchandise, etc.) over communications link  28  to transaction processing system  26  (step  425 ). An important feature of system  10  is that the customer&#39;s credit card is never exchanged with a sales associate. Therefore, the possibility that the card will be fraudulently used by an unscrupulous sales associate does not arise. 
     An alternate embodiment of the present invention includes a system  26  that instead of transmitting a customer&#39;s credit card number across communication links ( FIGS. 3 and 9 ), only transmits a customer/transmitter ID across communication links. In this embodiment, payment processor  16  maintains data that provides a correlation between customer/transmitter ID numbers and payment methods. Also, merchant store  12  creates a transaction record based using the customer/transmitter ID number instead of the credit/debit card number. In operation, when an authorization request is transmitted to transaction processing system  26  from a merchant store  12 , transaction processing system  26  processes transactions by matching the customer/transmitter ID number with data stored in customer information database  100 . After the system identifies the customer ID (step  435 ), it links it to the customer&#39;s name (step  445 ) and then to the transaction information (step  450 ). If the system does not find the customer ID in step  435 , it transmits a message to the merchant informing it that the customer is attempting to utilize an invalid customer transceiver (step  440 ). If the system finds the customer ID in step  435 , it may simultaneously authorize the retail transaction, pending final authorization by the payment processor  16 . That is, at the same time as the rest of the authentication process is occurring, the system may authorize the initiation of delivery of the desired goods services. For example, during an automobile refueling process, the system will activate a fuel pump, minimizing the customers delay even though final approval has not yet been obtained. If in step  460 , the system finds the merchant&#39;s name, it identifies the customer&#39;s payment method for that particular merchant (step  470 ) and determines the flow and destination of the authorization data, based on the type of transaction (credit, debit, cash, etc.) Security information may also be utilized by the transaction processing system  26  to reduce misuse of customer transceiver  50 . Examples of controls include but are not limited to checking the frequency of use of a particular customer transceiver  50  within a certain period of time, frequency of use a customer transceiver  50  within certain financial limits and frequency of use of customer transceiver  50  and financial limits within a specific geographic region. 
     In the event that the transaction requires authorization, such as in a credit card transaction, the merchant POS device  34  communicates with transaction processing system  26  as described above to identify the correct payment processor  16  and transmit the transaction request to that payment processor for disposition. If the transaction is authorized in step  484 , the system next in step  488  determines whether the customer is entitled to any frequent customer, or loyalty awards by comparing the customer&#39;s transaction activity stored in transaction information  110  with the loyalty program information  108 . The authorization and the award data (if any) are transmitted to the merchant via the transaction processing system  26  (step  490 ) and in step  492 , the customer is given his merchandise or services and notified of his/her award. In step  494  the transaction processing system  26  archives the transaction data in secondary storage device  94  for later analysis. If for some reason the payment processing system  16  is not able to process this particular transaction due to, for example, communication&#39;s difficulties or a transaction amount causing the customer to exceed his credit limit, a message is transmitted to the merchant via the transaction processing system  26  in step  486  that the transaction is not authorized and the in-progress delivery of merchandise (e.g., gasoline) is immediately discontinued. The sales associate is then notified in a well-known manner to ask the customer for an alternative method of payment and processing terminates. While this specification provides that the transaction terminates when the payment method cannot be authorized, there are several other alternatives that can be implemented without departing from the scope of the present invention. For example, if the payment method does not work, it is possible that an alternate could be requested by the system and utilized. 
     If the transaction does not require authorization (i.e., cash or other liquid asset is used), POS device  34  still communicates with transaction processing system  26  to provide transaction information  110  and loyalty program information  108  to customer information database  100  and to determine whether the customer is entitled to a loyalty award. 
     A customer may also utilize transaction processing system  26  to conduct inquiries into the customer&#39;s progress toward fulfilling the requirements of a particular loyalty program. To initiate the request, the customer accesses the transaction processing system  26  as mentioned above (i.e., by telephoning a human customer assistance representative and verbally communicating the request over the telephone, or dialing a telephone number and interfacing with a computer using DTMF tones, or logging onto the Internet and accessing a predetermined URL), and then communicating his/her request. 
       FIG. 16  is a detailed flow diagram depicting the steps performed in step  500  of  FIG. 13 . In a preferred embodiment, customers can update information contained in the customer information database  100  by following the same process utilized when the information is first communicated to the system. The reason for the update can range anywhere from changed circumstances (customer address, status change, etc.) to changing preferences with respect to specific merchants to adding new merchants for a customer. Data security controls are utilized to ensure that only legitimate customers can access and modify their profile data. To preclude customer updates from interfering with the operation of the system, it is envisioned that transaction processing system  26  will update customer information database  100  at predetermined times during the day, preferably during off-peak usage times. As shown in step  510 , transaction processing system  26  periodically retrieves updated customer profile data from an online memory location (RAM  88 , or secondary storage device  94 ). In step  520 , the transaction processing system  26  reconciles merchant accounts. That is, the system aggregates merchant sales, credits merchants and payment processors when appropriate and then presents invoices to each merchant and payment processor, based on sales activities. Customer profile information  102 , merchant information  104 , transaction information  110 , and customer payment method information  112  are used to determine the fees to be paid to each entity (merchant store  12  and payment processor  16 , and transaction processing system  26 , as appropriate.) Once the information is aggregated, the transaction processing system  26  updates customer profile data (step  530 ). 
     The process depicted in  FIG. 16  does not include the process performed when a user seeks to have his/her transponder inactivated due to it being lost or stolen. In this case, the database will be immediately updated in order to preclude fraudulent use of the transponder by unauthorized personnel. 
       FIG. 17  is a detailed flow diagram depicting the steps performed in step  600  of  FIG. 13 . The transaction processing system  26 , as shown in step  610  periodically retrieves raw transaction data from secondary storage device  94 . This retrieval can be performed at a predetermined time each day, or it can be performed shortly after the transaction is completed. In any event, the raw transaction data consists of customer profile information  102 , merchant information  104 , loyalty program information  108 , transaction information  110 , and customer personal information  114 . This data is collected and analyzed for different purposes such as determining the effectiveness of the transaction processing system  26 , refining and developing new, related products, and developing, tracking and analyzing loyalty programs and special promotions that are of specific interest to transaction processing system  26  customers and merchants. In addition, the information may be sold to merchant companies  12  and payment processing systems  16  to provide personalized service to individual customers. It is expected that merchant companies would pay for data from transaction processing system  26  based on volume or a per project basis. In step  620 , the transaction processing system  26  updates loyalty data and in step  630 , the updated information is transmitted to merchants who desire the additional data customer transaction data with demographic data that may be used to track customer purchasing trends. 
     It will be apparent to those skilled in the art that various modifications and variations can be made in the disclosed process and product without departing from the scope or spirit of the invention. Other embodiments of the invention will be apparent to those skilled in the art from consideration of the specification and practice of the invention disclosed herein. It is intended that the specification and examples be considered as exemplary only, with a true scope and spirit of the invention being indicated by the following claims.