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`\[lEWDAT
` AND
`VlDEO‘l'EX'l',
`1980-81 ::
` A
`Worldwide
` Report
`
`Transcript of viewdata ’80,
`first world conference A
`on viewdata, videotex, and teletext
`
`Knowledge Industry Publications, Inc.
`White Plains, New York
`
`
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR2016-00753
`Page 1
`Page 1
`
`

`
`Viewdata and Videotext, 1980-81: A Worldwide Report
`
`Transcript of viewdata ’80, first world conference on viewdata, videotex and teletext, London,
`March 26-28, 1980
`
`ISBN 0-914236-77-6
`
`LC: 80-18234
`
`This title is being published simultaneously in the United Kingdom under the title: Videotex, Viewdata
`& Teletext
`
`Copyright ©1980 by Online Conferences Ltd.
`
`Published by Knowledge Industry Publications, Inc. in conjunction with Online Conferences Ltd. No
`part of this book may be reproduced in any form whatsoever without the written permission of the
`publisher, Knowledge Industry Publications, Inc., 2 Corporate Park Drive, White Plains, New ‘York
`10604.
`
`1:..
`
`1
`
`Printed in the United States of America
`
`
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR2016-00753
`Page 2
`Page 2
`
`

`
`iii
`
`Introduction & Preface
`
`The use of theubiquitous TV set as an information display and
`interactive personal electronic communication device will bring
`dramatic changes to 'the way in which we conduct our day—to—day lives.
`The effect will at first be most apparaent in business with the easy
`
`availability of computer-stored information and the ability to send and
`receive mail electronically. The effect will then become apparent in
`
`the home with the TV set gradually enhancing its primary role of
`
`entertainment device to incorporate information acquisition, computer-
`aided education and electronic message transmission.
`
`This book comprises written back-up to the presentations given at
`
`Viewdata '80 — The First World Conference on Viewdata, Videotex and
`Teletext.
`
`To ensure that the preprints are as up-to-date as possible,
`
`the authors
`
`have supplied them to us in camera-ready form which does not allow
`
`for editing and for this reason we would ask for your understanding
`with some of the overseas papers where English is not the author's
`native language.
`In order to keep the book as up—to—date as possible,
`the papers have been printed in random order.
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR2016—00753
`Page 3
`Page 3
`
`

`
`l85
`
`THE ROLE OF VIEWDATA IN ELECTRONIC FUNDS TRANSFER
`
`R F PARK
`
`Senior Consultant
`
`Inter-Bank Research Organisation
`
`Summary
`
`Viewdata could enable banks to communicate with their customers in
`
`new ways, and create opportunities for developing new services. Bank
`customers might be given immediate access to their account
`information and shown balance levels or transactions on their
`accounts since their last statement. Banks could use viewdata to
`
`the regular payments they
`keep their customers better informed about
`make on their behalf.
`The response facility might be used for
`sending messages of instruction to banks - to order cheque books or
`statements,
`to transfer funds or to make payments.
`
`Key issues in all viewdata banking services will be security of
`personal identification, data communication and data storage.
`Personalised banking service will almost certainly be based on
`private bank databases, but could use the Prestel communication
`network if on-line interfaces between Prestel and private systems
`were developed.
`
`The type of services which would be developed will depend largely on
`the sophistication of viewdata systems installed, and so the level
`of security that can be achieved. Services to individuals will be
`constrained by the security that can be achieved by standard Prestel
`sets. Services to businesses could be more extensive if viewdata
`
`terminals in this sector became more sophisticated with local
`intelligence and processing capability.
`
`Goods can already be ordered and paid for through Prestel by using a
`credit card number. Making similar payments from a current account
`using viewdata would require far greater system sophistication to
`achieve the necessary levels of security. It is therefore questionable
`whether such a facility would be economic to develop. However,
`viewdata could be used for settling regular bills where details of who
`is paying whom can be specified in advance,
`thereby greatly
`simplifying the security problems.
`
`Banks would only consider developing viewdata banking services if they
`can be justified economically. Some,
`like regular payments might be
`cost justified against current methods, however giving customers
`better access to the state of their financial affairs will involve a
`real
`increase in service at an additional cost
`to the banks.
`Such
`
`developments will only be justified if customers are prepared to pay
`for this increase in service.
`
`Copyright © l98O by Online Conferences Ltd.
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR201600753
`Page 4
`Page 4
`
`

