WO2001054028A1

WO2001054028A1 - Electronic cash for a financial transaction system

Info

Publication number: WO2001054028A1
Application number: PCT/US2001/001789
Authority: WO
Inventors: Karen Macaluso; Gerald R. Black
Original assignee: Karen Macaluso; Black Gerald R
Priority date: 2000-01-18
Filing date: 2001-01-18
Publication date: 2001-07-26
Also published as: AU2001232861A1; WO2001057778A2; AU6290001A

Abstract

The financial transaction information system provides a cash-alternative instrument that can be used in all transactions to pay bills by mail or in person, without using checks, cash, conventional credit cards, or money orders. The system comprises a cash-alternative instrument, a plurality of participating terminals, a databank and system driver, and a network of system financial institutions including a centralized system financial institution. The cash-alternative instrument is generally (1) a PVC card or (2) paper, the paper having a machine-readable code for use in electronic commerce. The customer can immediately use the instrument at participating terminals to purchase goods and services, or at an ATM to acquire cash. Anyone can participate in the financial transaction system without the need for any prior bank affiliation - opening the world of electronic commerce to everyone. The system also provides participates with anonymity, similar to cash.

Description

ELECTRONIC CASH FOR A FINANCIAL TRANSACTION SYSTEM

FIELD OF USE

The present invention relates to a system for financial transactions that enables everyone to participate in a cashless society, and more particularly, a financial transaction system that prints and processes a new form of currency that is used for the acquisition of a broad range of goods and services, independent of any national or regional currency.

BACKGROUND OF THE INVENTION

Generally, financiaUnstitutions issue ATM and. debit- cards with magnetically encoded stripes. While usage of such cards increases, many people are unable to acquire such cards (students, immigrants, people with poor or no credit). Others are unwilling to use credit cards because of a concern for accumulating additional debt. Also, many believe that individual privacy is threatened by advanced information technologies that enable personal data to be captured from financial transactions and preserved in massive databases.

Accordingly, cash is still the preferred and often the only method for settling a financial transaction. Cash transactions are quick and provide the user with a degree of anonymity that is unavailable with other forms of payment. However, people with cash in their possession are exposed to personal danger from others. Also, with the advent of electronic commerce, an alternative payment means is not only desirable but also necessary. Consequently, there is a need for a cash-alternative that is as convenient and as private as cash and which is of no value to others. In recent years, the use of computer systems in transferring funds from one account to another has spread widely and has become the standard-procedure for banking operations. In addition, access to computer systems via telephone connections by home computer systems has increased significantly. Computer systems in common usage by banks and other financial institutions include ATM's enabling the user to perform a limited number of financial transactions. These computer systems are able to dispense legal currency and debit the user's account in the corresponding amounts. Some of these computer systems further include a networking means for accessing accounts in different banks or financial institutions, to debit and credit the accounts, check balances, and the like.

The use of the ATM's by the bank customers also is limited by the availability of the machines. Many banking computer systems are limited to well-defined geographic areas so that the customer is not able to withdraw cash or conduct other business while traveling. Traveling in different countries further compounds the difficulties in obtaining cash and making foreign legal currency conversions. Also personal security is becoming of great concern relative to the use of ATM machines in public places.

Another fast-growing trend is the ordering and provision of information, goods and services via the Internet, electronic mail, and similar means. Payments in the non-electronic world are accomplished via cash, checks, money orders, postal orders, and the like.

Telephone companies are now issuing pre-paid phone cards to pay for telephone services. The cards have a predetermined value and are issued in exchange for cash. Such cards are limited to pay only for services offered by the telephone companies. U.S. Patent No. 5,721 ,768 (Stimson et al.) discloses an improved telephone pre-paid calling card system and includes a host computer, a main processor, a plurality of on-site terminals, and a plurality of cards. Such systems are nothing more than a pre-paid payment plan for the services of the telephone companies, and lack the versatility of cash. Almost every product and service category in both the consumer and business sector is subject to barter. The list runs the. gamut from accountin . services to. landscaping_^ Even . Fortune 500 companies- articipate. Economists estimate that corporate barter systems involve $55 billion annually. It is estimated that sixty-five percent of the corporations listed on the New York Stock Exchange are using barter. That includes an impressive list of companies such as General Motors Corp. (traded locomotives for tea in Sri Lanka), PepsiCo Inc. (traded syrup and technology for Russian vodka), The Coca-Cola Co., General Electric Co., McDonnell Douglas Corp., Pitney Bowes Inc., Turner Broadcasting System Inc., Mitsubishi Motors Corp. and Xerox Corp. Worldwide, bartering is known to be very profitable despite the lack of formal records. It's estimate that bartering in East Asia exceeds $69 billion a year. Also, bartering is becoming increasingly popular in the former Soviet Republics.

The international financial community today operates using numerous national currencies and with them, distinct systems, rules, procedures and laws for currency payments for settlements of obligations within the country issuing that currency. Most rely on the country's central bank, such as the Federal Reserve in the United States, to guarantee that once a payment is made, it is irreversible. This guarantee, and the execution of transactions, is dependent upon the operating hours of the central bank and the wire system. Thus, there exist within the financial community acute problems and risks when making payments in a particular country when the transfer of the underlying currency of the transaction is not supported by that country's financial system and its central bank.

The present invention recognizes that global commerce over electronic networks, such as the Internet, cannot reach potential unless customer and merchant obligations relating to transactions are fixed at the time of the transaction so that risk to these parties associated with currency exchange is minimized. Thus, what is needed to encourage the development of international commerce over such networks is a system and method that offers a means of eliminating the uncertainty associated with multi-currency transactions. What is needed is a system that provides an alternative to paper money and coinage that can be used in all transactions to pay bills by mail, by telephone or the Internet, or in person without using checks, cash, conventional credit cards, or money orders, and can be physically exchanged between parties much the same as legal tender; what is needed is a system that will provide participants with current rates of exchange between differing currencies while being of no particular currency.

What is needed is a new instrument that can provide a substitute for traveler's checks and money orders and be accepted by any POS or ATM; what is needed is a system that enables all people, regardless of class or credit status, or whether or not they have a prior bank affiliation to participate in a cashless society and gain ready access to payment means with a large number of participating merchants, and does not have to be renegotiated or converted from transaction to transaction.

SUMMARY OF THE INVENTION

All of the above-mentioned needs are addressed by the financial transaction system of the present invention. It is the primary object of the present invention to provide a financial transaction system and instrument that provide the certainty of cash, while being compatible with electronic commerce enabling ready access to funds at all hours of the day anywhere in the world.

As used herein, the term "legal tender" is script and coin that are issued by government authorities as a medium of exchange and as such must be accepted in payment for a debt.

