Ulllted States Patent
`
`[19]
`
`[11] Patent Number:
`
`5,870,456
`
`Rogers
`
`[45] Date of Patent:
`
`Feb. 9, 1999
`
`US005870456A
`
`[54] AUTOMATED INTERACTIVE BILL
`PAYMENT SYSTEM USING DEBIT CARDS
`
`[75]
`
`Inventor: Catherine R. Rogers, Dallas, Tcx.
`
`[73]
`
`/\SS1igFI66Z Telepay, Inc-,
`
`|)€1llL1S,
`
`i|‘CX-
`
`[21] App]. No; 946,272
`,
`Ffled:
`
`[22]
`
`Oct‘ 7’ 1997
`(Under 37 CFR 147)
`
`5.652.786
`5,715,298
`
`7/1997 Rogers.
`2/1998 Rogers .
`OTHER PUBLICATIONS
`
`Information Networks, V6, No. 8, Jul. 26, 1993, Sccinfone
`Alive and Well; Bell Atlantic Readiesfor Rollout.
`Tanaka, David; Intemc Rools Out Debit Card System; Com-
`puting Canada V01. V18, Issue No. 21, Oct. 13, 1992.
`Blackwell, Gerry; Computing In Banking; Technology is the
`Weapon; Computing Canada, V16, p. 59, Oct. 11, 1990.
`The Score Card Evens in a POS Title Fight; Bank Network
`News Jun. 11, 1992, VIONZ.
`
`Related US’ Application Data
`.
`,
`.
`,
`,
`,
`[63] Continuation of Ser. No. 787,981, Jan. 22, 1997, Pat. No.
`5,715,298.
`
`Primarv Exciminer—VVing F. Chan
`Attorney, Agent, or Firm—Haynes and Boone, L.L.P.
`'
`[57]
`ABSTRACT
`
`Int. Cl.“ .................................................... H04M 11/00
`[51]
`[52] U-S- CL ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
`~~ - -~ 379/9131? 705/'40
`l58l
`Field 01' Search
`379/9101» 91-02»
`379/93-02; 93-01: 93-12: 9343: 9326» 93-28»
`143, 144$ 235/375; 379» 330; 705/'39» 40
`
`l56l
`
`References Cited
`Us. PATENT DOCUMENTS
`
`4,074-.044
`4594397
`4,823,264
`4,947,028
`5,121,945
`5,126,936
`$220501
`572337329
`5,285,382
`5,383,113
`
`6/1987 Kalmus St 21L .
`9/1987 Gram el 31-
`-
`4/1989 Deiiiing .
`8/1990 Gorog .
`6/1992 Tlioiiison et al.
`6/1092 Champion ct al.
`6/1993 Lawlm. et al. .
`2/[994 Anderson ,
`2/1994 Muehlberger et al.
`1/1995 Kight et al.
`.
`
`.
`
`.
`
`.
`
`Maaaaa aaa apparatus fa, processing payfflent aaaaaaaaaaaaa
`using debit card numbers without
`the requireinent of a
`personal identification nuIIiber (PIN) is disclosed. Atelepay
`system of the present
`invention provides an interface
`between a standard touclitone telephone and at least one
`debit card network such that real—time bill payment trans-
`actions may be ellected using a keypad of the telephone. The
`telepay system includes an interactive voice response unit
`[or prompting a payor to enter an access code, account
`number, debit card number and payment amount and for
`informing the user of the status of the transaction. Real—time
`processing of transactions is provided through use of debit
`card networks, rather than the Automated Clearing House.
`The telepay system is also capable of performing settlement
`functions and processing inquiries by payees of the system
`regarding previously processed transactions.
