United States Patent
`Walker et al.
`
`[19]
`
`[54] METHOD AND APPARATUS FOR
`PROVIDING AND PROCESSING
`INSTALLMENT PLANS AT A TERMINAL
`
`[75] Inventors: Jay S. Walker, Ridge?eld; James A.
`J orasch, Stamford; Andrew S. Van
`Luchene, NorWalk, all of Conn.
`
`[73] Assignee: Walker Digital, LLC, Stamford, Conn.
`
`[21] Appl. No.: 08/946,508
`[22]
`Filed:
`Oct. 7, 1997
`
`Related U.S. Application Data
`
`[63] Continuation-in-part of application No. 08/920,116, Aug.
`26, 1997, which is a continuation-in-part of application No.
`08/822,709, Mar. 21, 1997.
`
`[51] Int. Cl.7 .................................................... .. G06F 17/60
`[52] U.S. Cl. ............................... .. 705/38; 705/30; 705/37;
`705/39; 705/40
`[58] Field of Search ................................ .. 705/38, 39, 40,
`705/7, 1, 30, 34, 35; 380/4, 23, 24
`
`[56]
`
`References Cited
`
`U.S. PATENT DOCUMENTS
`
`Re. 34,915
`3,573,747
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`
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`
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`
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`
`US006064987A
`Patent Number:
`Date of Patent:
`
`[11]
`[45]
`
`6,064,987
`May 16, 2000
`
`OTHER PUBLICATIONS
`
`Penny; Payments on the ’Net? HoW many? HoW safe? ABA
`Banking Journal v87, n11, p46—54; Dialogue, ?le: 268,
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`Jan. 1997.
`
`(List continued on neXt page.)
`
`Primary Examiner—Allen R. MacDonald
`Assistant Examiner—Romain J eanty
`Attorney, Agent, or Firm—Dean Alderucci; Kurt M.
`Maschoff
`
`[57]
`
`ABSTRACT
`
`Acentral controller receives from a POS terminal a purchase
`price and a ?nancial account identi?er. The ?nancial account
`identi?er speci?es a ?nancial account, such as a credit card
`account. The central controller, in turn, generates one or
`more installment plan identi?ers de?ning installment plans
`for payment of the purchase price. The installment plan
`identi?ers are based on the purchase price and/or the ?nan
`cial account identi?er. For example, certain accounts or
`certain high purchase prices may merit preferred installment
`plans. The installment plan identi?ers are transmitted to the
`POS terminal. A purchaser at the POS terminal selects
`Whether he Would like to pay for his purchase in installments
`and, if so, using Which installment plan. The POS terminal
`generates a selection signal indicative of Whether to accept
`any of the installment plans, and transmits the selection
`signal to the central controller. The central controller
`receives the selection signal. If the selection signal indicates
`acceptance of any installment plan, use of the accepted
`installment plan for the ?nancial account is authorized.
`Thereafter, bills are generated Which re?ect installment
`charges to be paid.
`
`44 Claims, 20 Drawing Sheets
`
`K54
`
`CRED'T CARD
`ACCOUNT
`NUMBER
`E
`1111-3333
`15> 33336333
`
`130
`
`1111-2222
`13} 22222222
`
`1111-1111
`\> “114111
`
`PURCHASE
`PRICE
`
`TRANSACTION
`IDENTIFIER
`
`m
`
`m
`
`'NSTALLMENT
`PLAN
`IDENTIFIER
`m
`
`NUMBER 0':
`PAYMENTS
`MADE
`MA
`
`INSTALLMENT
`AMOUNT
`
`m
`
`$221.47
`
`$482.61
`
`$435.97
`
`118271
`
`128497
`
`130456
`
`A
`
`A
`
`B
`
`9
`
`4
`
`0
`
`$20.09
`
`$43.79
`
`$21.14
`
`MasterCard, Exh. 1010, p. 1
`
`

`
`6,064,987
`Page 2
`
`US. PATENT DOCUMENTS
`
`OTHER PUBLICATIONS
`
`4,760,247
`4,815,741
`4,825,045
`4,839,507
`4,854,590
`4,859,838
`4,882,473
`4,908,761
`4,910,672
`4,922,522
`4,937,853
`4,947,028
`4,973,952
`4,982,337
`4,993,714
`5,056,019
`5,119,295
`5,128,862
`5,132,914
`5,172,328
`5,173,851
`5,177,342
`5,192,854
`5,201,010
`5,216,595
`5,220,501
`5,223,698
`5,231,569
`5,239,165
`5,243,515
`5,245,533
`5,262,941
`5,274,547
`5,283,731
`5,287,268
`5,297,031
`5,302,811
`5,309,355
`5,353,218
`5,353,219
`5,380,991
`5,383,113
`5,420,606
`5,459,306
`5,481,094
`5,504,475
`5,510,979
`5,572,653
`5,581,064
`5,592,375
`5,592,376
`5,602,377
`5,611,052
`5,612,868
`5,615,269
`5,620,079
`5,621,201
`5,621,640
`5,632,010
`5,664,115
`5,665,953
`5,715,314
`5,724,424
`5,727,249
`5,754,655
`5,809,144
`5,903,879
`
`7/1988
`3/1989
`4/1989
`6/1989
`8/1989
`8/1989
`11/1989
`3/1990
`3/1990
`5/1990
`6/1990
`8/1990
`11/1990
`1/1991
`2/1991
`10/1991
`6/1992
`7/1992
`7/1992
`12/1992
`12/1992
`1/1993
`3/1993
`4/1993
`6/1993
`6/1993
`6/1993
`7/1993
`8/1993
`9/1993
`9/1993
`11/1993
`12/1993
`2/1994
`2/1994
`3/1994
`4/1994
`5/1994
`10/1994
`10/1994
`1/1995
`1/1995
`5/1995
`10/1995
`1/1996
`4/1996
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`11/1996
`12/1996
`1/1997
`1/1997
`2/1997
`3/1997
`3/1997
`3/1997
`4/1997
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`5/1997
`9/1997
`9/1997
`2/1998
`3/1998
`3/1998
`5/1998
`9/1998
`5/1999
`
`Keane et al. .