The financial transaction system of the present invention comprises a cash-alternative instrument, a plurality of participating terminals, a databank and system driver, and a network of system financial institutions including a centralized system financial institution. The cash-alternative instrument of the present invention is acquired at a participating terminal (preferably, a POS terminal or an ATM) in exchange for legal tender. As such, the cash-alternative instrument of the present invention becomes instantly convertible and transferable, using electronic commerce, without ever having to be presented to a bank or other financial institution for payment. The cash-alternative instrument of the present invention is generally (1) a PVC card (e.g. - smart card or magnetic stripe), (2) paper, the paper having a machine-readable code for use in electronic commerce, or (3) other token form (e.g. - key tag, watch or bracelet, writing implement) that includes information for processing a financial transaction that is carried by the user. The cash-alternative instrument can be used in all transactions to pay bills by mail or in person, without using checks, cash, conventional credit cards, or money orders.

The plurality of participating terminals includes POS terminals for merchants, terminals for service providers, ATM's, PC's and PDA's. The terminals enable access by a user from a variety of local and remote sites, enabling access to use of the cash-alternative instrument of the present invention at any time, anywhere.

A system driver manages the financial transactions and processes information regarding such transactions. Upon acquisition, the purchase value of the cash-alternative instrument is debited to the issuer's account and is credited to the instrument holder's account at the centralized system financial institution. The system driver tracks and processes information regarding each financial transaction. Once an account is identified, the driver verifies the available account balance. A record is established for each account and the driver credits the account as value is added and debits the account as value is used. The system of the present invention is fully compatible with Visa_®, MasterCard_®, American Express_®, conventional ATM's and other similar-type systems.

The funds of the individual users are deposited and maintained at a centralized system financial institution. Similar to a national or regional treasury, the centralized system financial instrument, preferably guarantees payment to any instrument holder. Since the centralized system financial institution is associated with the system and not the participant, the cash- alternative instrument enables the instrument holder to engage in financial transactions without ever having to fill-out an application for a credit or savings account at a conventional financial institution. Each merchant does not need an account with the centralized system financial institution, as existing banks can form a network with the centralized system financial institution for processing transactions.

The financial transaction system of the present invention provides users with the following advantages over conventional systems:

• Once accepted by the major credit card companies (i.e. - Visa_® and MasterCard_®), authorizations against the account are instantly enabled, such that the cash-alternative instrument can be used at hundreds of thousands of retail outlets around the world in lieu of cash, including hotels, car rental agencies, and purchases or payments over the telephone and Internet;

• The cash-alternative instrument is compatible with conventional credit and stored- value systems and can be used in both on-line and off-line transactions;

• The cash-alternative instrument can be recharged at any participating terminal (i.e. - POS, ATM). The user may also send value to the centralized system financial institution to be credited to a particular account;

• Since the cash-alternative instrument is identified with only an account number and a PIN of the user, a degree of anonymity is provided; and

• The PIN can be changed by calling a customer service number - enabling the cash- alternative instrument to be transferred, similar to cash.

For a more complete understanding of the financial transaction system and method of the present invention, reference is made to the following detailed description and accompanying drawings in which the presently preferred embodiments of the invention are shown by way of example. As the invention may be embodied in many forms without departing from spirit of essential characteristics thereof, it is expressly understood that the drawings are for purposes of illustration and description only, and are not intended as a definition of the limits of the invention. Throughout the description, like reference numbers refer to the same component throughout the several views.

BRIEF DESCRIPTION OF THE DRAWINGS

FIGURE 1A is a simplified block diagram of a first preferred embodiment of the financial transaction system of the present invention for use in electronic commerce between parties who are remote from each other and are conducting a financial transaction over a network;

FIGURE 1 B is a simplified block diagram of a second preferred embodiment of the financial transaction system of the present invention between a first instrument holder and a merchant, and between a second instrument holder and a service provider, the parties being face-to-face with each other;

FIGURE 2A is the preferred embodiment of the cash-alternative instrument of the present invention when issued as a PVC card - the drawing being the front side of the card; FIGURE 2B is the cash-alternative instrument of FIGURE 2A, the drawing being the bask side of the card, both sides of the PAN being covered by a peel-off strip for security reasons; and FIGURE 2C is another preferred embodiment of the cash- alternative instrument of the present invention when issued as paper - the drawing being the front side of the paper showing a barcode and a PAN - the PAN being covered by a peel-off strip for security reasons;

FIGURE 3 is a basic schematic diagram showing the basic steps of the financial transaction system of the present invention for processing a financial transaction;

FIGURES 4A and 4B show a logic diagram of a preferred embodiment for using the cash-alternative instrument of the present invention through an outlet from a participating retail merchant; FIGURE 5 is a logic diagram of the method of the present invention showing a preferred embodiment for acquiring value to the cash-alternative instrument of the present invention through a terminal;

FIGURE 6 is a logic diagram illustrating a method for adding value to the cash- alternative instrument of the present invention for a financial transaction at a POS terminal;

FIGURE 7 is a schematic diagram disclosing a preferred embodiment of a banking network for accessing an account of a user at the centralized system financial institution;

FIGURE 8 discloses a typical ATM or POS terminal for use with the financial transaction system of the present invention, including an instrument reader/dispenser, a receipt dispenser, and a cash dispenser;

FIGURE 9A discloses a typical screen display at an ATM or POS terminal for transaction options for use with the preferred embodiment of the system of the present invention;

FIGURE 9B discloses the screen display at the ATM or POS terminal of FIGURE 6A for full-service banking options for use with the preferred embodiment system of the present invention;

FIGURE 10 is a simplified block diagram of the system of the preferred embodiment of the present invention including multi-purpose cash-alternative instruments, ATM and POS terminals, a system driver, and a centralized system financial institution;

FIGURE 11 A discloses a schematic flowchart of a preferred embodiment of a combination key/cash-alternative instrument card of the present invention, the program . logic enabling a guest to use the cash-alternative instrument of the present invention to gain room access; and FIGURE 11B discloses a functional block diagram of the preferred embodiment of FIGURE 11 A, the operating codes of which are disposed on the multi-purpose cash-alternative-instrument of the present invention opposite the card;

FIGURE 12 discloses a simplified block diagram of a preferred embodiment of the financial transaction system of the present invention enabling the instrument holder to readily convert between differing currencies;

FIGURE 13 discloses a simplified logic diagram the cash-alternative-instrument of the present invention for use in a barterin -type transaction;

FIGURE 14 discloses a simplified logic diagram of the cash-alternative-instrument of the present invention for use in a secured loan-type transaction;

FIGURE 15 discloses a simplified logic diagram for use of the cash-alternative-instrument of the present invention for a fund transfer by wire or the like; and

FIGURE 16 discloses a simplified block diagram as to a government distribution component wherein the cash-alternative-instrument of the present invention is used.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

Referring now to the drawings, figure 1a discloses a first preferred embodiment of the financial transaction system of the present invention using the cash-alternative instrument described herein for use in electronic commerce. As depicted, the parties are remote from each other and are conducting a financial transaction over a network, such as the Internet. The financial transaction system comprises a centralized system financial institution, a system driver, a computer terminal, and the cash-alternative instrument of the present invention.