`
`8 Claims, 9 Drawing Sheets
`
`12
`
`\ W
`. \
`
`\
`
`10
`
`—-
`14
`
`VELOCITY FILE
`ACCOUNT NUMBER
`
`
`
`man CARD
`,6
`— VELOCHY FILE
`
`NEGATIVE
`E FILE
`
`BANK SETTLEMENT
`RECORDS
`
`PayPal Ex.1011, p.1
`PayPal Ex.1011, p.1
`
`

`
`U.S. Patent
`
`Feb. 9, 1999
`
`Sheet 1 of 9
`
`5,870,456
`
`VELOCITY FILE
`
` DEBIT CARD
`
`BANK SETTLEMENT
`RECORDS
`
`PayPal Ex.1011, p.2
`PayPal Ex.1011, p.2
`
`

`
`U.S. Patent
`
`Fcb.9, 1999
`
`Sheet 2 of9
`
`5,870,456
`
`BHL PAYMENT TRANSACHON PROCESS
`
`FROM HG.2G
`
`200
`
`PLAY THE WELCOME MESSAGE
`
`202
`
`REQUEST PAYEE ACCESS CoDE
`
`204
`
`CHECK ACCESS CODE
`FOR VALIDITY
`
`INSTRUCT CALLER OF
`INVALID ENTRY
`
`210
`
`No
`
`N0
`
`208
`
`206
`
`
`
`
`ACCESS
`CODE VALID
`'3
`
`
`
`YES
`
`YES
`
`214
`
`216
`
`R
`U TOR RT
`NT R
`TEHOE
`iiCoUNLTLENUM%EER OER
`
`THE BILL BEING PAID
`
`CHECK ACCOUNT NUMBER
`FOR VALIDITY VIA
`PAYEE ALGORITHM
`
`REQUEST CALLER TO CHECK
`INFORMATION AND CALL AGAIN
`
`212
`
`INSTRUCT CALLER or
`INVALID ENTRY
`
`221
`
`To FIG. 23
`
`FROM FIG. 23
`
`F"Lg. 2A
`
`PayPal Ex.1011, p.3
`PayPal Ex.1011, p.3
`
`

`
`U.S. Patent
`
`Fcb.9, 1999
`
`Sheet 3 of9
`
`5,870,456
`
`FROM FIG. 2A
`
`ACCOUNT
`NUMBER VALID
`?
`
`
`
`
`
`
`224
`
`225
`
`REQUEST CALLER TO ENTER
`DEBIT CARD NUMBER
`
`CHECK DEBIT CARD NUMBER
`FOR VALIDITY
`
`INSTRUCT CALLER OF
`
`INVALID ENTRY
`
`232
`
`DEBIT
`
`CARD NUMBER
`
`VALID‘?
`
`228
`YES
`230
`
`REQUEST CALLER TO CHECK
`INFORMATION AND CALL AGAIN
`
`TO FIG. 2C
`
`234
`
`Fig. 2B
`
`PayPal Ex.1011, p.4
`PayPal Ex.1011, p.4
`
`

`
`U.S. Patent
`
`Fcb.9, 1999
`
`Sheet 4 of9
`
`5,870,456
`
`FROM FIG. 2B
`
`
`
`REQUEST CALLER TO ENTER
`DOLLAR AMOUNT OF BILL
`
`
`
`REPEAT DOLLAR AMOUNT
`TO CALLER
`
`ASK CALLER IF THE DOLLAR
`AMOUNT ENTRY WAS CORRECT
`AND TO RESPOND BY A
`TELEPHONE KEYPAD DEPRESSION
`
`
`
`236
`
`238
`
`240
`
`
`
`
`
`WAS
`DOLLAR ENTRY
`CORRECT
`9
`
`246
`
`PayPal Ex.1011, p.5
`PayPal Ex.1011, p.5
`
`
`
`REQUEST CALLER TO CHECK
`INFORMATION AND CALL AGAIN
`
`TO FIG. 2D
`
`mg. 20
`
`

`
`U.S. Patent
`
`Fcb.9, 1999
`
`Sheet 5 of9
`
`5,870,456
`
`FROM FIG. 2C
`
`
`
`
`
`CHECK ACCOUNT NUMBER
`VELOCITY FILE FOR THE LAST
`USAGE OF ACCOUNT NUMBER
`
`
`
`248
`
`
`
`252
`
`256
`
`PayPal Ex.1011, p.6
`PayPal Ex.1011, p.6
`
`HAS THE
`ENTERED ACCOUNT NUMBER
`EXCEEDED THE VELOCITY
`FILE RESTRICTIONS
`9
`
`
`
`YES
`
`INSTRUCT THE CALLER THAT
`THE TRANSACTION CANNOT BE
`PROCESSED DUE To THE
`FREQUENCY or PAYMENTS oN
`THE ENTERED ACCOUNT NUMBER
`
`HAS THE
`ENTERED DEBIT CARD NUMBER YES
`EXCEEDED THE VELOCITY
`
`FILE RESTRICTIONS
`
`INSTRUCT CALLER THAT
`'?
