referring to fig1 a network 10 includes a merchant &# 39 ; s computer system 12 linked via a wide area network ( wan ) 14 to a customer identification , loyalty and merchant payment gateway server 16 . the computer system 12 includes a controller 18 linked to point of sale payment input devices 20 , 22 . example point of sale payment input devices are credit card readers , debit / atm card readers , smart card readers and radio frequency identification ( rfid ) tag readers . input from the point of sale input devices 20 , 22 is received by the controller 18 and sent via the wan 14 to the customer identification , loyalty and merchant payment gateway server 16 . the controller 18 manages messaging between the host 16 and a correct point of sale input device 20 , 22 . the controller 18 also monitors network connectivity . while the network 10 is down , the controller 18 messages and reduces point of sale functionality . for example , during failed network conditions , the controller 18 may not allow redemptions but may allow adding points or money . when the network 10 comes back up , the controller 18 stores and forwards allowable transactions and auto uploads the information to the host 16 at a later time . the networks 10 includes a consumer system 24 and a merchant system 26 linked to the customer identification , loyalty and merchant payment gateway system 16 through the internet 28 . payment information received from a user ( not shown ) on the customer system 24 is transmitted to the customer identification , loyalty and merchant payment gateway system server 16 via the internet 28 . input received from a user ( not shown ) on the merchant system 26 is transmitted to the customer identification , loyalty and merchant payment gateway system 16 via the internet 28 . the customer identification , loyalty and merchant payment gateway system 16 includes a local storage device 30 storing a database 32 . the customer identification , loyalty and merchant payment gateway system 16 also includes multiple links 34 , 36 , 38 , 34 to respective payment networks 42 , 44 , 46 , 48 . the customer identification , loyalty and merchant payment gateway server 16 is flexible and may be connected to any payment network and any point of sale payment device connected to a controller . as is described below , the customer identification , loyalty and merchant payment gateway server 16 uses a given payment device , e . g ., payment device 20 , to authenticate an identity of a buyer and coordinate payment processing through the preferred payment network 42 , 44 , 46 or 48 . the customer identification , loyalty and merchant payment gateway server 16 uses a pay database 32 to approve a buyer &# 39 ; s purchases , making response time greater than seeking approval from one of the payment networks 42 , 44 , 46 , 48 . referring to fig2 the customer identification , loyalty and merchant payment gateway server 16 includes a processor 50 , a memory 52 , and the storage device 30 . memory 52 includes an operating system ( o / s ) 56 , such as linux or microsoft windows xp , a tcp / ip stack 58 for interacting with the internet 28 , and instructions to execute a merchant payment process 100 . referring to fig3 the merchant payment process 100 includes a maintenance and reporting stage 102 , a rules engine 104 , an identification and authentication stage 106 , a transaction stage 108 and a payment manager 110 . the maintenance and reporting stage 102 is responsible for the maintenance of the customer identification , loyalty and merchant payment gateway server 16 and preparing transaction reports . a seller is given complete and accurate reporting because all payment transactions in the network 10 , independent of the customer contact point and payment network , pass through the merchant gateway server 16 , and specifically the merchant payment process 100 . more specifically , the maintenance and reporting stage 102 manages generation of preferred payment information , reset of preferred payment information , reporting and reconciliation of payments with payment networks 42 , 44 , 46 , 48 , and reporting and reconciliation of payments with an enterprise resource planning ( erp ) system ( if installed ). the rules engine 104 allows a seller to customize how the merchant payment process 100 handles their specific needs and the needs of their customers . for example , the rules engine 104 may be used to implement spending limits for individual customers , select different payment networks 42 , 44 , 46 , 48 for given transaction sizes , or to require a buyer to enter a personal identification number ( pin ) if a transaction is over a selected amount . more specifically , the rules engine 104 executes in conjunction with a set of rules stored in the database 32 . the rules are callable by name , can be added , deleted and modified , chained together and customized ( e . g ., regional specific rules ). the rules are real - time in that they are loaded for the card and merchant and run real - time . the rules are not embedded in code or stored procedures . the identification and authorization stage 106 handles an identification of a buyer through a payment device and authorization of a transaction . to do this the identification and authorization stage 106 communicates with the database 32 that stores a buyer &# 39 ; s identification number , preferred payment information , and payment history . the payment database 32 includes multiple databases of information . for example , to increase security the pin information is stored in encrypted form on a separate database from a person &# 39 ; s name , phone number , and payment account information . the identification and authorization stage 106 matches the identification number with the identification number taken from the payment device to confirm the buyer &# 39 ; s identity and analyzes the buyer &# 39 ; s payment history , looking for irregularities or past credit problems , to authorize the transaction . in the event of a transaction using a pin , the identification and authorization stage 106 communicates with a secure pin manager ( not shown ), such as compaq &# 39 ; s attalla a10000pci or thales &# 39 ; hsm7100 , which in turn verifies the pin information with an encrypted pin database . the transaction layer stage 108 communicates between the other stages 102 , 104 , 106 , 110 and the customer contact points of sale ( e . g ., pos 20 , pos 22 , customer system 24 ), relaying information about a transaction , identification , authorization , and pin . in an embodiment , the transaction layer stage 108 uses independent links ( not shown ) to connect to customer contact points of sale . the transaction layer stage 108 interfaces with information contained in the database 32 , such pin and key information , payment and other databases . more specifically , the transaction layer stage 108 handles encryption key management , card / device identification from a point or sale , encrypted pin receipt and verifications transactions , and authorization requests to payment networks 42 , 44 , 46 , 48 . further , the transaction layer stage 108 handles authorization results from payment networks 42 , 44 , 46 , 48 , authorization results back from a point of sale , payment transactions to and from payment networks 42 , 44 , 46 , 48 , and account maintenance originating