United States Patent [191
`Anderson
`
`[73] Assignee:
`
`[54] SYSTEM AND METHOD FOR PAYING
`BILLS ELECT RONICALLY
`[75] Inventor:
`Milton M. Anderson, Fair Haven,
`NJ.
`Bell Communications Research, Inc.,
`Livingston, NJ.
`955,087
`Oct. 1, 1992
`
`[21]
`[22]
`[5 ll
`[52]
`[58]
`
`[56]
`
`Appl. No.:
`Filed:
`
`1111. (:1.5 . . . . .
`
`. . . . . . . . .. H04K 1/00
`
`US. Cl. ........................................ .. 380/24; 330/9;
`235/379; 235/331; 379/91; 379/93
`Field of Search .................... .. 380/9, 24; 235/379,
`235/331; 379/91, 93
`References Cited
`U.S. PATENT DOCUMENTS
`
`3,956,615 5/1976 Anderson et al. .................. .. 380/24
`
`4,317,957 3/1982 Sendrow . . . . . . . . . . . . . .
`
`. . . .. 380/24
`
`380/24
`5,007,084 4/1991 Matema et al. ..
`5,220,501 6/1993 Lawlor et a1. .................... .. 364/408
`
`OTHER PUBLICATIONS
`European Electronic Overview, Linda K. S. Moore, Con
`sumer Bill Payments Update ’92, Apr. 22, 1992.
`Consumer Bill Payments “Front End” Overview. George
`C. White, Consumer Bill Payments Update ’92, Apr. 22,
`1992.
`Bill & Pay Minitel, Dr. Denis Manelski, Consumer Bill
`Payments Update ’92, Apr. 22, 1992.
`TVAnswer Bill Paying, Daniel M. Pence, Consumer Bill
`Payments Update ’92, Apr. 22, 1992.
`ScanFone by US Order, John C. Backus Consumer Bill
`Payments Update, Apr. 22, 1992.
`Screenphone toAT M Networks, Online Resources, Paul J.
`Mila Consumer Bill Payments Update, Apr. 22, 1992.
`“Back End” Options to Merchants, Dennis J. Pope Con
`sumer Bill Payments Update, Apr. 22, 1992.
`Bill Payment Initiation from Retail Stores, George C.
`White Consumer Bill Payments Update, Apr. 22, 1992.
`
`m
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`005283829A
`Patent Number:
`Date of Patent:
`
`[11]
`[45]
`
`5,283,829
`Feb. 1, 1994
`
`Bill Payment Consolidation Service, Glen P. Sgambati,
`Consumer Bill Payments Update ’92, Apr. 22, 1992.
`Citibank Enhanced Telephone, Victor Passaro Con
`sumer Bill Payment Update ’92, Apr. 21, 1992.
`Electronic Payments Commentary, George C. White,
`Journal of Cash Management, Sep./Oct. 1990.
`“I Threw Away My Checkbook”, Chris Shipley, PC
`Computing, Nov. 1990.
`'
`How to Construct Random Permutations from Pseudo
`Random Functions, M. Luby and C. Rackoff, SIAM J.
`Comput., 17(2), 373-386, 1988.
`A New Class of Check-Digit Methods for Arbitrary Num
`ber Systems, IEEE Trans. on Information Theory,
`IT-3lzl-2-l05, Jan. 1985.
`‘Data Encryption Standard, The National Bureau of
`Standards Jan. 1977, US. Department of Commerce
`FIPS pub. 46.
`Primary Examiner-David C. Cain
`Attorney, Agent, or Firm-Leonard Charles Suchyta;
`Loria B. Yeadon
`ABSTRACT
`[57]
`An electronic bill payment system and method include
`billing equipment for creating approval records and
`generating approval numbers for each pre-authorized
`subscriber. The system also includes an interactive pay
`ment approval apparatus into which subscribers dial to
`approve payment and which determines, based upon
`information collected, whether to initiate electronic
`funds transfer. An approval record data base and a call
`history log data base are also part of the bill payment
`system. To approve electronic bill payment a sub
`scriber, once pre-authorized, need only dial up the pay
`ment approval apparatus and enter the assigned ap
`proval number. A series of security checks and compar
`isons are performed to guard against accidental and
`malicious entry of approval numbers. Once all security
`checks are cleared, a confirmation number is announced
`to the subscriber, and, an electronic funds transfer is
`initiated.
`
`19 Claims, 12 Drawing Sheets
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`MasterCard, Exh. 1011, p. 1
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`

