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This invention - scratch cash - presents a new secure method for payment of goods and services. This invention details:

• Methods for generating scratch cash
• Wholesale-Retail-Consumer chain for distributing scratch cash
• Interfaces for using scratch cash including web and email enabled devices, bar code readers and telephony.
• Security profile of scratch cash and methods for fraud prevention
• Limits to consumer exposure and how to insure against loss, theft or fraud

The invention advances state of the art by presenting methods to:

• Conduct e-commerce without requiring consumers to acquire any new technology such as digital certificates or smart cards.
• Consumer privacy and anonymity is guaranteed. Consumers do not have to identify themselves to purchase scratch cash.
• Consumers willing to identify can be insured; any lost or stolen scratch cash not used can be cancelled and the consumer can be issued with replacement scratch cash. Consumers with accounts receive periodic statements for transactions.
• Exact change for purchasing is supported by updating the value of a scratch.
• The status and any transactions against a scratch will be available for auditing.
• Scratch cash can be made globally convertible via scratch exchanges.
• Scratch cash minimises interest payments for consumers and merchants alike. Scratch cash by default is prepaid to merchants and direct debit to consumers but the distribution chain may enable credit days.
• Scratch cash has the physical security features of any normal fiscal instrument such as a bank note and but also has a character sequence known only to the consumer and merchant at the time of its use. The probability of being able to forge this sequence is proven to be extremely low.
• Scratch cash production and operational backend have among the lowest cost of all methods of payment that involve physical materials, namely being a paper or polymer card.
• Scratch cash use for vending machines, shops, super markets, and direct payments from consumer over the Internet is presented, and as an additional method of payment for Patent Application No. 09/113,344 'Method for Integrating Internet SMTP Electronic Messaging with Postal Services'.
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References

U.S. Patent Documents

1. Patent application No. 09/113,344, July 1998, Ben Livson, 'Method for Integrating Internet SMTP Electronic Messaging with Postal Services'.
2. ….

1. A new universal method - 'scratch cash' - for secure payment of goods and services to handle multiple payment interfaces selected from the group consisting of any web-enabled device, e-mail client, barcode readers connected to the Internet or (virtual) private network and telephony, whereby a consumer retains complete privacy and anonymity, whereby a consumer may purchase scratch cash from any approved retail outlet, whereby no change is required to the normal wholesale-retail-consumer distribution chain, whereby a consumer is e-commerce enabled without having to purchase any new technology such as certificates or smart card readers, whereby a merchant is secured by scratch cash being by default prepaid, and whereby a consumer's risk is limited to the amount of scratch cash purchased.
2. Scratch cash of claim 1 is protected by a randomly generated character sequence - the scratch - with a probability of fraud being less than b/(m^l) where l=length of scratch sequence typically varying up to 20, m=size of scratch character set typically between 70-80, and b=block size for scratch nominations typically being less than a billion, thus yielding an extremely low probability typically in the order of 10^-20 or smaller for criminals to be able to generate a valid scratch combination. The inventors claim scratch cash as (one of) the most secure methods of payment.

3. Consumers of claim 1 willing to identify can be insured; any lost or stolen scratch cash not already used can be cancelled and the consumer can be issued with replacement scratch cash.
4. Retailers and (larger business) consumers of claim 1 will have scratch cash accounts enabling them to receive periodic transaction statements, credit days, and other benefits.

 

5. Consumers of claim 1 can be issued exact change for a purchase by reducing the monetary value of a scratch sequence. The status and any transactions against a scratch will be available for consumer inquiries and for auditing purposes.
6. Consumers of claim 1 can be offered discounts and prizes.
7. Merchants of claim 1 may offer retailers and larger subscription based consumers credit days for settling their scratch cash purchases whereas by default scratch cash is prepaid.
8. Scratch cash stamps of claim 1 extend Patent Application No. 09/113,344 'Method for Integrating Internet SMTP Electronic Messaging with Postal Services' by enabling a subscription-less method of payment with scratch stamps sold by post offices and other authorised agents the same way as postal stamps are sold.
9. Merchants forming scratch cash exchanges can make scratch cash of claim 1 globally convertible.