`
`Small .
`
`Humble .
`
`May .
`Jolliff et al. .
`
`Okiharu .
`Bergeron et al. .
`
`Tai .
`
`Off et al. .
`
`Scanlon .
`
`Brule et al. .
`
`Gorog ................................... .. 235/380
`Malec et al. .
`
`Burr et al. .
`
`Golightly .
`Schultz et al. .
`
`Kapur .
`
`Mueller .
`
`Cahlander et al. .
`
`Cahlander et al. .
`Off et al. .
`
`Adams .
`
`Counts .
`
`Deaton et al. .
`
`Protheroe .
`
`Lawlor et al. .......................... .. 380/24
`
`Kapur .
`Myatt et al. ............................ .. 705/38
`
`Novak .
`
`Lee .......................................... .. 705/37
`
`Marshall .
`
`Saladin et al. .
`Zoffel et al. .
`
`Lalonde et al. ........................... .. 705/1
`
`McCarthy .
`
`Gutterman et al. ..................... .. 705/37
`
`Fukatsu .
`
`Lockwood .
`De Lapa et al. .
`Mueller et al. .
`
`Valencia et al. .
`Kight et al. ............................. .. 705/40
`Begum et al. .
`Stein et al. .
`
`Suda .
`
`Houdou et al. .
`
`Moderi et al. .
`DeTemple et al. .
`Riley et al. .
`Salmon et al. ............................ .. 705/7
`
`Hodroff .
`
`Beller et al. .
`
`Dykstra et al. ......................... .. 705/38
`Off et al. .
`
`Micali ..................................... .. 380/49
`
`Molbak .
`
`Langhans .............................. .. 235/380
`
`Burke .
`
`Briechle et al. .
`
`Fraser ...................................... .. 705/37
`
`MaZZamuto et al. .
`
`Payne et al. ........................ .. 380/24
`
`Gifford .................................... .. 380/24
`
`Pollin ...................................... .. 705/40
`Hughes et al. .
`380/24
`Sirbue et al. ..
`380/25
`
`Mitchell .................................. .. 705/38
`
`Mobile claims to have the key to speedy card transactions;
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`“Cape Town”, Reuters Ltd., Nov. 8, 1979.
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`Cook, Louise, “ConsumerWatch: Clip, Snip, Save”, Busi
`ness Wire, Mar. 12, 1984.
`Green, Jan, “Farm Bills Please Assns; National Grocers
`Association”, Supermarket News, p. 6, Dec. 23, 1985.
`“POS Spectrum: ALottery Looks to POS for Growth”, POS
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`Schrage, Michael, “An Experiment in Economic Theory;
`Labs Testing Real Markets”, The Bergen Record, p. B01,
`Nov. 26, 1989.
`Schwall, Benjamin, “Let’s Play the Cash Register Receipts
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`Philips Offers Customers Financing Through Citicorp, Phil
`ips Medical Systems North America, Citicorp North
`America Inc., Health Industry Today, p. 4, Jun. 1991.
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`vent Misredemptions”, Chain Store Age Executive with
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`“Winn—Dixie/T he Salvation Army Report Contributions For
`War Against Hunger”, PR Newswire, Jun. 10, 1993.
`Jones, Jeanne, “Data Readers Streamline Management;
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`Wholesalers”, The Houston Post, p. D1, Jun. 26, 1994.
`Fiorinin, Phillip, ‘“No Place for Penny?’ Smallest Coin
`Doesn’t Make Cents To Some”, USA Today, p. 1A, Jul. 29,
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`Smith, Alison, “Survey of UK Consumer Credit and Asset
`Finance”, The Financial Times, p. VI, Nov. 3, 1994.
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`For Withdrawl”, Crain’s Chicago Business, p. 8, Jun. 19,
`1995.
`Knippenberg, Jim, “Psst! Will Local Radio Empires Strike
`Back?”, p. F01, The Cincinnati Enquirer, Jul. 23, 1995.
`“Spain: BBV Launches New Card”, Card International, p. 5,
`Jun. 22, 1995.
`Hadley, Kimberly, “Pastors Praying Anti—arson Effort Will
`Burn Bias”, The Nashville Banner, p. A13, Jul. 26, 1996.
