Method and system for managing and conducting a network auction

Abstract

There is described a method and system for managing Internet auction transactions by creating an auction website by, for example, a financial institution. The auction website is accessible by the financial institution's account holders (e.g., holders of checking, savings, credit card, and investment accounts). Thus, all buyers and sellers in auction transactions on the auction site, for example, have accounts with the financial institution, with settlements occurring between the accounts of the users at the financial institution. Payments are debited from the buyer's account(s) with a credit going to the account of the seller, less any fees. All charges occur internally, so no interchange is owed, for example, to a card association in connection with a transaction. Financial institution customers benefit from the system in that buyers and sellers are authenticated and settlement occurs almost instantaneously.

Description

CROSS-REFERENCE TO RELATED APPLICATIONS [0001] This application is a continuation of, claims priority to, and incorporates by reference in its entirety, U.S. patent application Ser. No. 09 / 610,540, entitled “METHOD AND SYSTEM FOR MANAGING AND CONDUCTING A NETWORK AUCTION,” filed Jul. 7, 2000 which claims priority to and incorporates by reference in its entirety, U.S. Provisional Patent Application No. 60 / 143,021, filed Jul. 9, 1999.BACKGROUND OF THE INVENTION [0002] 1. Field of the Invention [0003] The present invention relates generally to the field of electronic commerce and more particularly to a method and system for managing person-to-person payment transactions, including auction transactions, over a network, such as the Internet. [0004] 2. Description of the Related Art [0005] Currently, person-to-person payment transactions are conventionally performed using, for example, cash, personal checks, a money order or the like. Using any one of these traditional payment methods at ...

AI Technical Summary

Benefits of technology

[0014] It is a feature and advantage of the present invention to provide a method and system for managing auction transactions over the Internet which removes the risk of non-authentic buyers and sellers by authenticating the buyer and seller in a transaction from the buyer's and seller's account information, respectively.

[0015] It is a further feature and advantage of the present invention to provide a method and system for managing Internet auction transactions which avoids the risk of non-payment and delayed shipment of good(s) by settling the transaction on accounts of the buyer and seller in the transaction.

Problems solved by technology

Using any one of these traditional payment methods at least one party to the transaction assumes certain risks.

The seller may be able to decrease his / her chance of loss, by holding onto the good(s) until the check clears, but this then causes a delay to the buyer who must wait for the check to clear prior to receiving his / her paid for good(s).

Further, since payments for an on-line auction purchase are actually being made person-to-person via check or money order, it takes an inordinate amount of time to clear checks through the current Automated Clearing House (ACH) systems, which slows down the purchasing process considerably via the on-line auction context.

It is also possible for someone to use another party's e-mail address on an unauthorized basis, and e-mail addresses are commonly stolen and used without the owner's authorization.

In short, there are no guarantees associated with an e-mail address as to any identifying characteristics (e.g., age, gender, status) of the user of the e-mail address.

Rather, they are simply individuals, and when they sell something, they are not usually equipped to receive payment by any means (e.g., credit card) other than by check, money order, or the like.

This causes inconveniences for both parties, since the buyer must actually write a check or obtain a money order and then the buyer must wait until the seller is satisfied that the check will clear, etc., before the good(s) are transferred.

It is readily apparent that when the buyer sends the check or money order to the seller, the buyer takes a substantial risk that the seller actually exists and / or that the buyer will actually receive the good(s) for which the buyer has paid.

However, if the buyer pays by personal check, the seller typically waits several weeks for the check to clear before packaging and shipping the good(s).

Accordingly, there is currently a tremendous amount of uncertainty in Internet auction transactions, for example, as to whether buyers or sellers really exist.

There is likewise also considerable uncertainty as to whether or not buyers will pay, and if they do pay, whether the payment funds are good.

Further, if the funds are good, there is a tremendous amount of uncertainty about whether the buyer will actually get the merchandise for which the funds were paid.

The seller's risk lies, for example, in putting the seller's merchandise up for auction and receiving a winning bid, and waiting a month or more to discover that the buyer does not exist or sent bad funds for payment.

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