`THE TRANSACTION CANNOT BE
`
`PROCESSED DUE TO
`THE FREQUENCY
`OF DEBIT CARD USAGE
`
`
`254
`
`T0 FIG. 2E
`
`Fig. 21)
`
`

`
`U.S. Patent
`
`Fcb.9, 1999
`
`Sheet 6 of9
`
`5,870,456
`
`FROM FIG. 2D
`
`258
`
`IS THE ENTERED
`
`DEBIT CARD NUMBER
`OR ENTERED ACOUNT NUMBER
`CONTAINED IN THE
`NEGATIVE FILE?
`
`262
`
`264
`
`SUMMARIZE THE DETAILS
`OF THE TRANSACTION
`TO THE CALLER
`
`ASK THE CALLER TO ACCEPT
`PROCESSING OF THE
`TRANSACTION BY A TELEPHONE
`KEYPAD DEPRESSION
`
`YES
`
`260
`
`INSTRUCT THE CALLER THAT
`THE TRANSACTION CANNOT
`BE PROCESSED
`
`
`
`
` DID THE
`CALLER WANT TO
`PROCESS THE
`TRANSACTION
`'_>
`
`THANK THE CALLER FOR
`USING THE SYSTEM AND
`TERMINATE THE CALL
`
`
`
`268
`
`TO FIG. 2F
`
`Fig. 2E
`
`PayPal Ex.1011, p.7
`PayPal Ex.1011, p.7
`
`

`
`U.S. Patent
`
`Feb. 9, 1999
`
`Sheet 7 of 9
`
`5,870,456
`
`FROM FIG. 2E
`
`
`
`
`
`INITIATE AN OUTDIAL TO A
`DEBIT CARD NETWORK FOR
`PROCESSING
`
`
`
`PLAY A RECORDED
`MARKETING MESSAGE
`WHILE THE TRANSACTION IS
`BEING POSITIVELY AUTHORIZED
`
`
`
`270
`
`272
`
`274
`
`
`
`
`RECEIVE THE POSITIVE
`AUTHORIZATION RESPONSE FROM
`THE DEBIT CARD NETWORK
`
`TRANSACTION
`APPROVED?
`
`INFORM CALLER THAT THE
`TRANSACTION WAS DECLINED BY
`THE CARD ISSUING INSTITUTION
`
`INFORM THE CALLER OF THE
`APPROVAL CODE ISSUED BY
`
`THE DEBIT CARD NETWORK
`
`PayPal Ex.1011, p.8
`PayPal Ex.1011, p.8
`
`
`
`UPDATE TRANSACTION LOG FILES
`
`TO FIG. 2G
`
`Fig. 2F
`
`280
`
`282
`
`

`
`U.S. Patent
`
`Feb. 9, 1999
`
`Sheet 8 of 9
`
`5,870,456
`
`FROM FIG. 2F
`
`
`
`UPDATE DEBIT CARD
`VELOCITY FILE
`
`
`
`UPDATE ACCOUNT NUMBER
`VELOCITY FILE
`
`Fig. 20
`
`
`
`
`
`ASK THE CALLER IF ANOTHER
`PAYMENT IS DESIRED BY
`DEPRESSING A SELECTION ON
`THE TELEPHONE KEYPAD
`
`
`
`
`
`WAS
`
`ANOTHER PAYMENT
`SELECTED?
`
`TERMINATE THE CALL
`
`
`
`290
`
`
`
`292
`
`TO FIG. 2A
`
`SETTLEMENT PROCESS
`
`PERFORM AN OUTDIAL TO
`THE FIRST PAYEE’S
`COMPUTER BILLING SYSTEM
`
`Fig. 3
`
`TRANSMIT SELECTED PAYEE DATA
`FILE OF ACCOUNT NUMBERS AND
`AMOUNTS OF SUCCESSFULLY
`COMPLETED TRANSACTIONS
`
`284
`
`286
`
`288
`
`300
`
`302
`
`
`
`
`PERFORM AN OUTDIAL
`TO NEXT PAYEE'S
`COMPUTER BILLING SYSTEM
`
`
`
`PayPal Ex.1011, p.9
`PayPal Ex.1011, p.9
`
`
`
`
`
`YES
`
`END SETTLEMENT
`TRANSMISSION PROCCESS
`
`308
`
`

`
`U.S. Patent
`
`Fcb.9, 1999
`
`Sheet 9 of9
`
`5,870,456
`
`PAYEE INQUIRY
`
`400
`
`ASK THE PAYEE CALLER To
`ENTER THE SECURITY CODE
`FOR INQUIRY CAPABILITY
`
`WAS
`THE ENTERED
`CODE VALID
`
`
`
`-
`
`YES
`
`
`
`406
`
`REQUEST CALLER TO ENTER
`PAYOR'S ACCOUNT NUMBER
`
`
`
`INFORM CALLER AN INVALID
`
`SECURITY CODE wAs ENTERED
`
`
`
`
`
`"0
`
`410
`
`408
`
`CAN THE
`ACCOUNT NUMBER BE
`FOUND ON THE DATABASE
`
`9 -
`
`THAT ACCOUNT NUMBER INFORM THE CALLER OF THE
`
`YES
`
`INFORM CALLER THAT NO
`
`INFORMATION EXISTS FOR
`
`412
`
`DETAILS OF THE LOCATED
`TRANSACTION
`
` ASK THE
`YES
`CALLER IF THEY
`
`
`HAVE ANOTHER
`INQUIRY
`
`
`
`414
`
`
`NO
`
`416
`
`TERMINATE THE CALL
`
`IE‘ig;.