from web , phone and store . the payment manager stage 110 provides for direct access to the payment networks ( e . g ., visa or other payment card networks , atm , ach , or other networks ), and allows for the use of an electronic wallet . an electronic wallet is a small software program used for online purchase transactions . many payment solution companies , such as cybercase , offer free wallet software that allows several methods of payment to be defined within the wallet ( for example , several different credit cards ). this allows the system to handle pre - paid account programs such as stored - value cards and accounts that automatically draw down a set amount from the buyer when his / her account approaches zero . more specifically , the payment manager stage 110 verifies payment information with payment networks 42 , 44 , 46 , 48 and third party databases ( not shown ), correction of payment information , manage authorization , pre - authorization and transactions with payment networks 42 , 44 , 46 , 48 , and provides an ability to add a wallet , stored value or gift card functionality . the transaction layer stage 108 and the payment manager stage 110 allow a seller to insert new payment networks , customer contact points , and payment devices without changing the configuration of the customer identification , loyalty and merchant payment gateway server 16 . the database 32 , as discussed above , may contain multiple databases . for example , the database 32 may contain a loyalty database containing loyalty card ids , names , addresses and phone numbers . the database 32 may include a payment database containing credit card information and bank account information . the database 32 may include a payment history that can be used by the rules engine 104 , for example , for fraud detection . the database 32 may also include payment rules and pin encryption key management . to more fully illustrate the merchant payment process 100 , two examples are now presented . merchants use loyalty cards as a way to identify consumers . in general , a loyalty cards is card issued by a merchant to identify the buyer as part of a loyalty rewards program . a loyalty rewards program is a program offered by a seller or merchant that rewards buyers for their patronage to increase buyer loyalty . reward programs may include product discounts and coupons , points associated with a purchase that can be used at the store or other places like frequent flyer miles , special offers , invitations to special events or rebates tied to purchases . a loyalty card given to the buyer usually has the merchants name printed on the card and a unique account number stored on the card , often utilizing a bar code or magnetic stripe . loyalty cards typically contain a unique identification number that the merchants loyalty reward program uses to track the buyer &# 39 ; s purchases . to allow quick input of the identification number these cards usually contain some type of export device such as a barcode or magnetic stripe . when a customer gets to the point - of - sale terminal 20 , he or she will either swipe the card through a magnetic card reader or scan the card with a bar code - scanning device . depending on the level of security desired by the seller , the seller could also require the buyer to enter a pin into an input device , which would be encrypted at the terminal . the information is transmitted through the controller 18 over the wan 14 to the merchant payment process 100 of the customer identification , loyalty and merchant payment gateway system 16 . the process 100 uses the pay database 32 to confirm the buyer &# 39 ; s identification number and pin , and authorize the transaction . the pay database 32 sends the appropriate transaction data and identification number to a loyalty database , thus allowing the buyer to benefit from the buyer loyalty program . once the transaction is authorized , the process 100 informs the pos terminal 20 to allow the transaction to proceed and perform the backend payment processing with a payment network that was pre - selected by the buyer . the average buyer already has a number of cards in his / her wallet including a driver &# 39 ; s license , multiple payment cards and membership cards . sellers are also asking buyers to carry additional loyalty cards ( e . g . grocery stores , drug stores , restaurants , coffee shops , movie rental stores , airlines , hotel chains , etc .). however , for many transactions buyers have a preferred method of payment ( e . g . when buying gas , i use my visa card ; when grocery shopping , i use my debit card ; when clothes shopping , i use my american express ). the merchant payment process 100 is used to identify a buyer for a loyalty program when a payment card or debit card is presented . the loyalty reward program then knows to give the consumer the appropriate rewards , and the consumer would not have to present a separate card . a consumer may specifically state his / her wish to be part of a loyalty rewards program and to use his / her payment or debit card as an identifier for the loyalty program . in addition , the merchant payment process 100 keeps the consumers card number private . specifically , once the consumer &# 39 ; s payment or debit card is swiped in the magnetic card reader , or entered by some manner , the merchant payment process 100 encrypts the card &# 39 ; s number using a one - way encryption algorithm . passing it through the customer contact point , the merchant payment process 100 sends the encrypted pin to an identification database that matches the encrypted number to the buyer &# 39 ; s loyalty identification number . the buyer &# 39 ; s loyalty identification number is then sent to the loyalty database , which interacts with the customer contact point to allow the buyer to participate in the seller &# 39 ; s loyalty program . at no point in this process is the buyer &# 39 ; s card number stored in an unencrypted form . even if the identification database is compromised , the most information an unauthorized user could access would be the buyer &# 39 ; s encrypted card number ( which could not be unencrypted to reveal the actual card number ) and the buyer &# 39 ; s loyalty identification number , neither of which could be used for payment . in a situation where security is not a significant concern , the card can be stored unencrypted . referring to fig4 a customer identification , loyalty and merchant payment gateway process 200 includes receiving ( 202 ) a payment via a point of sale input device . the process 200 identifies ( 204 ) an owner of the payment and determines ( 206 ) if the owner is authorized to make the payment . if the owner is not authorized to make the payment , the process 200 sends ( 208 ) and denial of service message to the point of sale device . if the owner is authorized to make the payment , the process 200 loads ( 210 ) a set of rules and determines ( 212 ) a payment network selected by the user . the process 200 sends ( 214 ) payment to the appropriate payment network and returns ( 216 ) a success message to the user . the process 200 determines ( 218 ) whether the user is participating in a loyalty program . if the user is participating in a loyalty program , a historical database is queried ( 220 ) and updated ( 222 ) with the appropriate transactional information .