Patent ID: 7873540

Claim:
A method of obtaining payer authorization for a purchase instrument transaction conducted in physical proximity between a merchant and a customer in the absence of a transaction card reader, wherein the customer has previously registered for a payer authorization service, comprising: the merchant using an Internet-enabled wireless mobile communication device to contact a virtual terminal service; the merchant entering transaction information into the device; the device transferring the transaction information to the virtual terminal service; the virtual terminal service accessing a record relating to the customer, thereby identifying the customer as having registered for payer authorization; the virtual terminal service sending a payer authorization request to the device of the merchant; the customer entering a payer authorization code into the device of the merchant; the device of the merchant sending the payer authorization code to the virtual terminal service; the virtual terminal service comparing the payer authorization code to stored information relating to the customer; the virtual terminal service sending an authorization message to the device of the merchant based on the comparison; and charging the merchant an interchange rate relating to the transaction, wherein the interchange rate is less than an interchange rate for a “card not present” transaction.