ABSTRACT *

References *

Claims *

Background -- Field of Invention *

Background -- Description of the Prior Art *

Drawing Figures *

Summary *

Detailed Description of the Invention *

Table 1. Minimum Set of Scratch Cash Database Attributes *

Principles of Fraud Prevention *

User Interfaces for Scratch Cash Payments *

Scratch Cash Exchange *

Extensions to the Scratch Cash Method of Payment for Electronic Commerce *

This invention simplifies electronic commerce and lowers barriers of entry. Methods are presented for a subscription-less model of e-commerce. The present invention relates to a new method of payment for electronic commerce that uses pre-purchased monetary units, and in particular to a 'scratch cash' card containing a set of sequences which are correlated to pre-purchased units of money, and may be used as such following an identification/validation procedure.

Large segments of the population are still deterred from 'revealing their credit card over the Internet' regardless of whether their concerns are justified or not. Credit cards being multiple use devices can thus be abused for a period until the unauthorised transactions are detected. Transactions on the Internet are especially vulnerable to this type of fraud as the credit card holder has not lost her card and is not aware that purchases are being made in her name.

E-commerce merchants including the major credit-debit card companies are in the process of employing sophisticated technology using Public Key Infrastructure encryption, digital certificates and signatures all subject to rigorous audits to increase people's trust.

People have major privacy concerns about revealing their spending habits, financial exposure, fear of identifying for loss of civil liberties, receiving unsolicited advertising, junk mail, and fear of fraud in the consumer-merchant relationship are magnified by introduction of e-commerce.

This invention establishes a method for people to remain incognito and use prepaid equivalents of cash called scratch cash, thus limiting their exposure. The method is a win-win with merchants benefiting from issuing prepaid scratch cash. The method is highly tamper proof and does not require any sophisticated technology such as smart cards and digital certificates.

Scratch cash can be used to purchase any product or service that has a scratch cash merchant that uses the methods of this patent application.

Postal services are a prime example of old institutions undergoing a true revolution. U.S. Postal Services already has licensed half-a-dozen companies to digital franking and metering over Internet including E-Stamp, StampMarker and Pitney-Bowes. Patent application No. 09/113,344, July, 1998, Ben Livson, 'Method for Integrating Internet SMTP Electronic Messaging with Postal Services advances state of the art by automating the whole process of distribution, print-on demand, insertion, enveloping, franking and metering.

The big challenge for commerce is to manage the successful transition from traditional commerce into e-commerce. This invention presents a bridge from traditional commerce to e-commerce transparent to many consumers and for others already using email or web-devices by natural means not involving use of credit cards - the fear and barriers of entry are reduced or removed to many for using electronic commerce. Consumers are exempt from purchasing or using any new technology and no learning curve is required.

Figure 1 shows a Front Side of a $30.00 card ($300.00 total).

Figure 2 shows a Rear Side of a $30.00 card (10 scratches = $300.00 total)

Figure 3 shows scratch cash context diagram

Figure 4 shows scratch cash end to end process tree

Figure 5 shows the consumer and merchant processes for scratch cash purchase

Figure 6 shows the process for scratch cash generation

Figure 7 highlights scratch cash account processes

Table 1 describes a minimum set of scratch cash database attributes

This invention presents a completely new method, scratch cash, for payment of goods and services. Scratch cash is a paper/polymer card showing the merchant site, monetary value of each scratch, and the hidden scratch surface has a bar code and a corresponding character sequence as the key to using the value.
This invention describes how scratch money is generated, its chain of distribution, usage, security profile and fraud prevention measures. This invention is a break-through for e-commerce enabling consumers to conduct secure e-commerce without requiring any additional technology such as certificates or smart cards, and without requiring consumers to reveal their identity. Consumers using smart cash maintain their privacy and anonymity, and avoid risks such as using credit cards for e-commerce.