`
` l86
`
`Electronic Funds Transfer Today
`
`Any discussion of the way we are all moving towards an electronic
`age always seems to be incomplete without
`some mention of the
`electronic transfer of funds - EFTS — and the plastic path to a
`cashless society.
`It must have something to do with the universal
`fascination with money.
`It is not my intention to demolish all the
`myths surrounding the concept of a cashless society other than to
`say that in the United Kingdom 95% of all transactions are still in
`cash, and that about
`two thirds of payments handled by banks are
`still by cheque. Any move away from this domination of cash and
`cheques will be slow, however movement
`there has been, and before
`considering what role viewdata might play,
`I would like to describe
`briefly the position in the UK today.
`
`The pace of change towards electronic payments depends as much on
`the growing sophistication of bank customers as on initiatives taken
`by the banks themselves. Clearly the banks have taken the
`so far
`initiative with most plastic card based services. However,
`the use of cards has not been part of EFTS.
`They either support
`the
`cheque system as with cheque guarantee cards, or lead to the
`generation of paper sales slips as with credit cards.
`Ironically
`use of more sophisticated cards which include a magnetic stripe and
`enable on—line access to the banking system, are used primarily to
`give customers cash, albeit in an automated way through the latest
`generation of cash dispensers.
`
`the electronic transfer of funds has
`In this country at least,
`depended to a great extent on the ability of bank customers to
`handle financial information electronically. All payments passing
`between banks in electronic form are handled by a jointly owned bank
`computer centre at Edgware, Bankers Automated Clearing Services
`(BACS). Over half the payments processed by BACS are received on
`magnetic tapes created and submitted directly by customers. These
`are largely direct debits and payroll credits.
`The remainder of
`electronic payments are largely standing orders where banks submit
`tapes of payments destined for other banks to BACS and process
`internally payments to their own customers.
`
`In this country individuals with bank accounts pay for just over
`half their regular commitments such as mortgages, rates, rent, gas,
`electricity and regular savings by using standing orders or direct
`debits. Nearly all monthly wage and salary payments in the UK are
`processed via BACS, on magnetic tape.
`In all nearly 400 million
`transactions are made each year without use of cash or paper, a
`greater Volume of electronic transactions than achieved by any other
`country, and with not a plastic card in sight.
`
`-»«).,.e.....rw~ma,
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR201600753
`Page 5
`Page 5
`
`