As shown, the financial transaction involves: (1 ) price negotiations between the instrument holder and the merchant; (2) the system driver reviews the parameters of the transaction to determine if approval is appropriate; (3) if approved, the system driver advises the centralized system financial institution of the transaction to transfer funds; (4) the fund transfer from the centralized system financial institution to the merchant's bank. In deciding whether or not to approve the transaction, the system driver need only check to confirm that the cash-alternative instrument is authentic (not counterfeit), has not been tampered with, is not hot (stolen or issued by the government to a criminal), and that the account balance will support the transaction. None of the criteria for approval investigates any personal information relative to the user (since the account generally does not include user personal data), providing the instrument holder with a certain amount of anonymity.

FIGURE 1B is a simplified block diagram of a second preferred embodiment of the financial transaction system of the present invention between a first instrument holder and a merchant, and between a second instrument holder and a service provider. Again, the financial transaction system comprises a centralized system financial institution, a system driver, a computer terminal, and the cash-alternative instrument of the present invention. The parties are face-to-face with each other. The block diagram shows the linkage between the first instrument holder and the merchant, and the second instrument holder and the service provider, the centralized system financial institution, the system driver, the merchant's bank and the service provider's bank.

As shown, the financial transaction between the instrument holder and the merchant involves: (1A) price negotiations between the instrument holder and the merchant; (2A) the system driver reviewing the parameters of the transaction to determine if approval is appropriate; (3A) if approved, advising the centralized system financial institution of the transaction and to transfer funds; (4A) the transfer of funds from the centralized system financial institution to the merchant's bank.

As shown, the financial transaction between the instrument holder and the service provider involves: (1B) price negotiations between the instrument holder and the service provider; (2B) the system driver reviewing the parameters of the transaction to determine if approval is appropriate; (3B) if approved, advising the centralized system financial institution of the transaction and to transfer funds; (4B) the transfer of funds from the centralized system financial institution to the service-provider's bank.

The cash-alternative instrument of the present invention can be accepted for the network transactions of FIGURE 1A, and accepted by both the merchant and service provider of FIGURE 1 B.

The system comprises a cash-alternative instrument, a centralized system financial institution, a system driver, and a plurality of remote terminals (e.g. - POS terminals, service provider terminals).

The financial transaction system of the present invention comprises a cash-alternative instrument, a plurality of participating terminals, a databank and system driver, and a network of system financial institutions including a centralized system financial institution.

The cash-alternative instrument of the present invention is acquired at a participating terminal (preferably, a POS terminal or an ATM) in exchange for legal tender or its equivalent. While other forms of electronic currency and digital cash are being discussed, the inventors are unaware of any legal equivalent to legal tender other the cash-alternative instrument of the present invention. Accordingly, a first cash-alternative instrument of the present invention can be used to generate a second cash alternative instrument by pulling value from the account of the first cash-alternative instrument and adding such value to the account of the second cash-alternative instrument.

The cash-alternative instrument of the present invention is negotiable in a way that is similar to national and regional currencies. Since the cash-alternative instrument is acquired in exchange for legal tender or the equivalent of legal tender, the funds become available immediately once the financial transaction is completed. The cash-alternative instrument is initially, upon issue, backed by the currency of choice. Other non-cash forms of payment are generally promises to pay, upon presentment. Unlike checks, money orders, traveler's checks, and credit cards are promises that money is available to the holder, the cash- alternative instrument of the present invention can be exchanged between parties as payment for goods and services.

As such, the cash-alternative instrument of the present invention becomes instantly convertible and transferable, using electronic commerce, without ever having to be presented to a bank or other financial institution for payment. The cash-alternative instrument of the present invention is generally (1 ) a PVC card (e.g. - smart card or magnetic stripe), (2) paper, the paper having a machine-readable code for use in electronic commerce, or (3) other token form (e.g. - key tag, watch or bracelet, writing implement) that includes information for processing a financial transaction that is carried by the user. The cash-alternative instrument can be used in all transactions to pay bills by mail or in person, without using checks, cash, conventional credit cards, or money orders.

The cash-alternative instrument of the present invention is multi-purpose, replaces phone cards and all other single-purpose cards, credit and stored-value cards, smart cards, ATM cards, money orders, travelers' checks, and the like. One component of the system of the present invention enables distributions to groups of persons from any public or private agency, a second component enables persons or entities to wire transfer funds from almost any remote location, a third component enables participants to engage in secured loans or pawn-shop activities, a fourth component enables participating merchants and service providers to promote the use of electronic commerce, and a fifth component enables participating merchants and service providers to barter their goods and services. Instrument holders can avoid conventional bank affiliation while collecting interest on their accounts.

In one preferred embodiment, the cash-alternative instrument is multi-purpose, replacing phone cards and all similar single purpose cards, credit and debit cards, ATM cards, money orders, travelers' checks, and the like - and is combined with other functions or services, such as an ID^'card, a social security card, a library card, a driver's license, a key for access security. The cash-alternative instrument is acquired anywhere in the world from a participating outlet, such as a POS terminal, ATMs, inside a financial institution, by telephone, through a PC or PDA, or through the mail. In one preferred embodiment, acquisition occurs in a similar manner to the way that a money order is acquired.

In one preferred embodiment of the present invention, the cash-alternative instrument is a plastic card made of a PVC-type material. The card preferably includes a tracking number, such as a PAN, that is imprinted onto each card. The PAN is used by the cardholder to report a lost or stolen card. The PAN is also preferably embedded into each card as a microchip or by other stamping or similar means currently known in the art, to enable cardreaders to identify the card during usage. Preferably, batching the PAN's for the cash-alternative instruments of the present invention is sequential, distribution to the merchants and service providers and to the individual customers is random. The initial value of the card is determined by the payee at the time of acquisition and paid for either by some form of legal tender or an equivalent to legal tender.

Also, if reservations, airline tickets, hotel registration, theater seats, and the like become lost, stolen, or misplaced, the cash-alternative instrument of the present invention can keep track of such items, by retracing the account and the data included therein involving the purchase and acquisition thereof.

The card includes a security identifier such as a PIN or a biometric identifier (such as a fingerprint) of the cardholder to minimize the value of the card to others if the card is lost or stolen. One preferred embodiment of the cash-alternative instrument of the present invention includes more than one PIN or password or combination thereof to identify the cardholder. During acquisition at a POS terminal, the cards are dispensed in a vending-type machine and charged at the POS terminal. When acquired at an ATM-type machine, the cash- alternative instrument is dispensed directly by the ATM-type machine. When acquired by use of a phone, voice recognition is a valuable biometric property to confirm the identify of the user, and speech recognition technology is used to interpret the nature of the request. In the preferred embodiment of the present invention, the cash-alternative instrument is only identifiable by a number, the number being linked to a particular account into which cash may be added or spent, similar to any conventional stored-value card. Every cash- alternative instrument has its own identifying number (PAN) and is accessed with a user personal identification number (PIN). The user can change the PIN, making the cash- alternative instrument of the present invention transferable and exchangeable the same as legal tender. This financial capability becomes available to an economic stratum of people who have been cut-off from conventional banking services. The cash-alternative instrument of the present invention is compatible with conventional electronic payment systems, and may be used for the payment of goods and /or services in transactions where a debit or credit card is accepted.

