WO 02/071354
`
`PCT/CA02/00272
`
`
`
`uonoesueljennAUCJUBUDIOW
`
`
`
`jeioueul4Kemayesyplededgfeu|Jaluoysny)Tae
`
`
`
`
`
`
`
`
`
`
`
`quawheJ8AI9SJBALISKedaidalegJeHeM-3JaAI8SMAIaIGow
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Aemayeg)(SOL)(SLA)aseqeyeqarsqonJOAI8S(SMW)way}skSauoud
`
`
`
`
`
`
`
`
`
`WT
`
`bE
`
`OF
`
`eb
`
`ss”<s
`
`Ob
`
`Zt
`
`81
`
`2oinbi4
`
`SUBSTITUTE SHEET (RULE 26)
`
`APPL-1002
`APPLEINC./ Page 607 of 1744
`
`APPL-1002
`APPLE INC. / Page 607 of 1744
`
`

`

`(12) INTERNATIONAL APPLICATION PUBLISHED UNDER THE PATENT COOPERATION TREATY(PCT)
`
`(19) World Intellectual Property Organization
`International Bureau
`
`(43) International Publication Date
`13 February 2003 (13.02.2003)
`
`
`
`(10) International Publication Number
`WO 03/012717 Al
`
`(31)
`
`International Patent Classification’:
`
`GO6F 17/60
`
`
`
`CZ, DE, DK, DM, DZ, EC, EE, ES, FI, GB, GD, GE, GH,
`GM, LR, LIU, HD, H., IN, IS, JP, KE, KG, KP, KR, KY, LC,
`LK, LR, LS, IT, LU, LV, MA, MD, MG, MK, MN, Mw,
`(21) International Application Number:©PCT/US01/23899
`MX, MZ, NO, NZ, PL, PT, RO, RU, SD, SE, SG,SI, SK,
`SL, TJ, TM, TR, TT, TZ, UA, UG, UZ, VN, YU, ZA, ZW.
`
`(22)
`
`InternationalFiling Date:
`
`30 July 2001 (30.07.2001)
`
`(25)
`
`Filing Language:
`
`(26)
`
`Publication Language:
`
`English
`
`English
`
`(84)
`
`(71)
`
`[US/US]; Suite 2060, One
`Applicant: C-SAM, INC.
`‘Lower Lane, Oakbrook‘Terrace, I]. 60181 (US).
`
`(72)
`
`Inventor: PITRODA,Satyan, G.; Suite 2060, One Tower
`Lane, Oakbrook ‘Terrace, [IL 60181 (US).
`
`(74)
`
`Agent: SHEKLETON, Gerald, T.; Welsh & Katz, Ltd.,
`120 S. Riverside Plaza, 22nd lloor, Chicago, LL 60606
`(US).
`
`(81)
`
`Designated States (national): AL, AG, AL, AM, AT, AU,
`AZ., BA, BB, BG, BR, BY, BZ, CA, CH, CN, CO, CR, CU,
`
`Designated States (regional): ARIPO patent (GH, GM,
`KE, LS, MW, MZ, SD, SL, SZ, TZ, UG, ZW), Eurasian
`patent (AM, AZ, BY, KG, KZ, MD, RU, TJ, TM), European
`patent (AT, BE, CIT, CY, DE, DK, ES, FI, FR, GB, GR, TF,
`IT, LU, MC, NL, PT, SE, TR), OAPI patent (BF, BJ, CF,
`CG, CI, CM, GA, GN, GQ, GW, ML, MR, NE, SN, TD,
`TG).
`
`Published:
`with international search report
`
`For two-letter codes and other abbreviations, refer to the "Guid-
`ance Notes on Codes andAbbreviations" appearing at the begin-
`ning ofeach regular issue ofthe PCT Gazelle.