`
`l8?
`
`If that is the current position on electronic payments in this
`country, where does the information technology revolution fit in
`with these developments? In many respects the handling of these
`existing electronic payments mirrors the past
`technological
`capability of
`the more sophisticated bank customers — the ability to
`produce magnetic tapes to be handled in batch mode, a characteristic
`of early computer technology. Developments in information
`technology will be putting a lot more information processing
`capability into the hands of a great many more bank customers.
`Money is just information and as such, its handling will be
`transformed just as will be that of any other form of
`information.
`
`Increasingly customers might wish to communicate directly with their
`banks using telecommunication both for sending messages of
`instruction as well as for receiving financial
`information. Banks
`will be able to link their own systems directly to those of a great
`many of their customers. Automated bank services will have to fit
`in with this new environment and it is here that I think viewdata
`
`could play a part - as a new way for customers to communicate with
`their banks, and as such an adjunct
`to existing individual bank and
`inter~bank systems.
`
`The Issues to be Covered
`
`
`
`Before going any further I must stress that what follows is a
`personal View and a speculative one. Viewdata, if not
`in its
`infancy, at least is not yet beyond the kindergarten, and
`discussions of its use in new areas beyond its first stages of
`development must contain a high degree of speculation.
`In this
`paper I will be describing the sort of bank services which I think
`could be offered via some form of viewdata system.
`I will be
`zonsidering the particular requirements that I think will be
`necessary for personalised banking services, such as security of
`personal identification, and security of information storage and
`transmission, and I will then describe in a bit more detail how a
`viewdata system meeting these requirements might be used for making
`payments.
`
`Obviously viewdata banking services will depend on the take up of
`Prestel and viewdata itself.
`I will,therefore, consider the way the
`market for viewdata banking services might develop in relation to
`the way customers will be investing in their own viewdata
`facilities.
`In all this speculation I have not restricted myself to
`what is currently available solely via Prestel, but anticipated
`certain developments which I see as inevitable, namely the
`increasing sophistication of terminals for business use, and the
`existence of on—line links between Prestel and other databases.
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apmev.PMC
`IPR2016-00753
`|PR201600753
`Page 6
`Page 6
`
`

`
`188
`
`What Sort of Services?
`
`From its inception
`So what sort of services might be developed?
`viewdata has been seen as a computerised information retrieval
`system to be used by anybody, regardless of previous experience of
`direct use of computers. Banks maintain large quantities of
`information on computers about
`the state of their customers‘
`financial affairs, and most customers would not know one end of a
`computer from another. What better than to use viewdata to give
`customers direct access to this information in the privacy and
`comfort of their own homes or businesses.
`
`Keeping Customers Informed
`
`Customers might be given a balance enquiry facility on any of their
`accounts, current, deposit,
`loan or budget for example.
`They might
`like to see details of all transactions on their current account
`
`since receiving their last statement.
`
`Banks make or permit regular payments on their customers behalf with
`standing orders and direct debits. There is a growing trend in the
`use of these payment media for budget payments as people
`increasingly wish to even out their comitments by paying smaller
`amounts more frequently. However,
`from personal experience I find
`it difficult to keep track of all the payment mandates I sign.
`Banks might use viewdata to tell each customer what regular payments
`are made on their behalf each month, and maintain for each customer
`subscribing to the service an additional file showing what other
`regular payments the customer makes month by month throughout
`the
`year to assist in budgeting.
`
`One of the consequences of more use of electronic payments is the
`need to give customers better access to the state of their accounts,
`given that customers may no longer have a paper record of each item.
`The use of viewdata in the ways I have described could be an
`excellent means of achieving this.
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR201600753
`Page 7
`Page 7
`
`

`
`l89
`
`Acting on Customers‘ Instructions
`
`With the response facility, and eventually the ability to transmit
`messages between users, viewdata is very much more than information
`retrieval - it is the basis of an entirely new communication medium.
`If customers were given direct access to the state of their
`financial affairs via viewdata,
`they could well want
`to be able to
`act on that information equally directly. Many bank
`
`services are initiated by messages of instruction to banks from
`their customers:
`
`to order cheque books
`
`t0 request sta tements
`
`to transfer funds
`
`to make payments
`
`-
`
`to order currency and travellers cheques
`
`to set up or change standing order mandates
`
`The viewdata response frame could be a vehicle for these messages of
`instruction. Prestel could probably be used for requesting cheque
`books and statements as they would only be sent
`to the address of
`the terminal if this address tallied with bank records.
`The other
`
`messages of instruction require the bank to debit customers‘
`accounts and to do something with the money - put it into another
`account, pay it to somebody else or buy something with it like
`foreign currency.
`
`This immediately raises some thorny questions - amongst others, what
`constitutes a customer's authority, and how banks will
`identify each
`individual user of viewdata banking services with sufficient
`security. I would therefore like to consider some of the specific
`banking requirements that would have to be met before going on to
`describe a possible viewdata payment service. Firstly, how can
`banks use Prestel at present?
`
`Bank Use of Prestel
`
`the capabilities of Prestel are at present restricted to
`Given that
`generalised information dissemination and very simple message
`transmission, current use by banks and organisations offering
`similar services is limited to general advertising plus detailed
`information about bank services - location of cash dispensers, where
`to use credit cards,
`loan packages available and so on.
`The most
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR201600753
`Page 8
`Page 8
`
`