In one preferred embodiment as shown in FIGURES 2A, 2B, and 2C, a security black-out cover is positioned over the PAN, on only one side of the card if the plastic is not raised, or on both sides of the card if the card has raised or depressed numbering. This cover enables the PAN to be hidden during acquisition. The security blackout cover can be saved by the cardholder for recording purposes in the event that the cash-alternative instrument of the present invention is lost or stolen, enabling the cardholder to report the loss. In another embodiment, the cash-alternative instrument of the present invention is acquired in an envelope so that the person dispensing the cash-alternative instrument cannot see the PAN. Also, multiple security blackout covers can be stacked on top of each other to enable the cardholder to save the security blackout covers in more than one place.

The cash-alternative instrument of the present invention is preferably not activated until acquisition, at which time the cash-alternative instrument is inserted into a cardreader. The cardholder selects the amount and submits payment. The value of the cash-alternative instrument is determined and preserved into the account record along with the PAN. If a PIN is used for security measures, the PIN is also included in the account record. When acquisition of the cash-alternative instrument occurs at a POS terminal, the cash-alternative instrument is acquired either through a vending machine or directly from a merchant as payment is made. When the cash-alternative instrument is acquired at an ATM, the cash- alternative instrument is charged when dispensed only after payment has been deposited into the ATM. The user may request a paper receipt for record-keeping purposes. When a paper receipt is issued, the receipt can include advertising and coupon exchange and numbers for play in games (such as sweepstakes or lottery-type games) associated with the system.

The system driver manages the financial transactions and processes information regarding such transactions. The system driver tracks and processes information regarding each financial transaction for each account. Once an account is identified, the driver determines the available account balance. A record is established for each account and the driver credits the account balance as additional value is received and debits the account balance whenever the cash-alternative instrument is used for payment. Upon acquisition, the purchase value (less fees and other costs) of the cash-alternative instrument is debited to the merchant's account and is credited to the instrument holder's account at the centralized system financial institution.

The cash-alternative instrument of the present invention serves as a means of networking the instrument holder to his/her account. In one preferred embodiment, a chip or equivalent is embedded into the cash-alternative instrument to confirm that the cash-alternative instrument is not a counterfeit for purposes of protecting the centralized system financial institution. The chip or equivalent is checked prior to each use. The cash-alternative instrument is accepted at numerous participating outlets for financial transactions. When the cash-alternative instrument is presented for the purchase of goods or services, an inquiry is made through the centralized system financial institution concerning the available account balance. In another preferred embodiment of the present invention, use of the cash- alternative instrument is similar to the use of a conventional stored-value card. The driver locates the account record and matches each cash-alternative instrument with the account record. If the transaction is approved, the driver debits the instrument holder's account and credits the merchant's account. The updated account balance is then stored into the account record. The PIN may also be embedded into the cash-alternative instrument. If the PIN is not so embedded, the PIN for the cash-alternative instrument (1) can be initially charged with no PIN and the PIN is assigned at the time of first usage, (2) can be selected by the cash-alternative instrument holder at the time of acquisition, or (3) can be included with the cash-alternative instrument at the time of acquisition. The instrument holder can thereafter change the PIN during any subsequent transaction.

In another preferred embodiment, the funds are deposited and maintained at the centralized system financial institution, where the funds are invested. The cash-alternative instrument provides incentives or interest on funds within the account to encourage customer participation in the financial transaction system of the present invention and also as a benefit to customers and businesses. If so selected and if certain pre-conditions are satisfied, the individual can participate in an investment process where the user shares earnings and losses with the system. A portion of the return on investment is credited to the instrument holder's account as interest. Each merchant and/or service provider does not need an account with the centralized system financial institution, as existing banks and financial institutions can form a network with the centralized system financial institution for processing transactions (see FIGURE 6). Since the centralized system financial institution is associated with the system and not the participant, the cash-alternative instrument enables the instrument holder to engage in financial transactions without ever having to establish a bank account. The system driver may be associated with the centralized system financial institution or may be independent thereof.

Deposits into the individual accounts are made by a variety of sources. An employee can receive part or all of a wage by direct deposit into his/her account by the employer. Similarly, parents can transfer money to students periodically enabling improved student budgeting. Fees can be collected upon initial acquisition and with each subsequent transaction. Also, the centralized system financial institution receives additional revenues from interest or investment of the deposited revenues received on the individual accounts by the employer. The transaction fees can be shared with the merchant or ATM bank, employers, issuing financial institution and network banks. Registration initially establishes an account. The cash-alternative instrument is acquired at a POS terminal, bank or an ATM. When acquisition occurs at a POS terminal the instrument holder advances cash, check, money order, or the like into the account. When acquisition occurs at a conventional ATM, the instrument holder preferably submits payment in cash or some other means supported by the ATM. Typically, a transaction fee is debited at the time of acquisition. Upon registration the available balance of the account is stored and continually updated as the driver tracks account usage. The second phase involves account access. A request is initiated at a POS terminal, an ATM, a telephone, or a computer terminal to access the account either by use of the cash-alternative instrument and by identifying the account. If the PIN's and passwords match, the driver accesses the account to determine if the account balance is sufficient to process the transaction. Once approved by the driver, the cost of the purchase is debited to the instrument holder's account and credited to the merchant's account.

Many people using the cash-alternative instrument of the present invention are concerned about privacy issues and are attracted to the financial transaction system by the anonymity provided. However, there are people who are less concerned about privacy issues but have limited access to banking services. These people include students, legal immigrants, and people with poor credit ratings. While the centralized system financial institution may want to limit these people to stored-value or pre-paid type transactions, as these people establish themselves professional and personally, they become attractive customers for full-banking services. FIGURES 9A and 9B show various simplified display screens for typical transactions and for full-service banking. Accordingly, the system of the present invention offers customers savings accounts (including special savings account services such as Christmas clubs and birthday clubs), checking accounts, and credit services to selected customers. Such services also include credit cards and secured loans (such as home-improvement loans, car loans, and first and second mortgages), as the centralized system financial institution deems appropriate. The cash-alternative instrument of the present invention can be used at an ATM, a phone line, a PC or a PDA to transfer money between accounts, particularly when full-service banking options are available.

In still another preferred embodiment of the cash-alternative instrument of the present invention, the face of the cash-alternative instrument in instances when exchanged as a gift card includes the face (photograph) of the instrument holder, or a message or personal image selected by the donor. Also, these gift cards (unlike conventional gift cards) are not limited to one particular merchant or service provider but are negotiable anywhere, to purchase goods and services as selected by the instrument holder. When a photograph of the instrument holder is used on the gift card, the photograph provides another means of identity confirmation.

The cash-alternative instrument of the present invention is used in bartering-type applications, in conjunction with pawnshops to advance money to instrument holders. The instrument holder supplies personal effects, such as jewelry, for collateral that can be redeemed once the debt has been repaid based upon the terms and conditions negotiated between the parties. In yet another embodiment, the cash-alternative instrument of the present invention has its own appraisers who provide such services directly to instrument holders.