`
`41
`
`PayPal Ex.1011, p.10
`PayPal Ex.1011, p.10
`
`

`
`5,870,45 6
`
`1
`AUTOMATED INTERACTIVE BILL
`PAYMENT SYSTEM USING DEBIT CARDS
`
`This is a continuation of application Ser. No. 08/797,981
`filed on Jan. 22, 1997, now U.S. Pat. No. 5,715,298.
`TECI INICAL FIELD
`
`The invention relates generally to systems for electronic
`bill payment systems and, more particularly, to a universal,
`real-time bill payment system method and system that uses
`debit
`(ATM) cards without
`the requirement of a PIN
`(personal identification number) in conjunction with touch
`tone telephones to initiate consumer bill payments electroni-
`cally and provide for the elimination of paper checks and the
`heretofore use of the Automated Clearing House of the U.S.
`Banking System to settle individual items.
`BACKGROUND OF THE INVENTION
`
`Bill payment by telephone has been available primarily
`from linancial institutions for approximately l5 years. Her-
`alded as “home banking” this technology allowed a cus-
`tomer of a bank, savings and loan, or credit union to pay any
`pre-registered bill with the use of a touch tone telephone and
`that financial
`institutions interactive voice response unit
`(provided that they offered the serviced The customer wo11ld
`first have to select a financial institution that offered the
`service, request to participate in the service, send in a voided
`check, and then provide a manual list of all the bills that
`were desired to be paid using this system. In addition, a
`signature authorization card would be to signed and archived
`by the financial institution. The financial institution would
`then manually input all of this information into their
`computer, and then advise the customer that system access
`was then available. This process usually took up to two
`weeks to complete.
`Once activated, the customer would then have the capa-
`bility to call
`the financial institution and input payment
`instructions in conjunction with a touch tone telephone and
`reference each payee by a number that was assigned by the
`financial institution. This process of bill payment would
`allow the customer to pay bills by having the bank then issue
`n “electronic check” to the designated payee. This “elec-
`tronic” document would then be presented to the Automated
`Clearing House of the U. S. Banking System for processing
`and clearing. In reality the process was identical to the
`processing of a paper check, with the only exception being
`that there was not any paper involved in the transaction. The
`payment could still “bounce” and be returned for non-
`sullicient funds since there was no actual verification on the
`customer’s account balance to insure that sufficient funds
`were on deposit to cover the transaction. In addition, all in
`place check clearing time requirements were still in place, as
`it took typically at least 3—5 days to clear. Until clearing was
`realized the recipient of the funds never had actual use of the
`funds used for payment. If a new debt was incurred, it would
`have to be pre-registered on the system in order to utilize this
`“electronic” capability.
`If a customer changed financial
`institutions, the whole process of pre-registering all debts,
`signature cards, and a voided check would iave to be
`repeated. Existing pay by phone systems o cred some
`convenience to the user, but were cumbersome to administer
`and usage was never widespread.
`As “home banking” gained more interest, many compa-
`nies developed special purpose telephones with visual dis-
`plays and “swipe card readers” that
`the consumer could
`purchase that would allow the use of a debit (ATM) card to
`
`u:
`
`lll
`
`.u‘J1
`
`40
`
`mU:
`
`E)II
`
`nIJI
`
`2
`basically achieve the same purpose as was evident in pre-
`viously implemented systems (for the purposes of brevity in
`this disclosure the term “debit card” shall be construed to
`mean both debit and credit card). The only differences is that
`the consumer could now “swipe” the debit card through the
`reader
`that was part of the telephone. The Automated
`Clearing House of the U. S. Banking System was still used
`to process paymenls, and all pre—registration and signature
`cards were still required. All “electronic check” clearing
`time requirements were still needed, and the transaction
`would still be returned for non—sufficient funds. If a service
`offered a specialized telephone and bypassed the Automated
`Clearing House, using debit card networks, the debit card
`used to process the transaction required a PIN. There was a
`natural resistance to the purchase of special telephones that
`proved to be relatively expensive, in addition to the monthly
`fees necessary to remain a customer of this service.