`
`l9O
`
`interesting use in many ways is the ability to order goods and pay
`by credit card - more about that later.
`
`More personalised services will require a high level of security for
`personal identification, data communication and data storage -
`probably more than is available with Prestel at present. Although
`as I have already mentioned certain simple services such as ordering
`cheque books or statements, could be offered via Prestel as it
`stands, I think the greatest scope for banking services will have to
`come from viewdata systems tailored to meet specific banking
`requirements.
`
`
`Use of a Specialised Banking System
`
`For security reasons alone, banks will wish to maintain full control
`of computer files of confidential customer and account
`information,
`and so will wish to locate them on secure bank premises. Files with
`individual records for each customer are going to be very large.
`These records will have to be stored in highly compressed form, and
`when interogated by a viewdata system,
`they will have to be
`extracted and reformatted as a valid viewdata page.
`
`these reasons viewdata banking services would have to be
`For
`supplied either by a completely private viewdata system provided by
`the bank, and designed to meet its specific needs, or alternatively
`the banks might need switching and translation capability in Prestel
`so that users can gain access to bank files kept on bank premises
`but "transparently".
`The banks would appear to customers just like
`any other Prestel information provider.
`
`One thing is certain, services would have to be within a local
`telephone call distance from customers.
`A system totally private to
`the banks would require them to offer viewdata connections to their
`own telecommunication networks which currently link branches to
`their central computer centres or provide some other national
`network.
`The communications would be parallel to Prestel and might
`look something like Diagram 1.
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR201600753
`Page 9
`Page 9
`
`

`
`l9l
`
`DIAGRAM 1
`
`Banking services via a Private Network
`
`
`
`Prestel
`local
`
`
`coputer
`
`
`
`
`Prestel
`central
`
`
`
`
`computer
`
`bank
`
`network
`
`IJBIRCD
`
`
`
`Prestel
`
`
`
`
`__,-—— local
`computer
`
`
`
`However, it is more likely that banks would wish to separate their
`own telecommunication networks used for internal operational
`purposes from any viewdata system, whose terminal use
`In which
`characteristics would be different from banking terminals.
`case an on-line central link to Prestel would be an alternative, so
`that the Prestel system would be used for the message switching, as
`shown in Diagram 2.
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR2016-00753
`Page 10
`Page 10
`
`

`
` A
`
`l92
`
`DIAGRAM 2
`
`Banking services via a Prestel ‘window’
`
` Prestel
`local
`
`local
`
`
`
`
`
`computer
`
`
`
`
`
`Prestel
`central
`
`compter
`
`IIJBIRCJ
`
`The final choice would obviously depend on the nature and cost of
`future Prestel facilities, and the banks‘
`individual policies for
`their own communication networks. Apart
`from the need for private
`systems with specialised files located on secure premises,
`there are
`questions of personal identification and secure data communications.
`
`Personal Identification
`
`Secure personal identification will be a key issue in developing any
`personalised banking service.
`The various levels of security, both
`in personal identification and data communication will determine the
`nature of the services that will be possible.
`There are at least
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR201600753
`Page 11
`Page 11
`
`