It is a paper/polymer card sold in a retail market, similar to that of phone-cards and postal stamps. The card is issued in any number of denominations from 20c to $100.00 or higher multiples similar to but not necessarily the same as bank note denominations. The face of the card is marketed with "collectible" type images, such as that of a phone card.

Higher value denominations carry a hologram, water marking or other techniques to make forgery harder. The main defence against fraud, however, is the character sequence of scratch cash. The probability formulated below for being able to generate a correct scratch sequence is extremely low, thus making scratch cash as tamper proof as the best bank note or electronic certificate technology but yet being significantly cheaper and simpler to manufacture and distribute.

The rear of the card contains multiple scratch lottery style boxes, generally 10 on each card. These boxes contain a unique sequence of alphanumeric, upper and lower case characters and an equivalent three-dimensional barcode containing this unique character sequence. The card would also contain merchant ID, card ID and a merchant web-site URL:

Figure 1: Example Front Side of a $30.00 card ($300.00 total).

Figure 2: Example Rear Side of a $30.00 card (10 scratches = $300.00 total).

Note: 1^st number scratched and exposed for use.

Consumers purchase scratch cash card cards over the counter at places such as newsagents, Post Offices etc. The unique sequence of characters is covered by the removable (scratch) material and is therefore hidden.

Patent Application No. 09/113,344 'Method for Integrating Internet SMTP Electronic Messaging with Postal Services' enables integration with scratch cash stamps. Postal Services will be able to sell scratch cash stamps over the counter the same way any other stamp is sold. Scratch cash extends the subscription based billing methods listed by patent application No. 09/113,344 to include subscription-less billing that is conceptually akin to a postal stamp, and thus a lot easier for postal services to implement.

For example: An Internet email user who wishes to send an email through the Australian postal system enters the email address as postal-address@post.au.

This email is routed to the post's hybrid messaging system where the address is interpreted, analysed and electronically re-routed to the printing centre for hybrid mail nearest to the destination address, it is then printed and enveloped in one pass and delivered to the addressee through the standard postal service.

The scratch stamp is used to pay for this service. This information is then analysed by the postal service systems to validate the unique character sequence and subsequently flags the scratch value as used. Once used this character sequence will not be available (for a retention period).

How can one use scratch cash for payment of hybrid messaging to convert email into postal letter services? There are two scenarios:

1. The easier scenario is when a web-interface is used. The web will assist in enforcing addresses to translate into a valid Delivery Point Identifier DPID and will have a rate calculator that provides the user with the lowest cost combination of scratch cash required. For example a 6-page black and white printout might cost $1.50. The user is instructed to peel off a $1 scratch cash stamp and 50c scratch cash stamp and enter the scratch combinations into the web-form.
2. Email-interface will support scratch cash included the message body. The format will be of the form: #scratch₁[.scratch₂…scratch_n]# where the $1 and 50c scratch cash stamps may be input in whatever order.
   The hybrid mail envelop will get the email address and display name if the postal address translates into a valid Delivery Point Identifier (DPID). If so, then the scratch cash stamps are automatically marked as used in the database. However, if the address does not translate into DPID, the user is sent a notification of addressing failure and the scratch cash can be reused.

Scratch sequences cannot be part of the e-mail headers as headers are transmitted in the clear whereas the body and attachments of a secure S-MIME message can be encrypted.

Hybrid messaging can return exact change by allocating a residual scratch value scratch for the difference. This is a saving to consumers and eliminates waste with traditional stamps. The consumer benefits further by having to pay only for valid addresses unlike traditional mail where a stamp cannot be reused if the letter is not properly addressed.

The above method of placing scratch sequences in the body of a secure structured message enables payment of any goods or services. The merchant establishes the additional information required in such secure structured messages for payment.