The cash-alternative instrument of the present invention is used for credit exchange or cash, in change machines, or anywhere else other cash-alternative instruments are accepted, including but not limited to phones and the Internet. When use occurs at a POS terminal, even stamps or food stamps can be added to the value of the cash-alternative instrument. The cash-alternative instrument is an alternative to cash and can be readily converted into cash, if needed. When the cash-alternative instrument is a PVC card, the card is compatible with any POS terminal, ATM, or any other instrument reader, and eliminates the need for the instrument holder to submit personal data. Multiple PIN's, passwords, biometric identifiers, or combinations thereof can be used for purposes of system security. A typical biometric would be a thumb print or a print of the index finger submitted at the time of acquisition of the cash-alternative instrument and can be captured either by a biometric pen (when acquisition occurs at a point of sale terminal) or by pressing a button on a keypad, either of which has fingerprint sensors. Preferably, the keypad is similar to a telephone keypad with numbers and letters combined on one key, so that PIN's and passwords are submitted through the use of the same keys. Also, when fingerprint data is used to confirm identity, fingerprint sensors disposed in the keypad provide an incidental way to confirm identity as the data is submitted.

The financial transaction system of the present invention enables instrument holders to avoid any bank affiliation, since the centralized system financial institution is associated with the system and not the participant. This feature is of particular importance to immigrants who are trying to establish citizenship and have problems opening a bank account. Also, people with marginal credit are subject to having their accounts seized by creditors and the government. The centralized system financial institution guarantees the instrument and so there is no need for an instrument holder to carry a wallet or purse for identification purposes. Also, since the cash-alternative instrument is universally accepted and can be exchanged much the same as legal tender, there is also no need to carry any checks, cash, or credit cards. The cash-alternative instrument of the present invention can be exchanged between parties as payment for goods and services - unlike checks, money orders, traveler's checks, credit cards, and such that are promises that money is available to the holder.

Since PIN's and other security measures are used, the cash-alternative instrument is of essentially no value to others and can be easily replaced if lost. The cash-alternative instrument is accepted anywhere that has a conventional cardreader, and can be used at conventional ATMs for withdrawals and deposits. Also, the cash-alternative instrument can also be recharged by an Internet terminal, by phone, or otherwise as needed. The cash- alternative instrument is particularly useful for people with marginal or no credit where the cash-alternative instrument is used to access the instrument holder's own funds. There is no MISSING AT THE TIME OF PUBLICATION

and by eliminating such agent, the exchange rates become more favorable - gouging being eliminated. Other forms of currency exchange can also be used.

In another preferred embodiment of the financial transaction system of the present invention is that the currency conversion takes place automatically at the time of the transaction. The instrument-holder's account is in a first currency. If the merchant or service provider desires payment in a second currency, the currency conversion rate is determined at the time of the transaction, and the conversion is made at that time without the need for the instrument holder to participate in the conversion process. This feature provides flexibility to the merchant o service provider in that any acceptable currency can be selected. Also, see U.S. Patent No. 5,897,621 (Boesch), which describes a system and method for determining approval of a multi-currency transaction between a customer and a merchant over a network.

Typical U.S. Government payments include social security, supplemental security, veteran's benefits, civil service payments, and military retirement benefits. FIGURE 16 discloses a simplified block diagram as to a government distribution component of a preferred embodiment of the financial transaction system of the present invention, the system being compatible with the cash-alternative instrument. The financial transaction system of the present invention is compatible with recent federal legislation enabling direct deposit in the form of an electronic transfer account (ETA) for people with no bank affiliation. Persons can receive fund transfers without ever leaving home, or being released from a hospital or sick bed. Elderly, or disabled persons otherwise inconvenienced can put their hand in their wallets or purses or pockets or dresser drawers and have immediate currency access. Government or private agencies can thereby distribute funds to all parties, such parties selecting between conventional mail distribution, direct deposit in a conventional checking or savings account through ETA, or by using the system of the present invention. One example of fund transfer is shown in FIGURE 15. Preferably, the recipient advises the agency of the account number into which the funds are to be deposited, but in another preferred embodiment, the government deposits such funds and advises the recipient of the account number and the PIN and/or password.

In yet another preferred embodiment of the financial transaction system of the present invention, the PIN includes various -numeric codes to advise the system driver of particular conditions. For example, if a PIN submitted by an instrument holder includes a 911 code, the system driver knows that the instrument holder is in danger, advises law enforcement officials, and only dispense a small amount of cash. Other codes may be used to advise the system driver of severe health conditions, such as heart attacks, strokes, and seizures to notify medics. The personalized PIN can be selected by the cardholder as appropriate to notify the system driver of emergency situations.

FIGURE 4 illustrates how the cash-alternative instrument of the present invention is acquired - by payment of legal tender. Such methods of payment include but not limited to credit cards, money orders, stored-value cards, checks, cash, phone, or the like. In a global economy, when the relative values of currencies fluctuate with daily trading and where certain currencies are unstable, customers need an opportunity to preserve the value of the deposit into the account is not diminished before they have the opportunity to access the funds. The financial transaction system of the present invention enables a deposit to be maintained in anyone of a number of currencies or in multiple currencies. Accordingly, the financial transaction system of the present invention accepts deposits in any national or regional currency and enables the customer acquiring the cash-alternative instrument of the present invention to advise the system as to which currency js being deposited, and into which currency or currencies the account is to be maintained. In addition, the customer has the option subsequently to switch to one or more other currencies as market conditions change. The currency exchange occurs at market rates at the time of conversion when the information is transmitted to the driver. Alternatively, the instrument holder can request that the system select a stable currency, trusting the matter to system investors, much as mutual funds are used for investment purposes. This is an added benefit since this not only stabilizes the account but also enables the instrument holder to receive a return on investment. In addition, when a request for goods or services is made, the customer designates the currency of payment and the currency exchange occurs.at market rates at that time. Other prompts at the^" time of the financial transaction provide the instrument holder with currency exchange options whenever the cash-alternative instrument of the present invention is used. Such currency exchange options are incorporated into the system whenever the instrument holder makes a transaction, either in person, by phone, or over the Internet.

Since the cash-alternative instrument is exchangeable between parties, bills can be paid without the need for checking accounts. A special form of the cash-alternative instrument includes the name of the payee and can be transmitted by mail. The financial transaction system also issues paper for use as a negotiable instrument to pay bills. In either event, it is preferred that a PIN be replaced, supplemented, or even complemented with the name of the payee. The financial transaction system of the present invention also includes options for unique bill-paying centers (similar to those now found in libraries and used by senior citizens). The cash-alternative instrument is submitted and all bills are electronically transferred to the payees as value is debited from the instrument holder's account. Also, Bill payment can occur by phone or through the Internet or other electronic terminals. For utilities, direct debits from the account can be used to pay such bills. For such monthly payments, there is no need for the payee to know the payer, providing the instrument holder's account with anonymity. Since the transaction is processecj fy cgptμring the PAN, ^ny problems with the electronic transfer can be tracked through the system driver.