`As personal computers began to proliferate, many sys-
`tems became available that would allow bill payment in
`conjunction with a third party service and a personal com-
`puter owned by the user with that third party software loaded
`into it, such as the Prodigy system. Still, however, all of the
`aforementioned limitations still applied to these personal
`computer based systems.
`In summary, these home banking systems shared many
`common drawbacks. For example,
`the burden of pre-
`registration and the listing of bills to be paid was borne by
`the consumer. The system required the processing of trans-
`action in the same manner as a paper check, or an electronic
`check through the Automated Clearing House of the U.S.
`Banking System. The system presented the possibility that a
`transaction could be returned for non—sullicient funds rea-
`sons. In addition, a clearing time for each transaction of 3—5
`days. Furthermore, in many cases, the prior art home bank-
`ing systems required the use of specialized equipment by the
`customer (such as special purpose telephones equipped with
`electronic card readers or encryption devices), or the finan-
`cial institution o ering services to it’s customer base.
`Moreover, although it is known in the field of accounting
`to call and manually, in conjunction an operator, verify that
`a payor had remitted a bill, there is no capability for the
`recipient of the funds (payee) to electronically immediately
`and positively inquire as to payment status after it was
`electronically authorized by the a debit card network.
`Therefore, what
`is needed is a universal, real-time bill
`payment system method and system that uses debit (ATM)
`cards without the requirement of a PIN (personal identifi-
`cation number) in conjunction with touch tone telephones to
`initiate consumer bill payments electronically and provide
`for the elimination of paper checks, as well as the use of the
`Automated Clearing House.
`SUMMARY OF THE INVENTION
`
`technical
`The foregoing problems are solved and a
`advance is achieved by method and apparatus of the present
`invention for an improved universal bill payment system. In
`a departure from the art, bills may be paid using a telephone
`connectable to at least one remote debit card network via a
`telepay system.
`In a preferred embodiment, the method of the present
`invention comprises steps of prompting a caller to enter an
`access code using a keypad of said telephone, said access
`code identifying a current payment transaction; responsive
`to entry of an access code, determining whether said entered
`access code is valid; prompting said caller to enter an
`account number using said telephone keypad said account
`
`PayPal Ex.1011, p.11
`PayPal Ex.1011, p.11
`
`

`
`5,870,45 6
`
`uu
`
`lll
`
`3
`number identifying a payee in connection with said current
`payment
`transaction; responsive to entry of an account
`number, determining whether said entered account number
`is valid; prompting said caller to enter a debit card number
`using said telephone keypad, said debit card number iden-
`tifying a payor in connection with said current payment
`transaction; responsive to entry of a debit card number,
`determining whether said entered debit card number is valid;
`prompting said caller to enter a payment amount using said
`telephone keypad; responsive to a determination that a
`payment amount has been entered and filrther responsive to
`a determination that said entered access code, account
`number and debit card number are valid accessing a remote
`debit card network associated with said entered debit card
`number, said accessed remote debit card network determin-
`ing whether suflicient funds exist in an account associated
`with said entered debit card number to complete said current
`payment
`transaction, responsive to a determination that
`suflicient funds exist in said associated account, deducting
`said entered payment amount from said account associated /
`with said entered debit card number, adding said entered
`payment amount to an account associated with said entered
`account number and informing said caller of an approval
`code issued by said accessed remote debit card network and
`storing said entered access code, account number, debit card
`number and payment amount in a transaction log file of said
`telepay system, and responsive to a determination that
`suflicient funds do not exist
`in said associated account,
`informing said caller that said current payment transaction
`has been declined and terminating said current payment
`transaction.
`
`A technical advantage achieved with the invention is that
`it enables the use of debit card (ATM) networks for a
`real-time positively authorized bill payment that inquire
`.u‘J1
`electronically against balances on deposit PRIOR to the »
`processing of the bill payment transaction, thus eliminating
`the Automated Clearing House to process individual trans-
`actions.