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`US. Patent
`
`Feb. 1, 1994
`
`Sheet 1 of 12
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`5,283,829
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`MasterCard, Exh. 1011, p. 2
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`US. Patent
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`MasterCard, Exh. 1011, p. 3
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`

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`US. Patent
`
`Feb. 1, 1994
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`Sheet 3 of 12
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`

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`US. Patent
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`MasterCard, Exh. 1011, p. 5
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`

`

`US. Patent
`
`Feb. 1, 1994
`
`Sheet 5 of 12
`
`5,283,829
`
`800
`\ NOTIFY SUBSCRIBER OF BILLING CHARGES
`
`FIG. 4A
`
`B10
`
`IS
`SUBSCRIBER
`PRE-AUTHORIZEO?
`
`640
`\
`
`A
`GENERATE APPROVAL NUMBER
`IO BE INCLUDED IN
`PRE-AUTHORIZED SUBSCRIBER'S
`BILLING BIAIENENI
`
`BR
`
`-
`SUBSCRIBER OIALs INIO
`PAYMENT APPROVAL APPARAIus
`AND IS PROMPTED TO ENTER
`APPROvAL NUMBER
`‘
`
`870
`
`IS
`THE APPROVAL
`NUMBTEOR PS[_:PHEMCIITAL‘LRYHOCROOEO
`DETECTION?
`
`820 \
`INCLUDE IN A BILLING STATEMENT
`A PRE-AUTHORIZATION FORM
`
`830
`\
`ELEcIRONIc BILL PAYMENT
`PHIVILEBES NOT AVAILABLE
`
`Go To END
`
`B50 \
`MAKE INOOIRY
`IO BILLING OFFICE
`B55 \
`PBIRBEPAIP"
`AVAILABLE
`
`860
`
`‘( GUTOEND )
`
`ERROR DETECTION PERFORMED
`0N APPROVAL NUMBER
`
`MasterCard, Exh. 1011, p. 6
`
`

`

`US. Patent
`
`Feb. 1, 1994
`
`Sheet 6 of 12
`
`5,283,829
`
`FIG. 4B
`
`880
`
`.
`
`'
`
`H ENTERED
`L COMPARE APPROVAL
`E APPROVAL
`THE SUBSCRIBER
`CORRESPON NG
`
`890
`k OETECT THE ANI NUMBER (1 .8. THE
`TELEPHONE NUMBER FROM
`THE SUBSCRIBER IS OIA
`
`892
`k COMPARE THE nETEcTEn
`TELEPHONE NUMBER AGAINST
`THE SUBSCRIBEH'S LOTS OF
`TELEPHONE NUMBERS FROM MHICH
`APPROVAL TRANSACTIONS MERE
`PREVIOUSLY COMPLETED
`
`895
`L ANNOUNCE CONFIRMATION NUMBER
`TO THE SUBSCRIBER ANO INITIATE
`ELECTRONIC FUNDS TRANSFER
`
`B97
`
`(
`
`ENO
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`ABORT
`APPROV
`TRANSAC
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`MasterCard, Exh. 1011, p. 7
`
`

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`US. Patent
`
`Feb. 1, 1994
`
`Sheet 7 of 12
`
`5,283,829
`
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`
`MasterCard, Exh. 1011, p. 8
`
`