`Gapper, John, “NatWest Reports Rise in Bad Debt”, The
`Financial Times, p. 9, London Edition, Jul. 31, 1996.
`“Lynx Technology: Lynx to Provide Business Leasing Pro
`gramme Through Schroder Leasing”, M2 Presswire, Aug. 9,
`1996.
`Taylor, Paul, “Towards a Dream Market”, The Financial
`Times (London), p. 3, Sep. 4, 1996.
`Bonnici, Joseph, “Consumer Issues in Coupon Usage: An
`Exploratory Analysis”, pp. 31—40, Journal of Applied Busi
`ness Research, Winter 1996/1997.
`“Opinion: X—Press Betting”, La Fleur’s Lottery World, Feb.
`7, 1997.
`Singletary, Michelle, “Electronic World, Unchecked Prob
`lem? U.S. Move to Paperless Paymemts Raises Worries
`About Those Who Don’t Use Banks”, p. C01, The Wash
`ington Post, Mar. 4, 1997.
`“Avco Financial Services”, downloaded from http://ww
`w.homefurnish.com/NHFA/avco.htm on May 23, 1997.
`“Products and Services: Checkout Direct” downloaded from
`http://catalinamktg.com/prodcdirhtm on May 29, 1997.
`
`MasterCard, Exh. 1010, p. 2
`
`

`
`6,064,987
`Page 3
`
`Riordan, Teresa, “Patents”, p. D2, The NeW York Times,
`Jun. 9, 1997.
`Nairn, Geoff, “The Key to Your Identity: Falling Costs Will
`AlloW Fingerprint Veri?cation To Be Widely Used”, The
`Financial Times (London), p. 12, Jul. 15, 1997.
`“about us; Classi?eds2000: The Internet Classi?eds”, doWn
`loaded
`from
`http://WWW.classi?eds2000.com/cgi—cls/
`Display.eXe?C2K+aboutus on Aug. 6, 1997.
`“Acquiring Credit”, doWnloaded from http://ianrWWW.un
`l.edu/IANR/PUBS/NEBFACTS/NF91—2.HTM on Sep. 3,
`1997.
`“About IAO”, doWnloaded from http://WW.iaoauction.com/
`about.htm on Sep. 8, 1997.
`“Siren Technologies/Introducing the Digital MenuBoard”,
`Siren Technologies Inc. Brochure, (undated).
`Michael Schrage, “An Experiment in Economic Theory;
`Labs Testing Real Markets”, The Record, Nov. 26, 1989 at
`p. B01.
`Laura Del Rosso, “Marketel Says It Plans to Launch Air
`Fare ‘Auction’ in June”, Travel Weekly, Apr. 29, 1991 at p.1.
`Jeff Pelline, “Travelers Bidding on Airline Tickets: SF Firm
`Offers Chance for Cut—Rate Fares”, The San Francisco
`Chronicle, Aug. 19, 1991 at p. A4.
`
`Robert Kuttner, “Computers May Turn the World Into One
`Big Commodities Pit”, Business Week, Sep. 11, 1989 at p.
`17.
`Laura Del Rosso, “Ticket—Bidding Firm Closes Its Doors”,
`Travel Weekly, Mar. 12, 1992 at p. 1.
`“Cyber Bid”(http://WWW.cyberbid.com) (1996).
`John Kelsey and Bruce Schneier, “Conditional Purchase
`Offers”, Apr. 4, 1997.
`“HoW It All Works”, The United Computer Exchange (http://
`WWW.uce.com/hoWitWorks), doWnload date: Jul. 23, 1997.
`“About
`Us”,
`Classi?eds2000
`(http://
`WWW.classi?eds2000.com), doWnload date: Aug. 6, 1997.
`“General Trading Information and Terms Provided By trad
`ing?oor.com”
`(http://WWW.trading?oor.com/info.htm),
`doWnload date: Aug. 14, 1997.
`“What
`Is
`Nasdaq”
`(http://WWW.axfordcom/cor?n/
`corf11.htm), doWnload date: Aug. 15, 1997.
`“About IAO”, Interactive Auction Online (http://WW
`W.iaoauction.com/about.htm), doWnload date: Sep. 8, 1997.
`“Onsale Auction Supersite”, Onsale, Inc. (http://WWW.onsa
`le.com), doWnload date: Sep. 8, 1997.