`
`
`
`
`
`193
`
`four levels of security that might be available, namely that offered
`byz-
`
`-
`
`-
`
`—
`
`-
`
`Prestel and a standard Prestel set;
`
`a standard Prestel set linked to a private system;
`
`more sophisticated viewdata terminals with local
`intelligence and processing capability which will be
`used for many purposes, but primarily by businesses;
`
`terminals with specialised banking features such as
`magnetic card reading devices (features not demanded for
`any other uses).
`
`the wider could be the range of
`Clearly the greater the security,
`possible services which could be offered, however,
`the fewer will be
`the terminals and systems with the added security features added.
`Thus it will be a question of identifying those mass services which
`require relatively low security, and more specialised services for
`which customers might be prepared to pay a premium price to take
`account of the cost of greater security. Whether Prestel is used as
`the customer's "window" to banking services, or a bank opts for an
`entirely private system, into which the customer dials directly,
`am assuming that most
`terminals (certainly in domestic locations)
`will be the standard viewdata TV set, at least within the
`foreseeable future.
`
`I
`
`The key to existing automated cash dispensing, and in future
`possibly to automated payments at the point-of-sale,
`is the plastic
`card with a magnetic stripe.
`The card carries the fixed information
`sufficient to identify the account being activated.
`The customer
`enters in a secret personal
`identity number (PIN), which together
`with information held on the card,
`is sufficient to identify him
`securely.
`So long as viewdata banking services to an individual are
`only available through a specified set,
`then I see
`the combination of the unique set number plus a personal identity
`code to be entered via the key-pad by that
`individual, as analogous
`to a plastic card and a PIN.
`
`PIN's are already used with magnetic striped plastic cards in
`on-line automated cash dispensers and would be the basis of secure
`
`personal identification in any point of sale system using plastic
`cards.
`If the same PIN were to be used for viewdata banking then
`encryption of at least this number would be essential.
`The
`alternative would be a different PIN and bankers are very reluctant
`at
`the thought of proliferating personal numbers, which are likely
`to get lost or written down by customers,
`thereby increasing
`security risks. whether this is a real problem or not,
`there is the
`
`
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR201600753
`Page 12
`Page 12
`
`

`
`l94
`
`question of the need for security of the actual information itself
`and whether data encryption would be needed.
`
`Security of Data Communication
`
`In the domestic market, which I assume will have only standard
`Prestel sets, I presume there will not be an encryption capability,
`so it will be a question of designing viewdata banking services
`which do not require a high degree of security of data
`communication. My views on this are probably heretical in banking
`circles.
`I see no reason why this choice should not be left to
`customers themselves. Most individuals, myself included, might feel
`that their own personal financial affairs are sufficiently
`uninteresting to anybody else that the use of a standard set, a
`secret code known only to the individual, and a secure bank database
`are good enough.
`
`Those not trusting a non—encrypted system, more likely to be
`businesses, would have to resort either to traditional methods of
`receiving information from their banks, namely by post, or to
`invest
`in more sophisticated terminals which had encryption
`facilities. The willingness of banks to offer specialisd encrypted
`services for the few would depend very much on those customers‘
`willingness to pay.
`
`Services to Whom?
`
`Having considered the way viewdata might give customers better
`access to information about their accounts, and might enable them to
`send messages of instruction to their banks, and given all the
`systems issues, where will
`the viewdata banking market lie?
`To whom
`will services be provided given the likely variety of viewdata
`system sophistication amongst bank customers, and what services are
`likely to appeal and be developed for different market sectors?
`
`In the personal market bank services via viewdata will be limited by
`the capabilities of the standard viewdata set.
`Individuals will be
`most unlikely to invest
`in added sophistication simply to obtain
`bank services in the home. Personal viewdata banking will
`therefore be constrained by the security features for personal
`identification and data transmission which will be available via
`
`Prestel, or what can be achieved by a standard viewdata set and a
`private bank system.
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR201600753
`Page 13
`Page 13
`
`