`

`U.S. Patent
`
`Feb. 1, 1994
`
`Sheet 8 of 12
`
`5,283,829
`
`FIG. 6
`
`821
`
`PRE-AUTHORIZATION
`TRANSACTION
`sTART
`
`B221 PROCESS INFORMATION FROM
`PRE-AUTRRRTZATTRN FORM
`l
`823
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`REcpRR
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`824
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`0F PRE~AuTR0RTzAT1oR
`
`B25
`
`_
`
`\ NOTIFY HUFI OF
`THE PRE-AUTHORI ZATION
`
`MasterCard, Exh. 1011, p. 9
`
`

`

`US. Patent
`
`Feb. 1, 1994
`
`Sheet 9 of 12
`
`5,283,829
`
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`MasterCard, Exh. 1011, p. 10
`
`MasterCard, Exh. 1011, p. 10
`
`

`

`US. Patent
`
`Feb. 1, 1994
`
`Sheet 10 of 12
`
`5,283,829
`
`FIG. 8
`
`APPROVAL NUMBER
`GENERATION START
`
`1002
`\ conpness 13-01mm ACCOUNT
`NUMBER TO A IE-DIOIT NUMBER
`
`1004\
`
`1
`
`TRANSLATE IE-DIGIT NUMBER TO
`BINARY YIELDINO THE CLEAR CODE
`
`T
`
`1005\
`
`APPLY A HASH FUNCTION TO THE
`CLEAR CODE YIELOING A
`40-BIT NUMBER
`
`1
`
`COMPOSE A B-BIT MONTH
`CODE AND CONCATENATED TO
`40~BIT NUMBER YIELOING A
`43-BIT TIMED HASHED CODE
`
`1
`
`101°\ THANSLATE TIHED HASHED CODE INTO
`A 13-OIGIT DECIMAL NUMBER AND
`ADD 1O12 YIELDING A 13-DIGIT
`NUMBER CALLED APPROVAL INFORMATION
`
`1
`
`101E\
`CONCATENATE A SINGLE CHECKSUM DIGIT
`TO THE APPROVAL INFORMATION YIELDING
`
`14-OIGIT APPROVAL NUMBER @
`
`MasterCard, Exh. 1011, p. 11
`
`

`

`US. Patent
`
`Feb. 1, 1994
`
`Sheet 11 of 12
`
`5,283,829
`
`APPROVAL NUMBER
`ERRDR DETECTION AND
`DECODING START
`
`FIG. 9A
`
`1102'\- APPROVAL NUMBER ENTERED BY
`THE SUBSCRIBER 1s DETECTED
`
`1104~\\_
`
`CHECKSUM COMPUTED TO
`CHECK FDR ERROR DUE TO
`SINGLE SUBSTITUTIUNS ANO
`THANSPDSITIDNS
`
`1106
`
`ERROR?
`
`YES
`
`J
`
`ND
`
`11°8‘\\_ CHECK FOR LEADING
`ZERO ERROR
`
`1110
`
`ERROR?
`
`YES
`
`:
`
`ND
`
`1112
`_\\~
`
`SUBTRACT 1012 FROM THE
`ENTERED APPROVAL NUMBER
`
`1
`1114'\\_ TRANSLATE T0 BINARY
`
`1118
`_\\‘
`
`PAD HITH
`PREFIXING ZEROS
`
`-
`
`( 60 TO B )
`
`MasterCard, Exh. 1011, p. 12
`
`

`

`US. Patent
`
`Feb.'1, 1994
`
`Sheet 12 of 12
`
`5,283,829
`
`FIG._9B
`
`11122
`_
`'
`STRIP 3 MOST SIGNIFICANT
`BITS REPRESENTING THE MONTH CODE
`
`1
`
`1124
`APPLY INVERSE HASH FUNCTION /
`YIELDING ms CLEAR CODE
`
`GENERATE CONFIRMATION NUMBER
`
`1125 J
`
`1128
`TRANSLATE CLEAR /
`CODE TO DECIMAL
`
`DECOMPRESS RESULTING NUMBER YIELDING
`THE SUBSCRIBER'S ACCOUNT NUMBER
`
`1134
`
`ACCOUNT
`CODE SYNTACTICALLY
`CORRECT AND DOES IT
`CORRESPOND TO A
`PRE-AUTHORIZING
`SUBSCRIBER?
`
`APPROVAL NUMBER VALID
`
`END
`
`MasterCard, Exh. 1011, p. 13
`
`