`
`(54) Title: SYSTEM FOR DISTRIBUTION AND USE OF VIRTUAL STORED VALUE CARDS
`
`Electronic Pre-paid Distribution System
`
`
`
`WO03/012717Al
`
`\
`1
`\
`Card Payment
`Retail Cash & Creaity
`/
`
`ia. 100
`| =
`py
`Virtual Card Dewnloed
`FProvcrrty
`
`
`
`IuTA
`
`
`Payment / a-up ‘:
`
`
`&
`
`
`
`
`
`
`
`\
`Only Credit Card \,
`Paymant
`—/
`/
`/
`
`ETO
`
`MO Certified Sea
`&Gredit Gard)
`
`404
`
`fpae
`\ Payment
`Server
`= 108 ay
`eNO IL
`
`nal
`MO Prepald
`Sorvor & dB
`
`
`
`
`
`
`
`(57) Abstract: A method of exchanging payment information in an electronic transaction includesa first electronic transaction de-
`vice (106) transferring payment information to a second electronic transaction device (106), the second electronic transaction device
`(104) transferring value informationto the first electronic transaction device (106), and the second electronic transaction device (104)
`transferring value information and payment information to a service consolidation centre (112). A method of tracking retail sales
`of pre-paid telephone cards to cash suhscrihers is also provided. This method comprises entering value purchased information and
`subscriber information in a retailer clectronic transaction devicc (104), the retailer clectronic transaction device (104) transferring
`the value purchased information and subscriber information to a mobile operator (102), and the mobile operator (102) adding value
`corresponding to the value purchased information to an account corresponding to the subscriber information.
`
`APPL-1002
`APPLEINC./ Page 608 of 1744
`
`APPL-1002
`APPLE INC. / Page 608 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`SYSTEM FOR DISTRIBUTION AND USE OF VIRTUAL
`
`STORED VALUE CARDS
`
`BACKGROUND OF THE INVENTION
`This invention relates to a new and improved system for distribution and use
`
`ofvirtual stored value cards. One particular example where the invention may be
`
`usedis in pre-paid virtual cards for mobile voice and data services.
`
`Wireless or mobile phone operators typically have post-pay and pre-paid
`
`subscribers for their voice & data services. Post-pay subscribers pay for airtime they
`
`use at the endofa billing period, typically at a pre-determined rate, once a month.
`
`Pre-paid subscribers, in contrast pay for a pre-set amountofairtime, at a pre-
`
`determined rate, before they start using the airtime purchased. Pre-paid subscribers
`essentially create a stored-value account, from which they can use the minutes that
`
`10
`
`they have purchased. The mobile operator’s system keeps track of the minutes
`
`purchased and subsequently used by pre-paid subscribers and prompts them as their
`
`stored-value amounts near depletion. At this point pre-paid subscribers have the
`
`option to replenish their airtime. The operation of adding more minutesofairtime to
`
`an existing pre-paid accountis typically referred to as the "top-up" or "top-off”
`
`15
`
`operation.
`
`Pre-paid services are one ofthe fastest growing segments of the mobile
`
`telephone operator business (mobile operators or MO). Pre-paid customers require no
`
`credit, no deposits, no contracts, no accountfee, no age limit, but simply a periodic
`
`top up. Pre-paid customers do not need to demonstrate established credit or provide
`
`20
`
`any details to mobile operators.
`
`APPL-1002
`APPLEINC./ Page 609 of 1744
`
`APPL-1002
`APPLE INC. / Page 609 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`Asthe cost of mobile handsets and associated infrastructure has steadily
`
`decreased over time, many markets have seen an exponential increase in mobile users.
`
`As the current trend continues, the number of mobile installations may outgrow
`
`existing landlines. As the mobile handsets improve (hardware - processing power and
`
`memory, software, display — size and resolution, form factor, battery life, etc.) and the
`
`bandwidth offered by the mobile operator’s increase, the new services offered by
`
`mobile operators will increase substantially. Because of decreasing costs of the
`
`handsets and the potential of value added services, mobile operators have been able to
`
`subsidize handset costs and offer pre-paid services to a large number of new
`
`10
`
`customers to increase market share substantially. In some markets pre-paid customers
`
`account for as much as 70 to 80% ofthe total customer base. The pre-paid services
`
`have become popular for several reasons.
`
`Pre-paid subscribers do not have to deal with long-term contracts — an element
`
`typical to a lot of calling plans offered by mobile operators to essentially allow them.
`
`15
`
`to subsidize the cost of the mobile handset. As the cost of handsets has continued to
`
`drop, and also as handset churn rates continue to climb, subscribers have the
`
`opportunity of purchasing second hand devices, further increasing the number of
`
`overall wireless subscribers. Owing to these factors, the mobile operators can now
`
`afford to offer pre-paid calling plans without any rigorous long-term contracts.