`
`Another technical advantage achieved with the invention
`is that it enables real-time inquiry capability into the con-
`sumers balances at virtually any U.S. financial institution in
`order to verify funds on deposit prior to processing the
`transaction, thereby eliminating the possibility of a non-
`suflicient ILmds occurrence.
`
`40
`
`Another technical advantage achieved with the invention
`is the elimination of a PIN (personal identification number)
`in conjunction with debit card number usage in order to
`comply with Regulation E of the U.S. Banking Regulations
`by maintaining security and frequency of usage restrictions
`in the method and process.
`Yet another technical advantage achieved with the inven-
`tion is the integration of interactive voice response technol-
`ogy and debit card number authorization processing with
`electronic funds transfer bill payment method and process.
`Still another technical advantage achieved with the inven-
`tion is the elimination of any specialized equipment on the
`part of the consumer to process an electronic bill payment
`(i.e., personal computers, specialized telephones or
`terminals, etc.).
`Afurther technical advantage achieved with the invention
`is the elimination of any pre-registration or “sign up”
`procedure on the part of the payor.
`Afinal technical advantage achieved with the invention is
`the provision to the recipient of the bill payment of an
`electronic daily general ledger or activity summary, that
`balances back to the gross amount of electronic deposits
`
`mU:
`
`hll
`
`mu.
`
`4
`made in the designated bank accounts by the utilized debit
`card networks. Moreover, the system of the present inven-
`tion offers to the consumer the advantage of anywhere,
`anyplace, anytime, convenience with complete spontaneity
`as to the system usage.
`BRIEF DESCRIPTION OF TIIE DRAWINGS
`
`FIG. 1 is a block diagram of a telepay system embodying
`features of the present invention.
`FIGS. 2A—2G illustrate a flowchart of a bill payment
`transaction process of the present invention.
`FIG. 3 is a flowchart of a settlement process of the present
`invention.
`
`FIG. 4 is a flowchart of a payee inquiry process of the
`present invention.
`DESCRIPTION OF TIIE PREFERRED
`EMBODIMENT
`
`Referring to FIG. 1, the general operation and structure of
`the system of the present invention will be described, it
`being understood that the operation of the system will be
`described in greater detail with reference to FIGS. 2.1, 2.7,
`3.1 and 4.1. When a consumer calls into the TelePay system
`10 using a telephone 12, the consumer is prompted by an
`interactive voice response unit within the system 10 to input
`certain necessary information,
`to wit, payee access code,
`debit card number, account number, and amount. The Tele-
`Pay system 10 then checks all of its internal files, including
`an account number velocity file 14, a debit card velocity file
`16 and a negative lile 18, to validate the access code entered,
`the card number presented,
`the validity of the account
`number, and il‘ that card number and/or account number has
`ever processed a fraudulent
`transaction. If any of these
`internal checks into the TelePay system 10 process indicate
`fraud, then the transaction is denied. If all of the checks are
`passed, then the TelePay system 10 assembles the data into
`an authorization request message, which is electronically
`sent to a debit card network 20 for transmission to a financial
`institution 22 that issued the card for verification of balance
`on deposit.
`The debit card network 20 receives a response as to
`whether or not the there are suflicicnt funds on deposit to
`process the transaction requested by the consumer. The debit
`card network 20 prepares an appropriate deduction from the
`consumer’s account and prepares an appropriate deposit to
`the payee’s account to be processed later. In addition any
`fees that are due from the payor are also preprocessed at this
`time. The debit card network then sends a message to the
`TelePay system 10 while the consumer is still on the
`telephone 12 line. The TelePay system 10 will then translate
`the numeric data received into an audible verbal response
`transmitted to the consumer via the telephone 12.
`Settlement, as described in greater detail, with reference
`to FIG. 3.1, is defined herein as the methodology of debiting
`and crediting the appropriate accounts allected by the above-
`described transaction. These accounts would all'ect
`the
`payor, the payee, and the 'l‘elePay system 10 for any trans-
`action fee. The debit card network 20 will
`initiate this
`process. The debit card network 20, however will only
`deposit a TOTAL of the days transactions into the payee’s
`account. The network has no capability to discern which
`consumer paid how much. It then becomes the responsibility
`of the TelePay system 10 to detail
`the specific account
`numbers and amount of payments that were made that day.
`This is accomplished by a computer dial-up link (RJE) 24
`
`PayPal Ex.1011, p.12
`PayPal Ex.1011, p.12
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`from the TelePay system 10 to the payee’s billing system 26.