`
`MasterCard, Exh. 1010, p. 3
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 1 0f 20
`
`6,064,987
`
`K10
`
`CENTRAL
`CONTROLLER
`1_2
`
`STORE 1
`H
`
`STORE 2
`@
`
`STORE a
`15
`
`FIG. 1
`
`MasterCard, Exh. 1010, p. 4
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 2 0f 20
`
`6,064,987
`
`7 f 14
`
`P081
`
`g0
`
`P05 2
`
`Q
`
`PO83
`
`%
`
`STORE1
`
`CENTRAL
`CONTROLLER
`1_2
`
`FIG. 2
`
`MasterCard, Exh. 1010, p. 5
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 3 0f 20
`
`6,064,987
`
`K 20
`
`CARD
`READER
`12
`
`P08
`PROCESSOR
`Q
`
`CENTRAL
`CONTROLLER
`Q
`
`346D
`
`POS PROGRAM
`
`INVENTORY
`DATABASE
`
`38
`
`\d/
`
`FIG. 3
`
`MasterCard, Exh. 1010, p. 6
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 4 0f 20
`
`6,064,987
`
`K 12
`
`CONTROLLER
`PROCESSOR
`Q
`
`K 14
`
`PO81
`29
`
`i/ PC8222 X _
`
`PO83
`2_4
`
`SToRE 1
`
`PROGRAM
`
`PURCHASER
`DATABASE
`
`TRANSACTION
`DATABASE
`
`E
`
`46
`
`48
`
`INSTALLMENT PLAN
`DATABASE
`
`50
`
`PURCHASER BILLING
`DATABASE
`52
`
`INSTALLMENT PAYMENTS
`DATABASE
`54
`
`MERCHANT
`DATABASE
`
`56
`
`V
`
`FIG. 4
`
`MasterCard, Exh. 1010, p. 7
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 5 0f 20
`
`6,064,987
`
`57
`
`CREDIT CARD
`ACCOUNT
`NUMBER
`Q1
`1111-1111-
`1111-1111
`1111-2222-
`2222-2222
`1111-3333-
`\’ 3333-3333
`
`52>’
`
`59\’
`
`f, 46
`
`NAME
`
`ADDRESS
`
`BALLIQTTCE
`
`BALANCE
`
`6_1
`
`BILL
`SMITH
`SUSAN
`GREEN 1
`ELIOT
`BROWN
`
`52
`123 RED ST.
`ANYWHERE, USA
`45a BLUE ST.
`ANYWHERE, USA
`678 GRAY DR.
`ANYWHERE, USA
`
`Q
`
`55
`
`$21000
`
`“D00
`
`$1900
`
`“D1694
`
`W20“
`
`$90-32
`
`FIG. 5A
`
`MasterCard, Exh. 1010, p. 8
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 6 of 20
`
`6,064,987
`
`a
`
`m_w<:ow5n_
`
`moan.
`
`._.z<_._omm_s_
`
`m_m_n__._.zmn__
`
`Em_s_._._<5z_
`
`23¢
`
`E::zmn__
`
`Imm
`
`%
`
`fl
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`ad
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`
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`
`Emma
`
`Emma
`
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`
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`
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`
`N20?
`
`92.:
`
`$32
`
`MasterCard, Exh. 1010, p. 9
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 7 0f 20
`
`6,064,987
`
`f 50
`
`INSTALLMENT
`PLAN
`IDENTIFIER
`9.5
`
`TERM
`
`'NgiiEEsT
`
`g
`
`E
`
`A
`
`B
`
`c
`
`12 MONTHS
`
`24 MONTHS
`
`v
`
`36 MONTHS
`
`0
`
`16A
`
`0
`
`15/0
`
`0
`
`13/0
`
`REQUIRED
`PURCHASE
`PRICE
`E
`BETWEEN $250
`AND $1,000
`BETWEEN $250
`AND $1,000
`BETWEEN $250
`AND $1,000
`
`90
`
`9b
`
`94\>
`
`\>
`
`FIG. 5C
`
`MasterCard, Exh. 1010, p. 10
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 8 0f 20
`
`6,064,987
`
`CREDIT CARD ACCOUNT NUMBER 1111-1111-1111-1111
`
`TRANSACTION
`IDENTIFIER
`@
`
`TRANSACTION
`DATE
`m
`
`BILLABLE
`CHARGE
`l2_0
`
`MERCHANT
`IDENTIFIER
`22
`
`TRANSACTION
`DESCRIPTION
`E
`
`128003
`
`8/21/97
`
`$32.81
`
`12345
`
`MISC.
`GROCERIES
`
`112
`
`114
`
`128116
`
`8/22/97
`
`$12.92
`
`12348
`
`GASOLINE
`
`130456-B-1
`
`8/28/97
`
`$21.14
`
`NA
`
`COLOR
`TELEVISION 456
`PAYMENT 1/24
`
`FIG. 5D
`
`MasterCard, Exh. 1010, p. 11
`
`

`
`U.S. Patent
`
`0002/091yHM
`
`Sheet 9 of 20
`
`6,064,987
`
`Ezmzra25¢
`
`
`
`
`
`
`._.z:O_2<mw_u__._.zmo_moan_.z3ooo<
`
`m_m__n__._.zm_n__Emzsz
`
`:m_2j<5z_mommmsszEms_jEmz_zo_5<mz<Emm<Io%n_E5Emmo
`
`qnle3
`
`mm
`
`Em::.Ea-§m-::
`
`
`.88-88
`
`
`
`.NNNENNN5Na;fimm;_:
`
`
`.::-::
`
`58%.::.::
`
`MasterCard, Exh. 1010, p. 12
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 10 0f 20
`
`6,064,987
`
`56 x
`
`MERCHANT
`\DENTIFIER
`
`MERCHANT
`NAME
`
`ADDRESS
`
`150
`
`152\>
`
`15>»
`\,
`
`1516.
`
`12456
`
`12457
`12458
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`E
`
`E
`4820 RED ST.
`ANYWHERE, USA
`7221 AZURE LA.
`ANYWHERE‘ USA
`4281 GREEN STRIP DR.