`
`20
`
`Since pre-paid calling plans do not require the subscriber to pay the charges at
`
`the end ofthe billing cycle, cash starved subscribers do not have to set aside any
`
`funds. This allows the subscriber to purchase service, without any elaborate
`
`budgeting.
`
`Pre-paid subscribers do not have to deal with any unused airtime on fixed
`
`25
`
`plans. Forinstance, typical plans will have a preset number of minutes of airtime for
`
`APPL-1002
`APPLEINC./ Page 610 of 1744
`
`APPL-1002
`APPLE INC. / Page 610 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`a certain value, which would cxpire at the end ofthe month. Ifthese minutes are not
`
`used, they expire and the subscriber loses the value associated with the unused
`
`airtime.
`
`Pre-paid subscribers do not require a credit account, or in many cases even a
`
`bank account, allowing them to purchasc the service over the counter using cash,at
`
`variousretail outlets and mobile operator certified distribution centers in the form of
`
`“scratch-off”plastic cards. This is ideal for the lower and middle income groups,
`
`students, and also for pre-dominantly cash economies, in emerging markets, where the
`
`pre-paid product has beenvery successful.
`
`10
`
`Mobile Operators (“MO”)typically distribute their handsets (or alternately
`
`SIM cards) to pre-paid subscribers through controlled distribution channels — certified
`
`distribution outlets and/orparticipating retailers. The handsets come with some
`
`airtime preinstalled, as an incentive to the subscriber, and also allowing them to call
`
`the mobile operator to setup and “top-up” an account. The top-up operation to
`
`15
`
`replenishairtime for pre-paid accounts may be accomplished in one ofthe following
`
`ways(Figure 1 and Figure 2):
`
`The subscriber may top-up a pre-paid account by dialing into the MO's
`
`system, using their established payment account — credit, debit, etc. This may be done
`manually by speaking to a MO customerservice representative, by using an
`
`20
`
`automated voice activated response (“VAR”) system, or through the Internet.
`
`To manually top-up a pre-paid account, the subscriber calls an MO customer
`
`service representative, reads the pre-paid account number, andstates the additional
`
`airtime required and the preferred payment method, which involves reading the credit
`
`card account number, expiry date, etc. This typically involves a dedicated session
`
`APPL-1002
`APPLEINC./ Page 611 of 1744
`
`APPL-1002
`APPLE INC. / Page 611 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`between the subscriber and the customer service representative, whichis
`
`cumbersome, labor intensive and expensive.
`
`In contrast, the automated VAR procedure involves dialing into the MO's
`
`system, selecting the number of minutes or airtime required, and entering or setting up
`
`a payment account, typically using the MO's automated voice activated response
`
`system.
`
`Oneofthe channels for top-up is through the Internet. Pre-paid subscribers
`
`may top-up their accounts by connecting to the mobile operator’s pre-paid system
`
`through the Internet, entering a password to access their account and top-up using a
`
`10
`
`credit account.
`
`In addition, a subscriber may setup a new pre-paid account, or alternately top-
`up an existing account by going to a MO certified distribution center. These
`distribution centers may either be a retail environment, or possibly a certified bank
`
`that allows the subscribers to top-up their accounts using their ATM infrastructure or
`
`15
`
`bank checks.
`
`Oneofthe more popular methodsof top-up, especially for people who do not
`
`have a credit card or bank accountor established credit and want to use just cash,
`requires purchasinga plastic card with a code for cash, which typically would be
`scratched off by the purchaser. Thesc cardsare distributed at the retail establishment
`
`20
`
`. — grocery stores, gas stations, etc. - in various denominations such as $10, $20, $50,
`$100, etc., where the subscriber would purchasea plastic card for the amount of
`
`required airtime. This plastic card is distributed in a tamper proof package, and is
`purchased fromaretailer. The subscriber then scratches offthe code, enters this code
`manually through the mobile handset into the MO's system, which in turn replenishes
`
`25
`
`the amountofairtime purchased by the subscriber.