`
`
`
`
`
`l95
`
`to develop
`There is then the question of why any bank would want
`viewdata services at all.
`Some use of viewdata could be a cheaper
`way of delivering existing services, such as ordering cheque books
`and statements, and also, as I will mention later, automating
`certain regular payments. Other uses, such as giving customers
`better access to their accounts, and more information about their
`financial affairs, will be a real
`increase in service, and one that
`would require considerable investment by the banks in either
`
`restructuring their existing databases, or creating new ones. These
`developments could only be justified if as part of a "gold star"
`service for which customers were prepared to pay.
`
`Such enhanced services are likely to be attractive to the corporate
`sector and it is here that most of the initial potential will
`probably lie, especially given that the early spread of viewdata is
`expected to be in the business sector. This would be particularly
`true if business terminals become more sophisticated with local
`storage and intelligence, and banks are able to offer services
`involving financial information processing such as cash flow
`forecasting, financial modelling, and account reconciliation.
`However, very large corporate customers will soon have (if they do
`not already have) direct and specialised links with their banks.
`Thus use of viewdata as a comunications medium could well be more
`
`applicable to medium and small sized businesses, so long as adequate
`security can be achieved at an acceptable cost.
`
`If one considers payment services then it is necessary to
`distinguish between using viewdata to buy goods and using it to
`settle regular bills. The former would tend to be spontaneous,
`once—off payments arising when viewdata was used primarily as a
`sales medium. Users could see what was on offer, and then order and
`pay for the goods or services at the same time.
`Payments for
`regular bills are essentially pre-determined and apart
`from amount
`and exact
`timing can be pre-specified in terms of who is paying whom
`for what.
`
`
`
`Buying Goods Via Viewdata
`
`Already users can order goods and pay for them via Prestel by using
`their credit card number.
`The system is simple and conceptually no
`different from ordering goods over the phone and quoting the card
`number, or filling it in on mail order coupons in magazines.
`Transactions are authorised only if the address to which the goods
`are to be dispatched tallies with the card issuers’ own records.
`The messages that need to be conveyed are shown in Diagram 3.
`Prestel merely conveys the necessary information to the merchant who
`then verifies the payment and collects the money using existing
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apmev.PMC
`IPR2016-00753
`|PR201600753
`Page 14
`Page 14
`
`

`
`l96
`
`procedures, as does the card company when obtaining eventual payment
`from the cardholder.
`
`DIAGRAM 3
`
`A Viewdata payment system — by Credit Card
`
`
`
`MER HANT
`
` please pay me
`
`IJBIKC3
`
`Credit card companies already have large and efficient authorisation
`systems as a key part of their existing operations,so authorising
`Prestel payments imposes no significant extra cost.
`If banks were
`to allow payment on a current account
`in exactly the same way then
`they would have to set up such systems from scratch themselves.
`Unless both user and retailer had accounts with the same bank,
`systems would have to involve an inter-bank element, enabling
`requests for payment made to one bank to be passed to another.
`
`these
`
`In fact a similar form of payment system already exists with direct
`debits. However,
`this depends on bank customers signing mandates
`specifying exactly who can originate such payments and when, and
`
`
`
`
`
`
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR201600753
`Page 15
`Page 15
`
`

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`197'
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`direct debits are only used for payments made at regular intervals
`which are known in advance.
`I do not think that bankers or their
`
`customers would accept an open mandate which enabled Prestel
`retailers to originate a request for payment at any time for any
`amount given only an account number provided by such an open system
`as Prestel. At least with credit card payments the customers do not
`actually part with their money until they have received their
`statement
`from the card company, and agreed to pay.
`
`It is therefore my View that any payment via viewdata from a current
`account will need to be individually authorised at the moment of the
`transaction.
`Thus any system based on viewdata which enabled
`spontaneous payments to be made from a current account would have to
`be very different from the current
`form of Prestel and the following
`is just one way that this might be achieved.
`
`The Prestel response frame would be the obvious vehicle for telling
`the merchant
`that an order was made and that payment would be
`coming,
`this time from a current account.
`A message would also have
`to go from the user to his bank containing the necessary information
`to authorise the payment.
`If encryption facilities existed then
`some form of coded message could be sent via the retailer who could
`originate a direct debit complete with authorisation details which
`only the bank could decode. However, without encryption there would
`have to be a direct link from the user to his bank as shown in
`
`Diagram 4, which shows the flow of messages that would be necessary.
`
`AVievvdata payment system—by Credit Transfer
`
`dehit my account
`& pay merchant
`
`
`flow of funds
`
`
`system
`
`ou have
`een paid
`
`IJBIRCD
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apple v. PMC
`IPR2016-00753
`|PR201600753
`Page 16
`Page 16
`
`
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`;.
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`E2i
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`i121.z
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`