`

`1
`
`5,283,829
`
`SYSTEM AND METHOD FOR PAYING BILLS
`ELECT RONICALLY
`
`FIELD OF INVENTION
`This invention relates to a system and method for
`paying bills, such as telephone bills, via electronic funds
`transfer.
`
`2
`prior to payment being made. Another drawback is that
`conventional electronic bill payment options are some
`what restrictive in that subscribers have no ?exibility to
`pay the bill on a date other than that pre-speci?ed at the
`time that automatic funds transfer is established.
`Other establishments have developed bill paying
`schemes which require the subscriber to subscribe to a
`special communications or home banking network and
`/or purchase special hardware in order to pay bills
`electronically. Excel home banking system, a product
`of Hanover Trust, Prodigy consumer service, which is
`jointly owned by IBM and Sears, and CheckFree, a PC
`based bill paying service of CheckFree Corporation, to
`name a few, offer bill paying schemes via a specialized
`network service. In addition, these schemes may require
`the subscriber to purchase a computer (terminal or PC),
`to purchase special software, and to be a pro?cient
`computer user. Other consumer electronic bill payment
`alternatives, which employs special hardware, include:
`a Home Transaction System by U.S. Order, which uses
`a ScanFone; Online Banker service by Online Re
`sources and Communications Corp. which uses a
`Screen Phone; CitiOne Bill Payment Services by Citi
`Bank which uses an enhanced telephone; Bill and Pay
`System offered by Minitel, a subsidiary of France Tele
`com, which requires a Minitel unit or a PC; and TV
`Answer Communications network service which uses a
`TV answer home unit. These pre-requisites to many
`electronic bill payment alternatives, such as access to
`specialized networks, special hardware and software,
`and special computer skills, discourage subscribers from
`changing from their conventional bill payment methods
`of writing checks.
`Furthermore, many of these proposed bill payment
`systems are driven by customer interaction with exten
`sive and complicated menus, which are perceived by
`many subscribers to be too complex and cumbersome
`for practical use. Conventional systems also require the
`subscriber to input highly sensitive and personal infor
`mation (such as bank account numbers) in order to
`effect bill payment. Subscribers are particularly appre
`hensive to disclose such sensitive information since
`subscribers generally perceive most bill payment sys
`tems to be insecure and vulnerable to improprieties.
`Subscribers’ perceptions, in many cases, are justi?ed
`given the susceptibility of the communications link
`between a subscriber’s telephone and the payment sys
`tem to eavesdropping and tapping and the vulnerability
`of computer systems to hackers. As a result, subscribers
`are hesitant and reluctant to transact bill payments using
`these electronic systems.
`
`10
`
`25
`
`40
`
`45
`
`BACKGROUND OF THE INVENTION
`Subscribers of utilities are typically billed monthly
`for usage during the preceding month. Subscribers are
`sent, via regular mail, a written billing statement, which
`itemizes the services being provided and associated
`costs. Speci?cally, billing statements for telephone ser
`vices indicate the type of standard services being ren
`dered, special features subscribed to, toll usage during
`the month, as well as state and federal taxes, mainte
`nance fees and applicable access and line charges. In
`addition, the billing statement informs the subscriber of
`the deadline for payment to avoid service charges and
`to assure uninterrupted service.
`Upon reviewing the charges and verifying that billing
`is correct, subscribers typically write a check for the
`billed amount and return the check along with an ap
`propriate page of the billing statement to the telephone
`service provider via regular mail. Rarely do billing
`questions arise which would necessitate that the sub
`scriber make personal contact with the telephone busi
`ness office. Some subscribers, particularly those who
`make payment on or about the payment deadline, must
`visit the billing office to ensure payment credit by the
`payment deadline.
`The cost to the subscriber who remits payment via
`check through the regular mail is twenty-nine to about
`?fty-nine cents (twenty-nine cents for standard postage
`and up to about thirty cents for the blank check and per
`item bank charges). For near-deadline remitters, the
`cost to make payment will include travel expenses to
`the business office, any time lost from work, and the