`
`APPL-1002
`APPLEINC./ Page 612 of 1744
`
`APPL-1002
`APPLE INC. / Page 612 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`There are several disadvantages to present methods oftopping-off pre-paid
`
`accounts. The mobile operators’ cost for offering pre-paid airtime is as high as 20-
`
`30%. These costs are essentially incurred at various levels, for printing, packaging
`
`and distributing the cards, commissions for various intermediaries, depending on the
`
`distribution channel and process adopted. The manual system incurs additional labor
`costs, since it requires a dedicated customer service representative to walk the
`
`subscriber through the entire setup and top-up process. Addtothis, the credit card
`
`issuer’s fees for the transaction (“Card Holder Not Present” (CHNP)transactions),
`
`and the overall cost incurred by the mobile operator to support this distribution
`
`10
`
`channel is very high.
`
`The automated VAR channel may reducea fraction of the cost by removing
`
`the labor component from the manual system. But this process has proven to be
`
`extremely cumbersome. Topping-upthe account from the mobile device handsetis
`
`awkward for the user, given the state ofthe handset’s form factor, user interface,
`screen and keypad sizes. Thus, errors occur, especially during the setup operation,
`
`15
`
`when the user must alternatively hold the handset near the ear to hear the VAR system
`
`and then holdit in front of the eyes to dial appropriate numbers. This eventually
`
`drives impatient subscribers to less cumbersomedistribution channels, which in turn
`
`have a higher cost associated to the model for the mobile operator.
`
`20
`
`Certified MO distributors typically provide over-the-counter service for pre-
`paid subscribers, which incursretail costs, in additionto the costs mention above.
`Because there are only a limited numberof certified centers, the overall reach of such
`
`distribution centers is limited. Since many of these certified centers have a direct
`
`hook-up into the MO's back-end system, adding on such centers require more direct
`
`APPL-1002
`APPLEINC./ Page 613 of 1744
`
`APPL-1002
`APPLE INC. / Page 613 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`hook-ups, increasing the potential of fraud andaddsto the accounting and inventory
`
`management costs.
`
`Neutral distributors who support several mobile operators’ products, typically
`charge a high margin for shelfspace, increasing the distribution cost for the mobile
`
`operator.
`
`Oneof the most popular channels of distribution for pre-paid productsis
`
`through existing retail distribution channels - gas stations, grocery and department
`
`stores, etc. The reach of these channels, along with the ability to use cash, are the top
`most reasons forits popularity, but are also the most expensive for the mobile
`
`10
`
`operator to suppott.
`
`The mobile operator incurs some cost for producing the plastic cards,
`
`packaging and distributing them. In addition, the mobile operator incurs costs for
`tracking and managing physical inventory, ironically for a non-physicalor virtual
`
`product such as airtime.
`
`15
`
`Retailers charge the mobile operators a very high marginfor the distribution of
`
`these plastic cards, as they take up expensive shelf space. These margins form one of
`the integral components ofthe overall costs incurred by the mobile operator for the
`
`distribution of plastic pre-paid cards. Cash handling expenses, and credit card fees
`
`add to the overall cost, along with other cost elements typical to a retail environment.
`
`20
`
`Regarding transactionsin general, the cost of a transaction, in the existing
`
`credit or debit environments supported by the widely accepted banking networks,
`
`typically ranges between 1.2 to 5.0% ofthe transaction, plus an additional 10 to 35
`
`cents. The cost these transactions renders existing credit and debit transaction systems
`
`impractical for “sub to single digit dollar” transactions, typically referred to as micro-
`payments. Many iransactions, especially proximity transactions for applications such
`
`25
`
`APPL-1002
`APPLEINC./ Page 614 of 1744
`
`APPL-1002
`APPLE INC. / Page 614 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`as vending machines, toll, parking andtransit, fall under this category which could be
`well supported by a stored cash value payment system.
`
`The current stored value payment systemsare inefficient, due to the lack of
`
`interoperability across payment worlds and end to end security. Consequently, the
`existing stored value payment systems have not been able to successfully cater to the
`
`eCommerce and mCommerce environments.In the brick and mortar retail
`environment, again the lack ofa truly global interoperable and secure system has been
`responsible for less acceptance by merchants and consequently less penetration
`among users. The existing systems have also failed to provide an effective payment
`system for minors, who typically do not qualify for a credit or debit card, for credit
`
`10
`
`challenged individuals and for person to person transactions.