`ANYWHERE, USA
`
`RETAIL STORE x
`
`GROCER Y
`GASOLINE
`SUPPUER z
`
`FIG. 5F
`
`MasterCard, Exh. 1010, p. 13
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 11 0f 20
`
`6,064,987
`
`CREDIT CARD
`ACCOUNT
`NUMBER
`
`1111-1111
`1111-1111
`
`NAME
`
`ADDRESS
`
`BALANCE
`LIMIT
`
`BALANCE
`
`BILL
`SMITH
`
`123 RED ST.
`ANYWHERE, USA
`
`$2.000
`
`$1,016.94
`
`CREDIT CARD
`ACCOUNT
`NUMBER
`
`1111-1111
`1111-1111
`
`TRANSACTION
`IDENTIFIER
`
`130456
`
`215
`
`TRAN SACTION
`DATE
`
`INSTALLMENT
`PLAN
`IDENTIFIER
`
`MERCHANT
`IDENTIFIER
`
`PURCHASE
`PRICE
`
`8/23/97
`
`B
`
`1 23456
`
`$435.97
`
`MERCHANT
`IDENTIFIER
`
`MERCHANT
`NAME
`
`ADDRESS
`
`12456
`
`RETAIL STORE X
`
`4820 RED ST.
`ANYWHERE, USA
`
`INSTALLMENT
`PLAN
`IDENTIFIER
`
`TERM
`
`' INTEREST
`RATE
`
`B
`
`24 MONTHS
`
`15%
`
`REQUIRED
`PURCHASE
`PRICE
`
`BETWEEN $250
`AND $1,000
`
`CREDIT CARD ACCOUNT NUMBER 1111-1111-1111-1111
`
`TRANSACTION
`IDENTIFIER
`
`TRANSACTION
`DATE
`
`BILLABLE
`CHARGE
`
`MERCHANT
`IDENTIFIER
`
`TRANSACTION
`DESCRIPTION
`
`1 30456-B-1
`
`8/28/97
`
`$21.14
`
`NA
`
`COLOR
`TELEVISION 456
`PAYMENT 1/24
`
`CREDIT CARD
`ACCOUNT
`NUMBER
`
`1111-1111
`1111-1111
`
`PURCHASE
`PRICE
`
`TRANSACTION
`IDENTIFIER
`
`INSTALLMENT
`PLAN
`IDENTIFIER
`
`NUMBER OF
`PAYMENTS
`MADE
`
`INSTALLMENT
`AMOUNT
`
`$435.97
`
`130456
`
`0
`
`$21.14
`
`FIG. 6
`
`MasterCard, Exh. 1010, p. 14
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 12 0f 20
`
`6,064,987
`
`PROCESS PURCHASE
`AT POS TERMINAL
`
`302
`\ SELECT \NSTALLMENT PLAN
`110
`
`/_ 30o
`
`‘
`
`DETERMINE INSTALLMENT
`PLAN OPTIONS
`
`304
`1
`
`, STORE INSTALLMENT PLAN
`s_1_2_
`
`GENERATE B|LL(S)
`
`g5
`
`FIG. 7
`
`MasterCard, Exh. 1010, p. 15
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 13 0f 20
`
`6,064,987
`
`GENERATE PURCHASE PRICE
`
`GENERATE FINANCIAL
`ACCOUNT IDENTIFIER
`
`3_2Z
`
`324
`
`TRANSMIT PURCHASE PRICE AND
`FINANCIAL ACCOUNT IDENTIFIER
`TO CENTRAL CONTROLLER
`
`Q5
`
`RECEIVE INSTALLMENT PLAN
`IDENTIFIERS FROM CENTRAL
`CONTROLLER
`
`E
`
`V
`
`SELECT WHETHER ANY INSTALLMENT
`PLAN IS ACCEPTED
`I
`TRANSMIT SELECTION SIGNAL
`TO CENTRAL CONTROLLER
`
`FIG. 8
`
`MasterCard, Exh. 1010, p. 16
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 14 0f 20
`
`6,064,987
`
`340
`
`K
`
`RECEIVE PURCHASE PRICE
`AND FINANCIAL ACCOUNT
`IDENTIFIER
`
`342
`
`GENERATE INSTALLMENT
`PLAN IDENTIFIERS
`
`TRANSMIT INSTALLMENT PLAN
`IDENTIFIERS TO POS TERMINAL
`
`Y
`
`RECEIVE SELECTION SIGNAL
`
`w
`
`35
`
`_34_8
`
`ACCEPTED
`INSTALLMENT
`PLAN?
`E
`
`AUTHORIZE USE OF THE
`INSTALLMENT PLAN
`
`END
`
`FIG. 9
`
`MasterCard, Exh. 1010, p. 17
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 15 0f 20
`
`6,064,987
`
`360 x
`
`APPLICATION
`OF PURCHASE PRICE
`AUTHORIZED?
`@
`
`NO
`
`INSTALLMENT
`PAYMENTS
`ALLOWED?
