On-line transactions between consumers and merchants on the World Wide Web (WWW) are becoming increasingly more numerous as the public becomes more facile in making purchases on the Internet. Such transactions can be for the purchase of "soft" goods, i.e., information, software and other material available in electronic form that can be delivered in real time to a user's client terminal. Such transactions can also be for the purchase of conventional "hard" goods, where the purchased merchandise are delivered off-line. Conventional on-line payment options generally involve the use of credit cards wherein the user provides his or her credit card number on-line or off-line to the merchant provider to pay for the "hard" or "soft" purchase to be delivered on-line or off-line.
Where the transactions involve a relatively small cost, for example $10 or less, the credit card system of payment is too expensive. Further, the credit card payment system excludes potential customers who do not have a credit card, or those who do but do not "trust" either providing their credit card number on-line, or do not want to use their credit card for such purchases. It would be advantageous, therefore, that some trusted transaction intermediary perform the functions of authenticating a user on the WWW and authorizing the transaction. Once such a transaction intermediary authenticates the user and authorizes the transaction, the merchant is alerted to provide the goods or services which are the subject of the transaction and an account associated with the user is billed for the transaction amount. Advantageously, once the user has registered with the transaction intermediary, no sensitive billing information, such as a credit card number, needs to be sent to the merchant.
In co-pending application Ser. No. 08/532,336 filed Sep. 22, 1995 by Y. Ronen, co-inventor herein, and assigned to the same assignee as the present application, a method of billing for services and/or goods ordered over the Internet from a merchant is disclosed. As described therein, the customer/user places a real or a virtual telephone call to the merchant's 900 telephone number and is charged by the telephone company an amount for that call that is representative of the cost of the goods or services being ordered via the Internet from the merchant's server. The merchant's server associates the 900-number telephone call with the request via the Internet for the goods or services in order to authenticate and authorize the transaction. In co-pending patent application Ser. No. 08/636,109 filed Apr. 22, 1996, co-invented by the same Mr. Ronen who is co-inventor herein, and assigned to the same assignee as the present application, a method of billing for transactions conducted over the Internet is disclosed in which a billing server connected on the Internet receives the IP address assigned to that user's client for the current user session and an indication of the user's identity from the user/customer's Internet Access Provider (IAP). In response to a chargeable transaction, the merchant's server transmits to a billing platform the IP address identity of the user making the transaction and the cost associated with the transaction. The billing server then cross-references the IP address associated with the cost of the transaction received from the merchant's server with the IP-address/user-identity relationship received from the IAP to properly charge an established account of the user for the transaction. Such an account is established by the user prior to the execution of the transaction for billing in a predetermined manner to, for example, the user's selected credit card, the user's debit card, the user's telephone account associated with his or her phone number, the user's merchant credit card, or other billing mechanism. For this billing methodology, arrangements thus need be established between billing server and the large number of different Internet Access Providers that provide Internet access to a tremendously large customer base since for each user's session the IAP must be programmed to forward to the appropriate billing server the relationship between the user's currently assigned IP address and identity.
A billing methodology that minimizes the steps that need be performed to obtain authorization and approval for an Internet transaction is therefore desirable. Further, a billing methodology that requires interactions between only the user, the merchant, and the provider of the billing service is advantageous.