`
`Because existing credit and debit transaction systems are impractical for
`
`micropayments, cash is the predominant form of payment. Cash may be
`
`cumbersome, subject to theft or loss, and in some cases owingto the lack of local
`
`15
`
`currency, impractical and extremely inconvenient. In terms of the merchants, owing to
`the high potential of fraud andtheft, cash transactions are associated with a very high
`
`cost of handling and collection. Thus need exists for a suitable payment system to
`
`address the above outlined issues, and at the same time reduce cash transactions for
`
`the convenience of the users and merchants alike.
`DESCRIPTION OF THE DRAWINGS
`
`20
`
`Figure 1 is a diagram of a prior-art pre-paid distribution system.
`
`Figure 2 is a flow chart of a prior art pre-paid distribution system.
`Figure 3 is a diagram depicting a preferred embodiments ofthe electronic pre-
`
`paid distribution system of the present invention.
`
`APPL-1002
`APPLEINC./ Page 615 of 1744
`
`APPL-1002
`APPLE INC. / Page 615 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`Figure 4 is a diagram depicting a preferred embodiment of the Retail & MO
`
`Certified Cash & Credit Card Paymentof the present invention.
`
`Figure 5 is a diagram depicting a preferred embodiment of the Retail & MO
`
`Certified Cash & Credit Card Payment Through MO Networkofthe present
`
`invention.
`
`Figure 6 is a diagram depicting a preferred embodiment of the Retail & MO
`
`Certified Cash & Credit Card Payment Through Proximity ofthe present invention.
`
`Figure 7 is a diagram depicting a preferred embodiment ofthe Only Credit
`
`Card Paymentof the present invention.
`
`10
`
`Figure 8 is a diagram depicting a preferred embodiment ofthe Only Credit
`
`Card Payment Setup Sequence Flow Chart of the present invention.
`
`Figure 9 is a diagram depicting a preferred embodiment of the Only Credit
`
`Card Payment “Top-Off” Sequence Flow Chart ofthe present invention.
`
`Figure 10 is a diagram depicting a preferred embodiment ofthe Only Credit
`
`15
`
`Card Payment Sample User Interfaces is ofthe present invention.
`
`Figure 11 is a diagram depicting a preferred embodiment ofthe Only Credit
`
`Card Payment Sample UserInterfaces ofthe present invention.
`
`_ Figure 12 is a diagram depicting a preferred embodiment of the Merchant
`Wallet Architecture ofthe present invention.
`|
`Figure 13 is a diagram depicting a preferred embodiment of the Merchant
`
`20
`
`Wallet Sample UserInterfaces is of the present invention.
`
`Figure 14 is a diagram depicting a preferred embodiment ofthe Wallet Service
`
`Center Value Added Services of the present invention.
`
`Figure 15 is a diagram of examplesof virtual card generation and download.
`
`25
`
`Figure 16 is a diagram of a stored value application ofthe present invention.
`
`APPL-1002
`APPLEINC./ Page 616 of 1744
`
`APPL-1002
`APPLE INC. / Page 616 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`Figure 17 is a diagram of a preferred embodiment of a stored value transaction
`
`system Through MO Network ofthe present invention.
`
`Figure 18 is a flow chart of a preferred embodiment of a stored value
`
`transaction system Through MO Network of the present invention.
`
`Figure 19 is a diagram of a stored value transaction system proximity model of
`the present invention.
`|
`Figure 20 is a flow chart of a preferred embodiment of a stored value
`
`transaction system of the present invention.
`
`Figure 21 is a diagram of a multiple MO example of the present invention.
`
`10
`
`Figure 22 is a diagram of examplesof user interfaces for a multiple MO
`
`environment of the present invention.
`Figure 23 is a diagram ofan Existing Transaction System and a Wireless
`
`Transaction System.
`
`DETAILED DESCRIPTION OF A PREFERRED EMBODIMENT
`
`For purposes ofreference, Figures 1 and 2 are diagramsthat generally depict
`various aspects ofprior art distribution ofpre-paid air time. Figure 1 showsexisting
`channels ofdistribution for pre-paid airtime, the setup and top-up operations using a
`
`mobile handset and the mobile operator’s manualor automated systems, using the
`
`mobilc operator certified locations andthe retail outlet model to procure plastic pre-
`
`paid “scratch-off cards.”