`
`DETERMINE INSTALLMENT PAYMENTS
`§§6_
`
`FIG. 10
`
`MasterCard, Exh. 1010, p. 18
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 16 0f 20
`
`6,064,987
`
`FIG. 11
`
`MasterCard, Exh. 1010, p. 19
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 17 0f 20
`
`6,064,987
`
`400 x‘
`
`DATE 9/15/97
`
`STATEM ENT
`
`410
`
`FINANCE PLAN MINIMUM PAYMENT: $21.14 8/ 412
`CREDIT LINE BALANCE
`/
`MINIMUM PAYMENT:
`$24.00 4,"
`TOTAL MINIMuM PAYMENT DUE:
`
`$45.14 <—\. \
`10/1/97
`408
`
`PAYMENT DUE‘.
`
`CUSTOMER: BILL SMITH
`ACCOUNT NUMBER: 1111-1111-1111-1111
`
`YOUR CHARGES THIS PERIOD:
`
`402
`
`128003
`
`128116
`
`8I21I97 SHOP RITE -
`
`MIsC. GROCERIES
`
`$32.81 4* 404
`
`8I22I97 EXXON
`
`GASOLINE
`
`130456-8-1
`
`8I28l97 FINANCE PLAN
`
`TELEVISION 456
`PAYMENT 1/24
`
`$12.92 <P /
`406
`/
`$21.14 <»
`
`TOTAL
`
`$66.87
`
`FIG. 12
`
`MasterCard, Exh. 1010, p. 20
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 18 of 20
`
`6,064,987
`
`TRANSMIT INSTALLMENT
`
`PLANS AND CORRESPONDING
`
`REBATE TO POS TERMINAL
`
`PURCHASER SELECTS AN
`
`INSTALLMENT PLAN AND
`
`CORRESPONDING REBATE
`
`DECREMENT PURCHASE PRICE
`
`BY CORRESPONDING REBATE
`
`AUTHORIZE USE OF THE SELECTED
`
`INSTALLMENT PLAN TO REPAY THE
`
`DECREMENTED PURCHASE PRICE 428
`
`MasterCard, Exh. 1010, p. 21
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 19 of 20
`
`6,064,987
`
`POS TERMINAL DETERMINES
`AN UPSELL TO OFFER BASED
`ON PURCHASE PRICE
`
`RECEIVE INSTALLMENT PLANS
`
`FOR EACH INSTALLMENT PLAN.
`DISPLAY INSTALLMENT AMOUNTS
`
`FOR (i) PURCHASE AND (ii) PURCHASE
`AND UPSELL COMBINATION
`
`PURCHASER SELECTS AN
`INSTALLMENT PLAN AND WHETHER
`AN UPSELL IS DESIRED
`
`UPSELL
`DESIRED?
`
`£9
`
`INCREASE PURCHASE PRICE
`BY UPSELL PRICE
`
`AUTHORIZE USE OF SELECTED
`INSTALLMENT PLAN TO REPAY
`
`PURCHASE PRICE
`
`454
`
`MasterCard, Exh. 1010, p. 22
`
`

`
`U.S. Patent
`
`May 16, 2000
`
`Sheet 20 of 20
`
`6,064,987
`
`RECEIVE INSTALLMENT PAYMENT
`
`INCREASE FREQUENT F LYER
`REWARD BASED ON NUMBER
`OF PAYMENTS MADE
`
`PURCHASER
`DESIRES REWARD
`NOW?
`@
`
`PAYMENTS
`REMAINING?
`
`fl
`
`ISSUE REWARD
`
`ISSUE REWARD
`
`REDUCE REWARD DUE TO ZERO
`
`MasterCard, Exh. 1010, p. 23
`
`

`
`6,064,987
`
`1
`METHOD AND APPARATUS FOR
`PROVIDING AND PROCESSING
`INSTALLMENT PLANS AT A TERMINAL
`
`The present application is a continuation-in-part of
`co-pending patent application Ser. No. 08/920,116, entitled
`“METHOD AND SYSTEM FOR PROCESSING SUPPLE-
`MENTARY PRODUCT SALES AT A POINT-OF-SALE
`TERMINAL”, filed on Aug. 26, 1997 which is now pending,
`a continuation—in—part of patent application Ser. No. 08/822,
`709, entitled “SYSTEM AND METHOD FOR PERFORM-
`ING LOTTERY TICKET TRANSACTIONS UTILIZING
`POINT—OF—SALE TERMINALS”, filed on Mar. 21, 1997
`now pending.
`
`FIELD OF THE INVENTION
`
`The present invention relates to methods and apparatus
`for providing and processing installment plan options.
`BACKGROUND OF THE INVENTION
`
`Many purchasers are often unable or unwilling to pay for
`a desired purchase. The purchase may be, for example, a
`single high-priced item or a number of lower-priced items
`that together have a high purchase price. Unfortunately, the
`purchase price may be more than the purchaser is able or
`willing to spend at the time of sale.
`Credit card accounts can allow greater flexibility in pay-
`ing for purchases. When a purchase is paid for with a credi
`card,
`the purchaser need not
`tender cash or otherwise
`immediately forego money. Instead, the purchaser must pay
`the issuer of the credit card account within a predeterminec
`period of time. Credit card accounts thereby allow purchas-
`ers to incur costs greater than those they are able to pay a
`the time of sale.