The instrument holder has the option of anonymity or no anonymity. |f tfie instrument holder is identified_, o the driver during acquisition, the instrument holder receives monthly statements, Otherwise, the instrument holder can receive printouts of account activity. In instances of anonymity, the cash-alternative instrμment is comparable to cash, leaving a minimal paper trail. In one preferred embodiment of the financial transaction system of the present invention, an electronic delivery system provides, and integrates full-service banking options to all participants - at the discretion and selection of the centralized system financial institution from a remote location. The present invention provides a financial transaction system that interlinks seamlessly the myriad of existing access services to provide comprehensive financial services from single or multiple customer locations not just to business customers, but also to anyone.

In another preferred embodiment of the present invention the money is available for investment by the centralized system financial institution. A portion of the return on investment is credited to the instrument holder's account as interest.

Conventional financial transaction systems involve the use of cash, checks, credit cards, debit cards, ATM cards, all of which are replaced by the financial transaction system of the present invention. In conventional credit card systems, the merchant pays the transaction fee. In the financial transaction system of the present invention the merchant receives part of the transaction fee. With conventional credit card systems there is a need to acquire the card, qualify, pay finance charges, monthly statements, penalty fees and late payment, annual fees, etc. These features are eliminated with the system of the present invention. In conventional credit card transactions, delays and bank approval are commonplace.

A single cash-alternative instrument replaces many of other cards. The cash-alternative instrument is programmable for all |D cards, discoμnt cards, credit cards, stored-value cards, passports, library cards, and even a driver's licenses. With the promotional aspect, numerous smaller prtøes are awarded as well as lottery or sweepstakes bonuses. Many other game formats are available for the promotional purposes.

The cash-alternative instrument of the present invention is not limited to ATM or debit cards, or any other card in particμlar. A cash-alternative-instrument dispensing machine may print a paper receipt upon request, which is a tangible record of the transaction. The receipt may contain information on winning prizes. The receipt can also be used for advertising purposes, and include coupons or game space. Points may be given for machine usage and redeemed for prizes, similar to "S&H green stamps."

No modification is necessary to the electronic transactions for the gaming variation other than to have existing machines electronically networked to a central computer where customer data is stored. This information is maintained by existing drivers or by a new driver specifically designed to process system and usage of the cash-alternative instrument. Paper receipts are optional and can be used to redeem prizes or play games. The paper receipts may contain a peel-off, a scratch off, or both. Also, plain paper games can be used with computer- generated winners.

In one embodiment, the cash-alternative instrument of the present invention enables a participant to play a promotional game with a progressive and self-generating jackpot. Progressive jackpots have been particularly popular in various promotional purposes such as fast-food restaurants and gas stations. One major advantage of sweepstakes and lottery-type jackpots with progressive play is that the jackpots are self-generating and are funded by transaction fees, monthly interest, and annual finance fees, a percentage of the fees being applied to the jackpot (see for example, U.S. Patent Application U.S.S.N. 08/667,407 entitled "Method and Apparatus for Promoting the use of Automatic Teller Machines by Karen Macaluso). Participants improve their chances to wjn by increased participation. A portion of the money received is pooled to build a jackpot - either smaller pη^'zes, a grand prize, or both. The sjze pf the jackpots grows with each financial transaction until there is a payout. All financial transactions participate in the progressive play, including POS transactions, ATM transactions, telephone purchases, and purchases over the Internet. The largest sweepstakes in the world is compatible with an inherent part of the system with minimal additional effort. By enabling participation of hundreds of thousands or even millions of everyone can play in the same game. In one variation in the gaming methods of the present invention, all instrument holders automatically participate with each transaction and have a chance to win. Such prizes can be international, national, regional, merchant-based, and even based upon each participant's use of the system. Also, the prizes can be bank wide, or generated by the driver exclusive or all types of transactions worldwide. Winners are randomly chosen from all users of system of the present invention, such system being in compliance with all national and regional laws, rules, regulations, and ordinances.

The self-generating jackpot feature of the present invention is not intended to be restricted to any particular form or arrangement, or any specific embodiment disclosed herein, or any specific use, since the same may be modified in various particulars or relations without departing from the spirit or scope of the invention, method or apparatus. Transaction fees and. interest generated by the_ centralized_system, financial institution are applied _to_ the jackpot and to provide other incentives for participants.

When a paper receipt is requested and issued to the participant, such receipt preferably includes an entry number for use in the jackpot game, or a prize coupon. The receipt paper is either stacked or rolled paper. One portion of the receipt, either the upper or lower portion includes financial information regarding the transaction, and the opposing portion includes the prize coupon. To redeem the coupon, the two portions are separated, as by tearing, and the participant retains the confidential information regarding the financial transaction. Participants are drawn to increased usage of the cash-alternative instrument of the present invention since entry into the jackpot occurs with each transaction. The coupons are redeemable for prizes and are used for advertising purposes by providers of goods and services. Additional state-of-the-art security is available and applicable to electronic commerce to protect the integrity of the system.

FIGURE 13 discloses a simplified logic diagram for use of a typical bartering system in combination with the preferred embodiment of the system of the present invention. Bartering can benefit the trading client in a number of key areas: by generating sales and generating new business contacts; by improving profitability, turning liabilities into assets; by utilizing excess production or business capacity; by moving sluggish inventory (trading excess or sluggish inventory and turning potential write-offs into profit); by conserving cash (providing an alternative method of payment that offsets business expenses and conserves cash); by guaranteeing collections (computerized record-keeping eliminates accounts receivable and collection problems); and through flexibility. The client controls trade volume, as only goods and services are traded as deemed appropriate to the needs of the participants. Similarly, FIGURE 14 discloses a simplified logic diagram for use of a typical secured loan in combination with the preferred embodiment of the system of the present invention that enables participants to engage in secured loans or pawnshop activities.

In another preferred embodiment shown in FIGURE 15, instead of receiving funds by a wire transfer or from Western Union_®, funds are transferred by a participant of the financial transaction system of the present invention without leaving home, being released from a hospital or nursing home. The person or entity transferring the funds uses an ATM, a telephone, a PC or handheld computer to complete the money transfer. The account can be credited to the transferee while the card is still in the user's wallet.

In another embodiment, the cash-alternative-instrument of the present invention is multipurpose and includes payment means in combination with access means that enables the holder access to a secure area (see for example U.S. Patent No. 4,677,284 or co-pending PCT Application No. PCT/US97/05736). If the card is used in a controlled environment, such as a hotel, casino, university, prison, cruise ship, resort, or the like, the card enables the instrument holder access to a gues^ room, dorm room, or prison cell within the controlled environment. FIGURE 11A discloses a schematic flowchart of a combination key/multipurpose stored-value cash-alternative-instrument of the present invention disclosing t e program logic for enabling a user to gain room access; and, FIGURE 11 B discloses a preferred embodiment of a functional block diagram of the preferred embodiment of FIGURE 11 A, the operating codes being disposed. on_the .multi-purpose. card _αf_ the__present invention opposite the card.

The electronic key-card has a set of data encoded on one ^nd portion thereof, preferabiy- either the same end portion as the cash-alternative instrument or the opposing end portion. The lock includes a multi-level memory with each level identified by an identification code. A combination code is stored at each memory level in memory. The set of data encoded on the key card comprises an identification code and a combination code. The data encoded on the guest room key is read into the lock by a cardreader. The lock may perform a number of predefined functions, such as opening the lock, changing the codes in multi-memory, or erasing the codes in multi-memory. The predefined functions are stored in a function table with each predefined function .identified by_ a. function .code,, .which, are also stored in the function table.