`Figure 2 is a flowchart depicting current distribution processes for a mobile
`handset with pre-paid airtime.
`|
`As shown in Figure 1, MO Network 20 includes MO Switch 22 and MO Pre-
`paid Server and Database 24. MO Certified Distribution Center 26 is coupled to the
`MOPre-paid Server and Database 24. MO Subscriber Handset 28 is in electronic
`
`15
`
`20
`
`25
`
`APPL-1002
`APPLEINC./ Page 617 of 1744
`
`APPL-1002
`APPLE INC. / Page 617 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`communication with MO Switch 22. Pre-paid Plastic Card Retail Distribution
`
`Centers 30 are not connected to the MO Network 20. MO Subscribers may connect to
`the MO Network 20 by way of a Computer 32 connected to the Internet 34.
`Figure 3 illustrates examples ofthe pre-paid distribution systems of the
`
`present invention. A MO Subscriber Handset 102 may be topped up by way of an
`
`electronic transaction device (ETD) adapted to the functions of a Merchant
`
`(hereinafter Merchant ETD 104). Electronic transaction devices include, but are not
`
`limited to, devices such as the Universal Electronic Transaction Card as disclosed in
`
`U.S. Patent Nos. 5,590,038 and 5,884,271, which are incorporated by reference. To
`
`10
`
`facilitate the transaction. the MO Subscriber may also have a MO Subscriber ETD
`
`106 adapted to communicate with the Merchant ETD 104, The MO Subscriber ETD
`
`106. It may be a separate deviceasillustrated, or it may be embedded in the MO
`
`Subscriber Handset 102. Alternatively, the subscriber may communicate with
`
`Merchant ETD 104asillustrated in Figures 12, 13, and 14. The Merchant ETD 104 is
`
`is
`
`in electronic communication with MO Network 108. MO network 108 includes MO
`
`Switch 110, Wallet Service Centers 112, MO Pre-paid Server 1 14, and Payment
`
`Server 116.
`
`Figure 3 illustrates three examples ofthe invention. The first example, which
`
`is labeled “Retail Cash & Credit Card Payment," permits the MO,using a Merchant
`
`20
`
`ETD 104,to distribute pre-paid airtime by taking cash or credit cards, debit cards, etc.
`
`from their customers. This typically relates to retail environment —grocery stores, gas
`
`stations, departmentstores, etc. - where a merchant using the Merchant ETD 104 may
`
`distribute pre-paid airtime using the MOs network or a proximity method.
`
`The merchant enters relevant information into the Merchant ETD 104, such as
`
`25
`
`value purchased information and subscriber information. Value purchased
`
`10
`
`APPL-1002
`APPLEINC./ Page 618 of 1744
`
`APPL-1002
`APPLE INC. / Page 618 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`information includes, for example, the quantity ofairtime purchased, the quantity of
`funds transferred, mode of payment(i.e., cash, credit, or other form of payment),
`
`authorization information, or other like information. Subscriber information includes,
`
`for example, an identification of a person providing a payment (including cash
`
`transactions), a telephone numberfor the MO subscriber handset, or other such
`
`information. Oncethe informationis entered, the merchant transmits it in a secured
`
`manner to MO Switch 110, which, in turn transmits it to a payment consolidation
`
`center, such as Wallet Service Center ("WSC") 112 (See Figs. 4, 14). The WSC 112
`
`authenticates the MO Subscriber Handset 102 and tops-up the MOsPre-paid Server
`
`10
`
`114. The MO will then send a message, for example, a Short Message Service (SMS)
`message, to the MO Subscriber Handset 102 updating the available airtime. This
`method maybe used with existing generation mobile handsets.