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`l98
`
`The link to the bank to give authorisation could be used to convey
`sufficient information to enable the bank to debit
`the user's
`
`to the merchant, complete with
`account, and to create a credit
`reference information so the merchant would know which transaction
`
`The bank could then create an automated credit
`the payment was for.
`transfer to be processed by existing mechanisms (BACS if the payment
`is to another bank) for the actual transfer of funds.
`
`With such a system these would then be a real problem in creating
`all the information needed by the user's bank to make the payment.
`Allowing the user to enter it via the keypad is no guarantee of
`accuracy and would be an unacceptable security risk.
`It viewdata
`sets had magnetic card reading devices then some of these problems
`could be overcome. As this is not a development I foresee, other
`than in specialised locations such as hotel bedrooms or places with
`public terminals,
`then somehow the necessary information would have
`to be generated and transmitted by combined Prestel and private bank
`systems themselves. This would require considerable development of
`Prestel and also need a high degree of cooperation between the
`various participating institutions.
`
`Given that the same end result - namely the user getting the goods
`and the merchant getting the money - can already be achieved using
`credit cards I question whether the facility to make spontaneous
`payments via viewdata from a current account will be developed.
`will
`involve considerable development costs to overcome the real
`security problems without giving many additional benefits. However,
`I do not
`think the same applies to regular payments.
`
`It
`
`Using Viewdata to Pay Bills
`
`With regular payments most of the information needed to effect the
`transaction can be pre—specified - payer's and payee's bank and
`account
`information, and the reference number. With pre-authorised
`payments such as standing orders and direct debits the amount and
`timing are already pre—specified. However, over two-thirds of
`regular commitments of personal bank account holders are still
`settled by cheques or cash.
`The proportion is far higher for
`businesses. There are many good economic reasons why certain
`regular payments should not change to payment by standing order or
`direct debit.
`The former are often extremely expensive to the banks
`where frequent mandate changes are needed, and even the latter can
`be more expensive if their use means a greater frequency of
`payments. Many customers value the ability to decide the timing of
`payments - a facility given to them by cheques and cash. Viewdata
`could be a cost effective means of permitting customers to make
`automated regular payments, yet maintain full control of amount and
`timing. Diagram 5 shows how such a system might work.
`
`PMC Exhibit 2112
`PMC Exhibit 2112
`Apple v. PMC
`Apmev.PMC
`IPR2016-00753
`|PR201600753
`Page 17
`Page 17
`
`

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`l99
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`DIAGRAM 5
`
`Viewdata Regular Payments
`
`1 Rates
`2 Telephone
`
`V011 haY9
`
`a}1 T fl M
`
`__1
`
`5 Deposit ab
`
`péy £50
`
`IIJBIICD
`
`A bank might create and maintain for a customer a file of all his
`regular commitments.
`The customer could ask for the information to
`be displayed and then decide which payments to authorise. This
`could be a valuable service to corporate customers (in particular
`small businesses) who could have on file all their regular
`suppliers.
`The file could also contain details of other accounts
`held by the customer and so transfers could be effected between
`accounts.
`’
`
`It would seem that the fraud and security problems of regular
`payments would be less than with spontaneous payments.
`Payment
`could only be made to specified payees. Control of those who could
`receive regular Viewdata payments would be in the hands of the payer
`and his bank. Viewdata would simply be a message service between a
`customer and his bank. Once the bank received the instructi