Method and system for account activation

#The present invention relates generally to the activation of accounts and, more particularly, to the activation of consumer or other accounts which are associated with a product or service of value, including prepaid phone cards, gift cards, ATM cards, and the like utilizing an existing point-of-sale (POS) debit or credit card authorization processing system without any actual transfer of funds.

#U.S. Pat. No. 6,000,608 entitled “Multifunctional Card System” describes and claims a system for the activation of cards, such as prepaid phone cards, gift cards, and the like utilizing an existing debit card/credit card processing system. As described in detail beginning at column 5, line 49, the system and methods employed in the '608 patent suffer from a significant drawback, namely because of the way the system functions, the activation of a card or other account using existing debit or credit card networks requires the actual transfer of funds, even de minimis funds, for activation of an account or card. The '608 patent describes a system and methods in which nominal funds (i.e., one cent or more) may be employed for this purpose. However, because of the requirement for an actual transfer of funds, the system and method described in the '608 patent suffers from certain inefficiencies. The present invention is an improvement upon the system and methods of the '608 patent in that it establishes a system and method for the activation of consumer or other accounts, including prepaid cards for goods or services using an existing credit/debit card processing system which does not require the transfer of any funds.

#Briefly stated, the present invention comprises a method of activating a prepaid account using an existing electronic funds transfer network, including a point-of-sale (POS) terminal, debit/credit card processing infrastructure and an account issuer authorization center. The method includes obtaining identification data concerning the account to be activated at the POS terminal; sending an activation request message, including the obtained identification data, from the POS terminal, through the card processing infrastructure to the account issuer authorization processing center; receiving the activation request message at the account issuer authorization processing center, deciding whether or not to activate the account and, if the decision is to activate the account, generating a response code based upon the decision to activate the account, the response code not resulting in the transfer of any funds and being a code other than an approval code or a denial code; sending the response code from the account issuer authorization processing center through the card processing infrastructure to the POS terminal; and receiving the response code at the POS terminal, decoding the response code and confirming at the POS terminal that the account has been activated.

#The following detailed description of a preferred embodiment of the present invention will be better understood when read in conjunction with the appended drawings. For the purpose of illustrating the invention, there is shown in the drawings an embodiment which is presently preferred. It should be understood, however, that the invention is not limited to the precise arrangements and instrumentality shown. In the drawings:

#FIG. 1 is a functional schematic block diagram of the primary structural features of a system for account activation in accordance with a preferred embodiment of the present invention; and

#FIG. 2 is flow diagram of the major steps employed by the present invention in the activation of a prepaid card or an account using the system of FIG. 1.

#As discussed above, the present invention comprises an improvement over the system and methods disclosed in U.S. Pat. No. 6,008,608, the entire subject matter which is hereby incorporated herein by reference. FIG. 1 shows the principal functional components of a system 10 in accordance with a preferred embodiment of the present invention. The primary function of the system 10 is to provide real time notification by a merchant to an account issuer (i.e., card issuer) including appropriate information whenever the account issuer's “product” (i.e., an account or card) has been sold so that the value associated with the product can be activated to permit immediate, full usage of the product by the purchaser or other user. The activation process creates guaranteed value in a database account of the issuer which is immediately available for use by the purchaser once the account is credited with the amount of the purchase upon notification by the merchant.

#The system 10, which uses standard electronic funds transfer (EFT) processing techniques and infrastructure, includes a point-of-sale (POS) terminal 12 which is located at a merchant facility or other convenient location. The POS terminal 12 is typical of POS terminals well known to those of ordinary skill in the art and includes an processor 14 for processing the information about the purchase of goods and services, a keyboard 16, keypad or other data entry device such as a touch screen, to facilitate entry of information regarding the purchase of goods or services, a display 18 such as a CRT, LCD or other display for displaying information to the terminal user and/or customer, a card reader 20 which may be a MIRC or other reader well known to those of ordinary skill in the art which functions to read the magnetic stripe or other identifier of credit, debit or other cards such as a prepaid telephone card, gift card, prepaid ATM card etc., and a communication interface 22 which functions to facilitate the communication of information from the POS terminal 12 to a remote location and to receive information from a remote location at the POS terminal 12.

#It will be appreciated by those of ordinary skill in the art that the precise structure of the POS terminal 12 and the components of the POS terminal 12 may vary from the example POS terminal 12 provided in FIG. 1. The present invention is adapted to be employed in connection with any existing or future POS terminal and so such variations may be found. For example, some POS terminals may include a printer and some POS terminals may include more than one card reader. Similarly, some POS terminals may employ a communication interface which is positioned at a remote location, such as in the back room of a retail facility. Likewise, some POS terminals may not include a keyboard or other of the above described components. It will be appreciated by those skilled in the art that the precise structure of the POS terminal 12 should not be considered to be a limitation on the present invention which is equally applicable with respect to any and all POS terminals.