`
`The Retail Cash & Credit Card Payment example also illustrates an example
`
`involving the transmission ofa “virtual card” to the distribution outlets and,
`
`15
`
`subsequently, to MO Subscriber Handsets 102. The MO distributes virtual pre-paid
`
`cards to distribution outlets, using the Wallet Service Center 112 and Merchant ETDs
`
`104 at the respective distribution centers. The virtual cards may be distributed
`
`wirelessly and securely. The distribution outlet may use the Merchant ETD 104, upon
`
`paymentfor airtime, to directly “beam” into the MO Subscriber Handset 102 a virtual
`pre-paid card. "Beaming" may be accomplished using infrared, such as IrDA,
`
`20
`
`proximity RF, or other suitable transmission protocols and circuits. For a secure
`
`transmission of the virtual pre-paid card from the Merchant ETD 104 to the MO
`
`Subscriber Handset 102, an electronic transaction device application may be installed
`
`on the MO Subscriber Handset 102. A MO Subscriber Handset 102 with an
`electronic transaction device application can also beam the paymentdirectly into the
`
`25
`
`11
`
`APPL-1002
`APPLEINC./ Page 619 of 1744
`
`APPL-1002
`APPLE INC. / Page 619 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`Merchant ETD 104,using either a stored value account, or an existing credit, debit,
`
`bank card, etc. account. The electronic transaction device application may store the
`
`transaction record, and upload the records to a custom transaction portal at the WSC
`
`112.
`
`The example labeled as “MOCertified Cash & Credit Card Payment” allows
`
`subscribers to replenish their pre-paid airtime using the same methodsdetailed above
`
`— i.e. using the MOsnetworkor the proximity method. This example differs from the
`
`Retail Cash & Credit Card Payment in that the MOcertified centers of distribution
`
`includes banks, ATM’s, and other special outlets. Additionally, a Merchant ETD
`local database 118 is coupled to the MO Network 108. As outlined in Figure 3, these
`
`10
`
`centers may also be equipped with Merchant ETDs 104. Subscribers with a regular
`
`mobile handset may top-up their pre-paid accounts using the MO network,and those
`
`with the electronic transaction device application installed may use the proximity
`
`methodto top-up their pre-paid account. The Merchant ETD local database 118
`
`15
`
`allows the merchantto perform batch transactions, and allows the merchant to
`
`compile the subscriber usage informationlocally.
`
`The Merchant ETD 104 is equipped to conduct a real-time, or batch mode
`
`transaction, for both the proximity method and the method using the MO network.
`
`The Merchant ETD local database 118 may have a wired or wireless connection with
`
`20
`
`the Merchant ETD 104, or may be connectedto a local area network (LAN)
`
`associated with a merchant. Where the MOcertified distributors havea direct
`
`interface with the MO's pre-paid server and database, the Merchant ETD 104
`
`integrates into their existing LAN structure.
`
`In additional embodiments, the Merchant ETD 104 may be distributed to non
`
`25
`
`traditional distribution outlets, such as taxi drivers, where the backend authentication
`
`12
`
`APPL-1002
`APPLEINC./ Page 620 of 1744
`
`APPL-1002
`APPLE INC. / Page 620 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`hook-up may be wireless. The contemplated non-traditional distribution outlets
`
`would havethe ability to do real-time or batch transactions.
`
`The example labeled “Only Credit Card Payment,” demonstrates the setup and
`
`top-up operations using a MO Subscriber Handset 102 having an embedded MO
`
`Subscriber ETD 106 and the MOs automated system for setup and top-up operations
`
`for pre-paid airtime. The electronic transaction device application userinterface
`provides the MO subscriber with a user-friendly device to complete the setup and top-
`up operations for pre-paidairtime accounts. In one example, the electronic
`transaction device application may be configured to store payment information locally
`
`10
`
`on the mobile handset and send paymentinformation (credit card or debit card details,
`etc.) every time a transaction is conducted. This information is securely sent to the
`WSC,through the MO switch, and to the respective paymentservers and MO pre-
`paid server and database. Based on this process, the transaction may be considered a
`“Curd Holder Present Transaction.” Card Holder Present Transactions typically have
`
`15
`
`lower processing fees than Card Holder Not Present Transactions.