`
`Costs that are “charged” (paid for using a credit car
`account) are added to a “balance” of the account. The
`purchaser may pay the balance with a single payment or in
`several smaller payments made over a period of time. Many
`purchasers prefer paying several smaller payments, insteac
`of a single,
`larger payment.
`In return for allowing the
`purchaser to pay over a period of time, the issuer imposes
`interest on the balance. Typically, the balance is incrementec
`by a predetermined interest rate at regular intervals, such as
`each month. In summary, payment amounts are subtractec
`from the balance, while interest and additional charged costs ,
`are added to the balance.
`
`_
`
`Each credit card account typically has a balance limit tha
`is set by the issuer in order to deter or prevent a purchaser
`from incurring an unduly high balance. Exceeding the
`balance limit may not be allowed, or may impose a sub-
`stantial penalty fee. Without such a balance limit, a pur-
`chaser may charge so many costs that the balance becomes
`unduly high. Consequently, the purchaser may not be able or
`willing to pay for the balance, and thus the issuer will not
`receive payments that are due.
`The restrictions imposed by the balance limit are another
`reason why many purchasers are often unable or unwilling
`to pay for a desired purchase. Many purchasers are reluctant
`to maintain a balance that is near the balance limit, for fear
`of exceeding the balance limit. In addition, the purchaser
`may worry that a necessary but unanticipated purchase may
`not be allowed. For example, if a credit card account has a
`balance limit of $5,000 and a balance of $4,500, an “emer-
`gency” purchase of $1000 may not be allowed if exceeding
`the balance limit is forbidden.
`
`Some sellers allow selected items to be paid for in a
`number of periodic payments (“installments”), rather than in
`
`2
`one payment at the time of sale, as is more common. In
`return, the seller typically imposes a rate of interest on the
`purchase price, and interest thereby forms a part of each
`installment payment. For example, a seller may allow pur-
`chasers to pay for a $100 item with three instalhnents of $35
`per month. The seller receives 3><$35=$105 after the three
`instalhnents are paid, which represents the $100 purchase
`price and $5 interest. Such smaller periodic payments are
`preferable to many purchasers, who may not be able to pay
`a single large payment.
`Unfortunately, such installment-type payment plans
`(“installment plans”) suffer from several drawbacks. For
`example, a seller must be assured that a purchaser is
`financially reliable, otherwise one or more installments may
`not be received. Therefore, the purchaser typically must
`obtain and complete a credit application, undergo a credit
`check and await credit approval, which is annoying and
`inconvenient to the purchaser.
`The seller is likewise inconvenienced by establishing such
`instalhnent plans, processing credit applications, policing
`nonpayment of installments and incurring various other
`expenses. It is inconvenient to bill each month, and eco-
`nomically unfeasible to bill each month for small amounts.
`In addition,
`it is dillicult for a seller to collect bad debt
`(unpaid installments), especially since most sellers are not
`accustomed to collecting bad debt.
`Overall, such installment plans can be expensive for the
`seller and annoying to the purchaser. Consequently, not all
`sellers allow installment payments, and those that do typi-
`cally allow installment payments only for a limited selection
`of high-priced items, rather than for each item. Sellers rarely,
`if ever, allow installment payments on lower-priced pur-
`chases since the benefits to the seller are believed to be
`outweighed by the costs.
`Banco Bilbao Vizcayo (“BBV”) is a credit card issuer that
`allows some purchasers to pay their account balances in
`installments. A purchaser negotiates via telephone with a
`BBV representative to establish an acceptable installment
`plan, if possible, at a time after purchases are paid for. Since
`the installment plan is established after purchases are paid
`for, the purchaser does not know at the time of sale whether
`instalhnent payments will even be allowed. In addition, the
`purchaser does not know at the time of sale what interest rate
`will be applied if installment payments are allowed.
`Consequently, at the time of sale the purchaser may not be
`able to determine whether the purchase price is acceptable,
`even with an installment plan. In summary, negotiating with
`BBV to pay for an existing balance in installments cannot
`permit purchasers to make inform ed purchasing decisions at
`the time of sale.
`
`Many banks provide loans, wherein the loan may be used
`to pay for various purchases. Such loans are typically repaid
`in fixed installments. Unfortunately, requesting and obtain-
`ing such loans is expensive and tirne—consuming, and loans
`may not be dispensed frequently. In addition, interest accu-
`mulates on the entire loan amount, so it is not efficient to use
`such loans to pay for frequent and varying purchases.
`Some credit card issuers offer pre-approved loans in
`which installment payments of the loan are applied to the
`credit card account balance. Such pre-approved loans are
`typically offered only to purchasers with strong credit his-
`tories. In addition,
`the offered loan is typically a large
`amount of money, such as thousands of dollars. Thus, as
`described above, it is not efficient to use such loans to pay
`for frequent and varying purchases. Accordingly, the use-
`fulness of such a loan is limited for smaller purchase prices.
`
`MasterCard, Exh. 1010, p. 24
`
`

`
`6,064,987
`
`3
`It would be advantageous to provide a method and
`apparatus that allowed purchasers to pay for a variety of
`purchases in installments. Such a method and apparatus
`would ideally overcome the drawbacks of known install-
`ment plans.
`
`SUMMARY OF THE INVENTION
`
`It is an object of the present invention to provide methods
`and apparatus for allowing purchasers to select an install-
`ment plan for purchases at a time of sale.