The lock includes a comparator for comparing the inputs to each other. Power to the lock is provided by a power source. The lock includes an installation code memory for storing an installation code. The installation code must be matched before a function may be performed. The control unit controls the activity of all the electronic components of the lock as described above, and is interactively engaged directly with the hotel or resort central computer.

The security system operation begins when the guest inserts the key-card into the cardreader, which reads the identification code. The control unit signals compare the key identification code to the code in the lock memory. If the identification codes match, power to the lock is disengaged except for the power necessary to maintain the data in memory. This sequence of events is termed "power down". After the lock performs the "power down" sequence, the operation of the security system is completed. If the identification code on the end of the user key does match the lock identification code, the- ontrol^~unit^_ signals a multi-leveh memoryτ o . transmit the -combinationrxode. at. the - memory level identified by the combination code from the key-card to the comparator. The control unit further signals the cardreader to transmit this combination code to the comparator. The combination codes from the key-card and the cardreader are compared. If the two combination codes match, the control unit signals the lock mechanism to open. After signaling the lock mechanism, the control unit performs the power down sequence, completing the operation of the system.

The system is also useful in any hotel to improve security involving on-site charging to a room. The principles of this invention are applicable to controlled environments other than resorts, hotel-casinos, hotels, and casinos. As used herein, unless the context suggests otherwise, a controlled environment is a community of people that: (1 ) requires registration to become a part of the community; and (2) where the purchase of goods or services occurs. Some examples of controlled environments include: hotels- resorts, luxury cruise liners, airports, banks, racetracks, bowling alleys, theme parks, hospitals, college campuses and public/ private schools, military bases, hotel-casinos, sports complexes, shopping malls, and prisons. Once enrolled into the cardless transaction system of the present invention, any guest upon registration with the hotel complex has full and complete access to any amenity within the complex, at anytime, without carrying on his/her user anything other than biometric identification that is inherent in his/her being. As used herein a "controlled environment" does not require a single physical structure, but rather includes a network of related activities administered by a centralized driver. Some examples of these types of controlled environments include a bank and its customers, a regional of drugstores, health club facilities, restaurants, or beauty salons and their customers.

Examples include: * hotels- resorts - the key provides access to the guest room and other private suites and for guest tracking while the cash-alternative instrument is used for all on-site purchases. * luxury cruise liners - the key provides access to the guest room while the cash- alternative instrument is used as a method of payment for all on-site purchases.

* airports - the_key provides access to priyate_ctuhs_for preferred passengers and security access for airport security personnel while the cash-alternative instrument is used as a method of payment for tickets, food, car rentals, etc.

* hotel-casinos - the key provides access to the guest room while the cash-alternative instrument is used for all purchases within the complex (particularly useful when chips and cash are not used for gaming - player tracking).

* racetracks, bowling alleys, pool halls - key is used for access to the facility and private rooms on site while the cash-alternative instrument is used as a method of payment for on-site purchases.

* theme parks - the key provides gate entry and entry to any private facilities within the park while the cash-alternative instrument is used as a method of payment within the park.

* hospitals - the key provides access to the patient rooms (private and semi-private) while the cash-alternative instrument is used for purposes of identification for treatment purposes and patient tracking and for purchases. The key can be used by physicians, nurses, and administrative personnel for access to secure areas, parking, access to patient records, and the cash-alternative instrument can be used for on-site purchases.

* college campuses and public/ private schools - the key provides access to the dorm and individual rooms and classrooms and for purposes of identification while the cash- alternative instrument is used for student aid requests, scholarships, and purchases on campus (cash-alternative instrument also used for identification for medical treatment).

* military bases - the key is used for identification for access into the base, secure areas within the base, and individual rooms and tracking while the cash-alternative instrument is used as a method of payment for purchases on-site.

* prisons - the key is used for cell access and inmate tracking while the cash-alternative instrument is used as a method of payment on site. * sports complexes - the key provides access to the gate and private suites while the cash- alternative instrument is used as a method of payment within the complex.

* shopping malls - the key provides access to the mall and private restaurants/suites and shopper tracking while the cash-alternative instrument is used as a method of payment on-site.

The cash-alternative instrument of the present invention provides a financial capability to an economic stratum of people who have no access to conventional banking services and also provides a certain degree of anonymity to people who may have access to such banking services. Such persons, whether or not they have a bank affiliation can gain ready access to funds from a large number of participating merchants, ensuring that a fair price is negotiated and the merchant is paid for goods or services provided. The cash-alternative instrument provides an alternative form of currency that can be used in diverse variety of financial transactions without using checks, cash, conventional credit cards, or money orders, and can be physically exchanged between parties, much the same as legal tender. The cash- alternative instrument is not only accepted in exchange for a broad range of goods and services, whether or not inside a controlled environment, but also includes other features - more specifically, security access.

The cash-alternative instrument is exchangeable between parties much the same as legal tender by use of the security identifier. The cash- alternative instrument provides access to a secure area within the controlled environment, and once issued inside the controlled environment the cash-alternative instrument is accepted and negotiable outside the controlled environment.

The cash-alternative instrument can be used in all types of electronic commerce (e.g. - POS terminals, Internet transactions, ATM's), to purchase a broad range of goods and services from many different participating merchants and service providers, that can be readily converted between currencies, and exchanged between parties. The multi-purpose cash-alternative instrument of the present invention provides an alternative to legal tender that can be used in a diverse variety of financial transactions without recourse- to checks, cash, conventional credit cards, or money orders. The multipurpose cash-alternative instrument with the security access means can be used, (1) as a pass to annual sporting events with access to the sports arena, (2) at airports - the key providing access to private clubs for preferred passengers while the cash-alternative instrument is used as a method of payment for tickets, food, car rentals, etc. (3) at hospitals - the key providing access to the patient rooms while the cash-alternative instrument is used to pay for on-site purchases.

The multi-function card may also include other functions, including but not limited to, an all- purpose identity card (preferably with a photo), an electronic gift certificate-card, a pre-paid phone card, a stored-value card, a loyalty card (either retailer-specific or product/manufacturer-specific), a medical information card (see for example - U.S. Patent 6,00,608 (Dorf)).

Throughout this application, various Patents and Applications are referenced by patent number and inventor. The disclosures of these Patents and Applications in their entireties are hereby incorporated by reference into this specification in order to more fully describe the state of the art to which this invention pertains.

It is evident that many alternatives, modifications, and variations of the financial transaction system and method of the present invention will be apparent to those skilled in the art in light of the disclosure herein. It is intended that the metes and bounds of the present invention be determined by the appended claims rather than by the language of the above specification; and that all such alternatives, modifications, and variations which form a conjointly cooperative equivalent are intended to be included within the spirit and scope of these claims.