`The TelePay system 10 will also bill the payee on a monthly
`basis for 800 telephone line usage (if any). The accounts
`receivable department of the payee is also provided with the
`capability to call into the 'l'elePay system 10 to inquire as to
`if and when a consumer initiated a payment.
`A single 800 number is used by the TelePay system 10.
`Technology allows for a virtually unlimited number of
`telephone lines to terminate on the same number, limited
`only by the compliment of computer hardware and it’s
`capabilities that are running the system. The caller will be
`asked to enter the access code of the bill to be paid. This
`access code typically will be printed on the bottom of the
`statement in an obvious manner and is a requirement of all
`payees utilizing the service. The code will identify the payee
`within the TelePay system 10 and will activate the TelePay
`software to verbalize the customer’s selection in order to
`give positive re—er1forcen1er1t as is the case with all customer
`input (i.e. “you have elected to pay Florida Power and Light
`in Miami, Fla. ” Press 1 if this is correct and you wish to
`continue, or press 2 ill incorrect”). II‘ incorrect, the customer
`will be asked to input another access code, or to terminate
`the call. Assuming the proper access code is confirmed, the
`next step will be the entering of the account number of the
`bill to be paid, as this number also appears on the monthly
`statement. All selections will be verbally re-enforced.
`The next step will be the entering of the debit (ATM) card
`number. Various TelePay system 10 checks will be done on
`this entry. Verbal re—enforcen1ent of the numbers entered is
`again given to the user (“You have entered 5419 23485
`4657. Please press 1 if correct or 2 if incorrect”). The
`TelePay system 10 will then instruct the user to enter the
`amount of the payment and verbal positive re—enIorcement
`will be given. If all has been acknowledge positively up to
`.u‘J1
`this point, then the system will give a verbal summary of the ,
`transaction and give the customer a final opportunity to
`validate the entries (“Press 1 if correct, or press 2 if
`incorrect”). When the transaction has been positively
`re—enforced by the user, the TelePay system will then build
`an authorization request that will be sent o11t to the existing
`debit (Electronic Funds Transfer) networks. When the trans-
`action has been authorized, the system will once again give
`positive re-enforcement
`to the user (“Your payment
`to
`Dallas Gas and Electric in the amount or $124.56 has been
`paid from your ATM card account number 5419 23485 4657.
`Your authorization number
`for
`this transaction is
`XXXXXXX. Please make a note of this authorization code
`for future reference. If you would like to hear the authori-
`zation code for this transaction again, press 1. If you would
`like to pay another bill press 2. If you are finished press 3.”).
`If the user elects to pay another bill during the same
`session, then the system will retain the previously entered
`card number and ask the caller if the next bill being paid is
`to be paid with the same card, or allow the opportunity to
`enter a new card number.
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`All of the debit (Electronic Funds Transfer) networks are
`accustomed to the assessment, debiting and crediting of fees
`to the issuers and acquirers oll debit (ATM) and credit
`transactions. In many cases, a 75¢ fee for a customer to use
`an ATM card at an ATM that is not owned by the card issuing
`bank involves the dividing of that fee into increments as
`small as Sc. In this manner all networks that are accessed are
`compensated to assist in the authorization and routing of the
`transaction. All of these fees are electronically credited to
`the entity that earned the revenue as a result of a contractual
`relationship with that particular network. This process hap-
`pens every working day at a predetermined “cut off” period
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`mu.
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`that separates business days and is refereed to in the industry
`as “settlement”.
`
`Never before, however, has a transaction been presented
`to the debit networks for a real—tin1e authorized bill payment
`initiated by the consumer from a touch tone telephone with
`the debit card used as the transaction vehicle. Additionally,
`it has never been done without the requirement of a PIN
`(personal identification number) and still maintain transac-
`tion security. In the TelePay System 10, when a transaction
`is entered by a consumer, and subsequently passed on to an
`outside debit card network for authorization, a number of
`things happen.
`Assuming that the transaction is authorized, then any fee
`that the customer is paying, in addition to the actual bill
`payment,
`is automatically deducted from the payor’s
`account immediately and added to the amount that the debit
`card network will owe TelePay and the payee at settlement.
`The amount of the bill that was paid is automatically added
`to the amount that will be credited to the payee at the end of
`the business day (every payee is required to provide a bank
`account number that will be used to electronically credit the
`days receipts). TelePay’s bank account will,
`in a like
`manner, be automatically credited for the transaction fee.