`hassle of long lines at business of?ces that may result
`around billing deadlines. The administrative cost to the
`telephone company in facilitating these methods of bill
`payment can be measured in terms of the personnel
`hired to physically open payment envelopes and manu
`ally enter subscriber’s payment into the billing equip
`ment and extra personnel needed to assist the volume of
`subscribers who make payment in person at the last
`minute.
`The administrative costs to banking institutions of
`50
`subscribers paying by check can be measured in terms
`of the cost of depositing and clearing checks. Banking
`institutions also incur the cost of micro?lming and re
`turning cancelled checks to subscribers. Some of these
`bank costs may be recovered by charging a per item
`deposit fee to the utility company, increasing its costs.
`To obviate the expense and hassle of paying bills via
`check and regular mail, various establishments offer the
`option to subscribers of having their bill automatically
`paid via automatic funds transfer. This bill payment
`60
`option has proven quite sensible and useful for paying
`bills that are for the same monthly amount (such as car
`notes, insurance premiums, mortgages, etc.); however,
`for bills that vary based upon customer usage or from
`period to period, this option is undesirable because the
`subscriber is not aware of the billing amount prior to
`automatic payment. More importantly, the subscriber
`has no opportunity to review and approve the charges
`
`55
`
`65
`
`SUMMARY OF THE INVENTION
`Therefore, an object of my invention is an electronic
`bill payment system and method for paying bills, such as
`telephone bills, via electronic funds transfer. Thus, my
`bill payment system and method obviate the hassle and
`expense of remitting payment via regular mail and the
`inconveniences associated with making payment in
`person and on or about the payment deadline. My in
`ventive system and method allow subscribers to review
`and approve bill payment prior to an electronic transfer
`of funds being effected and to control the timing of the
`payment. In addition, my inventive system and method
`minimize security risks associated with conventional
`electronic bill payment options by assigning a unique
`approval number to each subscriber’s current bill,
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`MasterCard, Exh. 1011, p. 14
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`subscriber to use, requiring no special hardware, soft
`ware, or computer pro?ciency as do other proposed bill
`payment alternatives. No personal identi?cation num
`bers or passwords need be remembered, and no com
`plex menus and decision trees need be worked through
`to effect electronic bill payment.
`
`BRIEF DESCRIPTION OF THE DRAWING
`FIG. 1 is a schematic representation of an illustrative
`embodiment of my system for paying bills electronically
`in accordance with an aspect of my invention.
`FIG. 2 is a schematic representation of illustrative
`billing equipment in accordance with an aspect of my
`invention for the embodiment of FIG. 1.
`FIGS. 3A and 3B are schematic representations of
`illustrative payment approval apparati in accordance
`with an aspect of my invention for the embodiment of
`FIG. 1.
`FIGS. 4A and 4B depict a ?ow diagram of my inven
`tive electronic bill payment method in accordance with
`an illustrative embodiment of my invention.
`FIG. 5 depicts a sample of a pre-printed pre-authori
`zation form to be completed by subscribers to pre
`authorize electronic funds transfer for payment of fu
`ture bills.
`FIG. 6 depicts a ?ow diagram of a pre-authorization
`transaction in accordance with an aspect of my inven
`tion.
`FIG. 7 depicts an example of the notice and instruc
`tions to be included in the billing statement of the pre
`authorized subscriber.
`FIG. 8 depicts a flow diagram of a method for gener
`ating approval numbers based upon a subscriber’s ac
`count number in accordance with an aspect of my in
`ventton.
`FIGS. 9A and 9B depict a flow diagram of a method
`for detecting errors and decoding an approval number
`in accordance with an embodiment of my invention.
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`which can be used by the subscriber to effect approval
`of electronic payment.
`.
`My inventive system for approving electronic bill
`payment includes billing equipment which prepares
`billing statements for subscribers, creates an approval
`record for each subscriber pre-authorized for electronic
`payment, and assigns an approval number, which