`Figure 4 illustrates in more detail the Retail & MOCertified Cash & Credit
`
`Card Payment” example. The MO Subscriber Handset 102 may be configured with
`
`the electronic transaction device application (i.c., embedded MO Subscriber ETD
`
`106). Electronic communication, such as via proximity RF (such as Bluetooth) or
`Infra Red (such as IrDA)is established with the Merchant ETD 104. The Merchant
`
`20
`
`ETD 104is in electronic communication, preferably wireless communication, with
`
`MO Gateway. The MO Gatewayis coupled to the WSC. The WSCincludes, for
`
`example, an interface and security module 122, having a MOInterface 124, a
`paymentserver interface 126, a content provider, interface 128, and a Merchant
`interface 130, the interface and security module 122 is coupled to a transaction portal
`
`25
`
`13
`
`APPL-1002
`APPLEINC./ Page 621 of 1744
`
`APPL-1002
`APPLE INC. / Page 621 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`132. The transaction portal 132 is coupled to a addedservices module 134, which is
`
`coupled to a profile engine 136. Theprofile engine 136 interfaces with databases 138
`such as a MO database 138, a Subscriber database 140, and a Merchant database 142.
`
`Figure 5 is a process flow-chart for the pre-paid applicationin a retail and MO
`
`certified environment, using either cash or credit cards as the form of payment, using
`
`the mobile operator’s network. In step 150, the MO Subscriber gives the Merchant
`
`ETD 104 equippedretailer cash or a credit card and a telephone numberofthe MO
`Subscriber Handset. In step 152, the Retailer enters the telephone number and desired
`
`amountof the service to purchase. Alternatively, steps 150 and 152 may be
`
`10
`
`performed electronically ifthe MO Subscriber Handset 102 includes the electronic
`
`transaction device application. In step 154, the Merchant ETD 104 may connectto
`
`the MO switch by dialing the MO or otherwise setting up communication over
`
`available data exchange formats, such as conventional CDPD, TDMA, CDMA and
`
`GSM formats, to connect to the WSC. In step 156, the WSC authenticates the MO
`Subscriber and updates the MO Pre-paid Server. Additionally, the WSC updates
`
`15
`
`databasesforthe retailer, MO Subscriber, and MO. In step 158,the MOsends
`
`confirmation to the MO Subscriber, which may be by way of SMS(Short Message
`
`Service), and in step 160 the Merchant acknowledges payment.
`Figure6 is a flow-chart, for illustrating one example pre-paid application in a
`
`20
`
`retail or MO certified environment, using either cash or credit cards as the form of
`
`payment, using the proximity transmission method. In step 162, the MO distributes
`virtual pre-paid cards merchants. In the illustrated example, the virtual pre-paid cards
`are distributed by the WSC to Merchant ETD 104s wirelessly. In step 164, the MO
`
`Subscriber may purchase a Virtual Card by electronically communicating cash or
`
`25
`
`credit card information from the MO Subscriber Handset 102 to the Merchant ETD.
`
`14
`
`APPL-1002
`APPLEINC./ Page 622 of 1744
`
`APPL-1002
`APPLE INC. / Page 622 of 1744
`
`

`

`WO 03/012717
`
`PCT/US01/23899
`
`The electronic communication may be proximity RF or Infra Red optical. In step 166,
`
`the Merchantelectronically transfers the Virtual Card to the MO Subscriber's
`
`Handset. A receipt may be included with the Virtual Card transfer. In step 168, the
`
`Merchant ETD 104 sends information pertaining to the Virtual Card transaction to the
`
`MOServer by way of the WSC. In step 170, the MO updates the value in the MO
`
`subscriber's account. In step 172, the WSC updates databases such as the Merchant
`
`database, the MO database, and the MO Subscriber database. In step 174, the
`
`electronic transaction device application on the MO handset may also update the
`
`available airtime and payment records. This example requires the MO Subscriber
`
`10
`
`Handset 102 to be infra red or proximity RF enabled devices(the process flow-charts
`
`in Figures 5 & 6 relate to the configuration described in Figures 3 & 4).
`Figure 7 is a more detailed illustration ofthe “Only Credit Card Payment”
`example for pre-paid applications. The MO Subscriber Handset 102, including the
`electronic transaction device application, is in direct communication with the MO
`
`15
`
`switch. The MO switch is coupled to the WSC by MO switch 110 The WSC
`
`includes, for example, interface and security module 122, coupled to the MO interface
`
`124, paymentserver interface 126, Content Provider Interface 128 and Merchant
`
`Interface 130. The interface and security module 122 is coupled to transaction portal