`Any network usage fees that have to be paid to process the
`transaction by the use of an debit card network will be
`electronically paid by the TelePay system 10 to the appro-
`priate service provider. Once a day at TelePay’s settlement
`time, each payee participating in the system will receive the
`electronic or1—lir1e detail summary of the days individual
`transactions for posting to the consumer’s account.
`A llowchart illustrating the operation of a bill payment
`transaction process of the TelePay system 10 is shown in
`FIGS. 2.l—2.7. The process is initiated by a user’s calling
`into the system 10. In step 200, a general purpose welcome
`message that announces and instructs the caller in the
`manner with which the system can be used is transmitted to
`the user via the telephone 12 (FIG. 1.1). In step 202, the user
`is prompted to enter a payee access code, which is assigned
`by the embodiment of the invention in the form of a service
`and the user is made aware of this code d11e to its printed
`presence on the monthly customer statement, statement
`stuffers or other printed handouts. This code is what distin-
`guishes one payee from the other, and is the identifier that
`causes the system 10 (FIG. 1.1) to record the transaction in
`the appropriate payee record file.
`After the caller enters the access code, it is electronically
`checked against the list of authorized payees participating in
`the system 10 in step 204. In step 206, a determination is
`made whether the entered access code is valid. If the access
`code is invalid,
`in step 208,
`the system 10 checks to
`determine whether this is the third incorrect entry of an
`access code. If this is not the third incorrect entry of the
`access code, ir1 step 210, the system 10 instructs the caller
`that the access code is invalid, and offers the caller to
`opportunity to re—enter the access code in step 202. If this is
`the third incorrect entry of an access code, in step 212, the
`system 10 instructs the caller to check the access code
`information and call again.
`If the access code is entered properly within three
`attempts, in step 214, the caller is prompted to enter the
`account number of the bill that they are paying. In step 216,
`the system 10 checks the account number for validity. The
`validity check is based on the methodology that the payee
`uses to verify account numbers and will vary according to
`payee. The system 10 will have all of the participating
`payees verification methodologies. This methodology could
`
`PayPal Ex.1011, p.13
`PayPal Ex.1011, p.13
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`be a MOD 10 or MOD 11 check digit routine with or without
`a check digit in it’s most basic implementation. In a mere
`sophisticated environment, the syster11 would have in it’s
`database, a list of all the valid account numbers for that
`particular payee, cor11n1only known to those skilled ir1 the art
`as a “shadow file.”
`
`In step 218 (FIG. 22), a determination is made as to the
`validity ol‘
`the account number entered.
`II‘
`the entered
`account number is not valid, in step 220, a determination is
`made as to whether this is the third incorrect entry. Ifit is not
`the third incorrect entry, in step 221 (FIG. 2.1), the caller is
`informed that the entry is invalid and is given an opportunity
`to reenter the account number. If the entry attempt is the
`third invalid attempt, in step 222, the caller is instructed to
`check their information and call again. If a valid account
`number is entered within three attempts, in step 224, the
`system 10 requests the caller to enter the debit card number.
`In step 226, the debit card number is checked for validity.
`This validity check is done via the MOD 10 algorithm that
`is the basis for debit card issuance used by financial insti-
`tutions. Using this method that is commonly used, and
`familiar to those skilled in the art, gives a great level of
`assurance that the number that was entered by the caller was
`entered properly.
`In step 228, a determination is made
`whether the entered debit card number is valid. If the entered
`debit card number is not valid, in step 230, a determination
`is made whether this is the third invalid entry. If this is not
`the third invalid entry, in step 232, the caller is instructed of
`the invalid entry and then, in step 224, is requested to enter
`a debit card number.
`
`8
`period of time. This value is variable and is achieved
`generally by multiplying the total number of payees partici-
`pating ir1 the system times the total number of payments
`allowed by each payee over a 30 day period. If the system
`10 determines that the transaction by the payor exceeds the
`debit card velocity file criteria, in step 256,
`the caller is
`notified that the transaction cannot be processed due to the
`frequency ol‘ the number ol‘ uses of the debit card used to
`process transactions over a thirty day period.
`If the transaction by the payor does not exceed the debit
`card velocity file criteria, in step 258 (FIG. 25), the system
`10 determines whether either the payor account number or
`the debit card number is contained in the negative file 18
`comprising a database of negative accounts stored on the
`system 10. The purpose of the negative file 18 maintained by
`the system 10 is to prevent debit card numbers and account
`numbers that have been involved in fraudulent transactions
`from initiating another transaction. This file is updated by
`payees participating in the system by written notification to
`the service. An employee of the ser