`uniquelyidenti?es each pre-authorized subscriber’s bill.
`My inventive system also includes an interactive pay
`ment approval apparatus which serves as subscribers’
`interface to the bill payment system and processes sub
`scribers’ requests for approving electronic bill payment.
`The payment approval apparatus processes the ap
`proval numbers entered by the subscriber during an
`approval transaction, queries the approval record data
`base to verify the validity of the approval number en
`tered by subscribers, and performs other security
`checks, if necessary. The payment approval apparatus
`may also include error detection to guard against acci
`dental or malicious entry of approval numbers which
`might otherwise trigger payment of another subscrib
`er’s telephone bill.
`The inventive bill approval and payment method of
`my invention includes processing the subscriber’s pre
`authorization form to electronically pay the current bill
`via electronic funds transfer subject to the subscriber’s
`approval of the current billing statement. This process
`entails receiving the subscriber’s accounting and bank
`ing information and other pre-requisite information.
`Once pre-authorization is completed, an approval re
`cord is created, and an approval number is generated
`for each pre-authorized subscriber and printed on the
`subscriber’s billing statement. If the subscriber wishes to
`approve the current bill for electronic payment, the
`subscriber need only dial into the payment approval
`apparatus as instructed on the billing statement and
`enter the approval number using the tone dialing key
`pad of the telephone instrument.
`The interactive payment approval apparatus checks
`the validity of the approval number and queries the
`approval record data base to verify that the approval
`number corresponds to an approval record for a pre
`authorized subscriber. As a security measure, my inven
`tive method could entail comparing the telephone num
`ber from which the subscriber is dialing with a call
`history log of telephone numbers from which the sub
`scriber has previously authorized electronic payment. If
`a match is not found, the interactive payment approval
`apparatus could further prompt the subscriber for addi
`tional information to approve electronic payment or
`terminate the call. Once bill approval is completed, the
`payment approval apparatus relays a message to the
`billing equipment to initiate payment via electronic
`funds transfer from the subscriber’s account to the tele
`phone service provider, and a con?rmation number is
`announced to the subscriber.
`My inventive system and method of electronic bill
`payment are inherently secure since no account num
`bers or payment amounts are entered by the subscriber
`during the payment approval session; therefore, this
`information is not subject to interception or theft during
`the subscriber’s approval transaction. Furthermore, a
`different approval number is generated for each pre
`authorized subscriber and billing period. Also, entry of
`the approval number can only effect payment for the
`speci?c billed amount from the subscriber’s pre-speci
`?ed account to that of the service provider. My inven
`tive system and method are also simple and easy for the
`
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`DETAILED DESCRIPTION
`An aspect of my invention is a system and method for
`paying bills via electronic funds transfer. My electronic
`bill payment system assigns a unique approval number
`to each subscriber’s bill, which number is pre-assigned
`and pre-printed on the subscriber’s billing statement
`mailed to the subscriber for the billing period. Upon
`reviewing the billing statement and being satis?ed that
`all charges are accurate, the subscriber can approve
`electronic payment of the bill by dialing, via the public
`switched network, into the payment approval apparatus
`and entering the assigned approval number.
`My electronic bill payment system and method could
`be suitable for a host of billing applications. For exam
`ple, product and service providers could implement my
`system and method to provide their subscribers with a
`simple and efficient mechanism for remitting payment
`of their bills. For example, public utility companies,
`such as gas, electric, telephone, water, garbage, and
`sewage companies could employ this system and
`method to minimize the cost of bill payment processing.
`In addition, bill payment services, which bill and collect
`payment from subscribers on behalf of a host of product
`and service providers, could also utilize this system and