`In accordance with the present invention, a central con-
`troller receives from a POS terminal a purchase price and a
`financial account identifier. The financial account identifier
`specifies a financial account, such as a credit card account.
`The central controller, in t11rn, generates one or more install-
`ment plan identifiers indicating installment plans for pay-
`ment of the purchase price. The installment plan identifiers
`are based on the purchase price and/or the financial account
`identifier. For example, certain accounts or certain high
`purchase prices may merit preferred installment plans. The
`installment plan identifiers are transmitted to the POS ter-
`minal.
`
`A purchaser at the POS terminal selects whether he would
`like to pay for his purchase in installments and, if so, using
`which installment plan. The POS terminal generates a selec-
`tion signal
`indicative of whether to accept any of the
`installment plans. In other words, the selection signal indi-
`cates a selected one of the installments plans (if the pur-
`chaser desires to pay in installments) or that no installment
`plan was selected. The POS terminal then transmits the
`selection signal to the central controller.
`The central controller receives the selection signal. If the
`selection signal indicates acceptance of any installment plan,
`use of the accepted installment plan for the financial account
`is authorized. Thereafter, bills are generated which reflect
`installment charges to be paid. Thus, the purchaser may
`afford more purchases than otherwise possible, and may
`utilize such installment payments for purchases bought at
`many sellers.
`DRIEF DESCIRIPTION OF TIIE DRAWINGS
`
`FIG. 1 is a schematic illustration of an apparatus for
`providing installment plan options provided in accordance
`with the present invention.
`FIG. 2 is a schematic illustration of a store of the
`apparatus of FIG. 1.
`FIG. 3 is a schematic illustration of a POS terminal of the
`store of FIG. 2.
`FIG. 4 is a schematic illustration of a central controller of
`FIG. 1.
`
`FIG. 5A is a schematic illustration of a purchaser database
`of the central controller of FIG. 4.
`FIG. SB is a schematic illustration of a transaction data-
`base of the central controller of FIG. 4.
`
`FIG. SC is a schematic illustration of an installment plan
`database of the central controller of FIG. 4.
`FIG. SD is a schematic illustration of a record of a
`purchaser billing database of the central controller of FIG. 4.
`FIG. SE is a schematic illustration of an installment
`payments database of the central controller of FIG. 4.
`FIG. SF is a schematic illustration of a merchant database
`of the central controller of FIG. 4.
`
`FIG. 6 is a schematic illustration of exemplary records of
`the databases of FIGS. SA through SF.
`
`4
`FIG. 7 is a flowchart illustrating a process for allowing a
`purchaser to select an installment plan.
`FIG. 8 is a flowchart illustrating steps of the process of
`FIG. 7 that are performed by a POS terminal.
`FIG. 9 is a flowchart illustrating steps of the process of
`FIG. 7 that are performed by a central controller.
`FIG. 10 is a flowchart illustrating a process for determin-
`ing one or more installment plans to offer a purchaser.
`FIG. 11 is a schematic illustration of a card reader of a
`POS terminal.
`
`FIG. 12 is an exemplary bill generated in accordance with
`the present invention.
`FIG. 13 is a flowchart illustrating a process for determin-
`ing and otfering a rebate to a purchaser.
`FIG. 14 is a flowchart illustrating a process for determin-
`ing and offering an upsell to a purchaser.
`FIG. 15 is a flowchart illustrating a process for providing
`frequent flyer miles to a purchaser paying in installments.
`DETAILED DESCRIPTION OF THE
`l’Rl:‘l-ERRED EMBODIMENTS
`
`The present invention provides a purchaser at a point-of-
`sale terminal with options for paying for a purchase. The
`purchaser selects between
`charging the entire purchase
`price at the time of sale, as is common; and (ii) charging a
`number of installments at periodic intervals. Thus,
`the
`present invention allows credit card users to choose install-
`ment plans at the time of sale, thereby allowing purchasers
`to pay for many more purchases without exceeding the
`corresponding balance limit. Even after making high—priced
`purchases, a balance limit is not reached as easily, and thus
`much more credit remains available. Purchasers may even
`be able to pay for high—priced purchases that would have
`otherwise been unaffordable.
`
`The credit card issuer or credit card clearinghouse typi-
`cally provides and manages such installment plans, so
`sellers need not incur any charges associated with establish-
`ing and administering installment plans. Yet, purchasers may
`take advantage of installment plans at any seller that allows
`credit card purchases, and are not limited to selected items.
`Thus, the seller receives additional cash flow from selling
`additional items, and replacement inventory may be quickly
`acquired.
`When establishing a credit card account for a purchaser,
`the issuer typically performs a credit check to determine a
`score indicating the purchaser’s “credit worthiness.” The
`balance limit is then set according to the credit worthiness,
`and may be adjusted thereafter. The credit card issuer thus
`already l1as credit information for the purchaser, and has
`presumably employed that information in
`granting the
`credit card account to the purchaser, (ii) setting the account
`balance limit, and/or (iii) setting an interest rate of the
`account. Thus, in the present invention no additional costs
`need be incurred in reevaluating the credit worthiness of the
`purchaser.
`Further, the pre