`method. Generally, this system and method could be
`effectively utilized to approve any electronic funds
`transfer from a subscriber’s account even for making
`periodic contributions to a favorite charity or payments
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`MasterCard, Exh. 1011, p. 15
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`for entertainment books, records, or videos ordered
`subscriber. By employing approval number generator
`from a mail-order entertainment club.
`355 at the payment approval apparatus 300, loose cou
`Clearly, my inventive system and method could be
`pling between the payment approval apparatus 300 and
`gracefully implemented in a number of different appli
`the billing equipment 200 can be tolerated since ap
`cations to facilitate bill payment. For the purpose of a
`proval numbers need not be transferred from the billing
`speci?c illustrative example, my system and method are
`equipment 200 via lead 341 to the approval payment
`discussed in the context of electronic payment of tele
`apparatus 300 during each billing period.
`phone bills.
`The payment approval apparatus includes an interac
`The components of my inventive electronic bill pay
`tive response unit 310, which prompts the calling sub
`ment system 100, as shown in FIG. 1, include billing
`scriber for approval information and detects the sub
`equipment 200, a payment approval apparatus 300, a
`scriber’s response and other information from the public
`call history data base 400 and an approval record data
`switched network interface 150 relating to the call.
`base 500. The billing equipment 200 of my invention
`Upon an approval number being entered by the sub
`functions much like conventional billing equipment
`scriber, the interactive response unit 310 forwards this
`employed by local telephone service providers and
`information to check the validity of the approval num
`long-distance carriers and which maintains records of
`ber. If the approval number has been specially coded
`subscriber’s charges, payments, etc. and prepare billing
`such that single transpositions and substitutions are
`statements. As can be seen in FIG. 1, the subscriber
`detectable, then the approval number is forwarded to an
`accesses the bill payment system 100 from the subscrib
`approval number error detector 350. Furthermore, if
`er’s telephone 11 through the public switched telephone
`the approval number has been generated using an in
`network 150. In addition, the payment approval appara
`vertible hash function, then the approval number is also
`tus 300 can access the service provider’s bank, which is
`decoded at the error detector 350 and checked for va
`known in the banking industry as the originating deposi
`lidity.
`tory ?nancial institution (ODFI) 900. The ODFI 900
`In addition, the approval number and other responses
`can access other utilities such as the automated clearing
`and information collected during the approval transac
`house 600, which links to the subscriber’s banking insti
`tion are forwarded to an appropriate comparator to
`tution known as the receiving depository ?nancial insti
`verify its validity. For example, the approval number
`tution (RDFI) 700.
`entered by the subscriber is forwarded to the approval
`As shown in FIG. 2, the billing equipment of my
`record comparator 320 which compares the approval
`invention also includes a pre-authorization processor
`number entered by the subscriber to the approval num
`210 for processing subscriber’s pre-authorization forms,
`ber associated with each approval record in the ap
`which subscribers complete to be entitled to electronic
`proval record data base 500 via lead 321 (see FIGS. 3A
`bill payment privileges. Pre-authorization information is
`and 3B). The subscriber may be prompted for other
`used by the approval record generator 220 for creating
`information such as the last four digits of his or her bank
`an approval record for each pre-authorized subscriber.
`The billing equipment 200 also includes an approval
`account number as an additional security measure, and
`the subscriber’s response would be compared at the
`number generator 230 which assigns to each subscrib
`approval record comparator 320 with the bank account
`er’s bill a unique approval number, which is pre-printed
`number provided by the subscriber during pre-authori
`in the subscriber’s current billing statement to be used
`zation and stored in the subscriber’s approval record.
`for approving electronic bill payment. A more detailed
`As shown in FIG. 1, my electronic bill payment sys
`discussion of the approval number generator is pro
`vided in the following section. My billing equipment
`tem 100 also includes an approval record data base 500
`and a call history log data base 400. The approval re
`also contains a billing statement generator 240 con
`cord data base 500 stores approval records created at
`nected to both the approval record generator 220 and
`the billing equipment 200 for access by the payment
`the approval number generator 230 and an electronic
`approval apparatus 300. As indicated above, informa
`funds transfer interface 245 for facilitating communica
`tion stored in the subscriber’s approval record may be
`tion between my bill payment system 100 and the ODFI
`900, which orders electronic funds transfers.
`compared with the subscriber’s responses at the ap
`proval record comparator 320 (see FIGS. 3A or 3B).
`Another element of my electronic bill payment sys
`The call history log data base 400 stores telephone
`tem 100 is the payment approval apparatus 300 shown
`numbers from which the subscriber previously ap
`in FIGS. 3A or 3B. This apparatus serves as subscribers’
`interface to the electronic bill payment system 100 for
`proved electronic payment of his or her telephone bill.
`approving electronic payment of their telephone bills.
`A separate log is maintained in the call history log data
`The payment approval apparatus receives approval
`base 400 for each pre-authorized subscriber. The sub
`records for each pre-authorized subscriber via lead 341
`scriber’s log is accessed by the call history comparator
`at the approval controller 340, which controls the stor
`330 via lead 331 (see FIGS. 3A and 3B), and the tele
`age of the approval record in the approval record data
`phone number from which the subscriber is presently
`base 500 via lead 342. Approval numbers for each bill
`dialing is compared against the subscriber’s log of tele
`ing period are similarly stored in the approval record
`phone numbers. The results of the comparison are uti
`database 500.
`lized by an approval controller 340, which controls
`As shown in FIG. 3B, the payment approval appara
`prompts being sent to the subscriber via the interactive
`tus 300 may also include an approval number generator
`response unit 310 during the approval transaction. The
`355 which is separate from approval number generator
`approval controller 340 also signals the billing equip
`230 in the billing equipment 200 shown in FIG. 2. Ap
`ment 200 over lead 341 to initiate electronic funds trans
`proval number generator 355 utilizes the same approval
`fer upon successful completion of the approval transac
`number generating method, described in the following
`tion. Once the approval transaction is completed, the
`section, as approval number generator 230 of FIG. 2, to
`approval controller 340 provides, via lead 343, the call
`yield the same approval number for each pre-authorized
`history log database 400 with the telephone number
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`MasterCard, Exh. 1011, p. 16
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`5,283,829
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`from which the subscriber is dialing for updating the
`subscriber’s call history log.
`A flow diagram of my inventive method for paying
`telephone bills electronically is depicted in FIGS. 4A
`and 4B. As shown in FIG. 4A, the telephone company
`billing equipment 200 noti?es subscribers of billing
`charges (step 800) usually by sending, via regular mail,
`a billing statement itemizing service and usage charges,
`taxes, etc., for the billing period. Alternatively, it is
`conceivable that subscribers could be noti?ed of current
`charges in a manner other than a written billing state
`ment through the mail. For example, technological
`advancements in the communications industry could
`permit an itemized list of current charges to be electron
`ically accessed by subscribers via computer or by dial
`ing up, via the public switched telephony network, an
`interactive data base maintaining billing information.
`For subscribers who have not pre-aut'horized elec
`tronic funds transfer for payment of their telephone bill,
`their billing statement may include a pre-printed pre
`authorization form such as that shown in FIG. 5 (steps
`810 and 820 of FIG. 4A). As shown in FIG. 5, this form
`requests the name and address of the subscriber’s bank
`ing institution, the account number to be debitted, and
`the subscriber’s signature. In addition, the subscriber
`may select payment options such as approving elec
`tr