Claims

1. A cash-alternative instrument for use in financial transactions, the cash-alternative instrument ^" comprising machine-readable data that is assigned to the cash-alternative instrument either prior to or at- the time-of acquisition, the machine-readable data being readable by an automatic data reader, the machine- readable data linking the cash-alternative instrument to a user-account, the user-account having an account value, the account value less any transaction fees being available to an instrument holder to pay for goods and services;

2. A cash-alternative instrument of Claim 1 , wherein the cash-alternative instrument is only issued to a user only in exchange for legal tender.

3. A cash-alternative instrument of Claim 1, wherein the cash-alternative instrument can be converted from a currency of payment into a currency of deposit at the time of acquisition.

4. A cash-alternative instrument of Claim 1 , wherein the cash-alternative instrument can be converted from a currency of deposit into a currency of payment during routine usage of the cash-alternative instrument for payment.

5. A cash-alternative instrument of Claim 1 , wherein the cash-alternative instrument is he shape and size of a conventional credit card, the cash-alternative instrument being compatible with card-based systems and includes data that can be read by a conventional cardreader.

6. A cash-alternative instrument of Claim 1 , wherein the cash-alternative instrument is compatible with electronic commerce enabling account access from a participating POS terminal or ATM terminal.

7. A cash-alternative instrument of Claim 1 , wherein the cash-alternative instrument is exchangeable between parties for payment for goods and services similar to an exchange of legal tender for payment for goods and services.

8. A cash-alternative instrument of Claim 1 , wherein payment to an instrument holder is guaranteed by the centralized system financial institution.

9. A cash-alternative instrument of Claim 1 , wherein the cash-alternative instrument creates a user-account that can receive payments from or disburse payment to other accounts without the user ever needing to submit personal data to any financial institution.

10. A cash-alternative instrument of Claim 1 , wherein the user account need have no personal data regarding the user.

11. A financial transaction system comprising:

a cash-alternative instrument for use by an instrument holder in financial transactions, the cash-alternative instrument being obtained at an acquisition site, an initial value of the cash-alternative instrument being determined by the user at the time of acquisition, the cash-alternative instrument including a user identifier enabling matching of the cash- alternative instrument with a participant account;

a centralized system financial institution whereat that assumes responsibility for banking the initial value submitted by the user during acquisition, account value of the participant account being subsequently credited upon the pre-payment of additional value, account value of the participant account being subsequent debited during a financial transaction of an exchange of value for goods or services; a system driver for managing financial transactions, the system driver processing the user identifier-to select- the participant account, the system driver adjusting the account value of the participant account relative to subsequent financial transaction; and

at least one participating terminal whereat a financial transaction occurs.

12. The financial transaction system of Claim 11 , wherein the cash - lternative instrument is issued to a user only in exchange for legal tender.

13. The financial transaction system of Claim 11 , wherein the cash-alternative instrument can be converted from a currency of payment into a currency of deposit at the time of acquisition.

14. The financial transaction system of Claim 11 , wherein the cash-alternative instrument can be converted from a currency of deposit into a currency of payment during routine usage for payment.

15. A cash-alternative instrument of Claim 11, wherein the cash-alternative instrument is he shape and size of a conventional credit card, the cash-alternative instrument being compatible with card-based systems and includes data that can be read by a conventional cardreader.

16. The financial transaction system of Claim 11 , wherein the cash-alternative instrument enables the instrument holder to participate in a card-based economy without ever having to submit personal data to a financial institution.

17. The financial transaction system of Claim 11 , wherein the cash-alternative instrument is exchangeable between parties for payment for goods and services similar to payment for goods and services with legal tender.

18. The financial transaction system of Claim 11 , wherein payment to an instrument holder is guaranteed by the centralized system financial institution rather than a government treasury.

19. The financial transaction system of Claim 11 , wherein the cash-alternative instrument creates a user-account that can receive payments from or disburse payment to other accounts without the user ever needing to submit personal data to any financial institution.

20. The financial transaction system of Claim 11 , wherein the cash-alternative instrument can be acquired-by-a-user-having no bank affiliation.

21. A method for generating a participant account at a centralized system financial institution, the method comprising:

selecting an initial-value for acquisition O the .participant .account .at _the centralized _ system financial institution at an acquisition site,

submitting payment for the initial value of the cash-alternative instrument at the acquisition site;

establishing the participant account with the centralized system financial institution after payment has been received, there being no need for the user to submit application data to the centralized system financial institution to establish the account, account value of the participant account being generally the same as the initial value less transaction fees; and

issuing a cash-alternative instrument to the participant.

22. The method for using the cash-alternative instrument of Claim 21 , wherein the cash- alternative instrument can be issued to a user only in exchange for -legal tender. _

23. -The method for using the cash-alternative instrument of Claim 21 , wherein the cash- alternative instrument can be converted from a currency of payment into a currency of deposit at the time of acquisition.

24. The method for using the cash-alternative instrument of Claim 21 , wherein the cash- alternative instrument can be converted from a currency of deposit into a currency of payment during routine usage for payment

25. The method for using the cash-alternative instrument of Claim 21 , wherein the cash- alternative instrument enables the instrument holder to participate in a card-based economy without ever having to submit personal data to a financial institution.

26. The method for using the cash-alternative instrument of Claim 21 , wherein the cash- alternative instrument is exchangeable between parties for payment for goods and services similar to payment for goods and services with legal tender.

27. The method for using the cash-alternative instrument of Claim 21, wherein payment to an instrument holder is guaranteed by a centralized system financial institution rather than a government treasury.

28. The method for using the cash-alternative instrument of Claim 21 , wherein the cash- alternative instrument creates a user-account that can receive payments from or disburse payment to other accounts without the user ever needing to submit personal data to any financial institution.

29. The method for using the cash-alternative instrument of Claim 21 , wherein the cash- alternative instrument can be acquired by a user having no bank affiliation.

30. A-method for using a cash-alternative instrument in a financial transaction, the method comprising:

selecting an amount to be paid to another party in the financial transaction

submitting the cash-alternative instrument for payment of the amount, an instrument identifier being submitted with the payment request, the instrument identifier being associated with an account at a system financial institution;

debiting a participant account at a centralized system financial institution and crediting an acceptor account at an acceptor financial institution upon approval of the financial transaction, the participant account being associated with the cash-alternative instrument

31. The method for using the cash-alternative instrument of Claim 30, wherein the cash- alternative instrument can be issued to a user only in exchange for legal tender.

32. The method for using the cash-alternative instrument of Claim 30, wherein the cash- alternative instrument can be converted from a currency of payment into a currency of deposit at the time of acquisition.

33. The method for using the cash-alternative instrument of Claim 30, wherein the cash- alternative instrument can be converted from a currency of deposit into a currency of payment during routine usage for payment.

34. The method for using the cash-alternative instrument of Claim 30, wherein the cash- alternative instrument enables the instrument holder to participate in a card-based economy without ever having to submit personal data to a financial institution.

35. The method for using the cash-alternative instrument of Claim 30, wherein the cash- alternative instrument is exchangeable between parties for payment for goods and services similar to payment for goods and services with legal tender.

36. The method for using the cash-alternative instrument of Claim 30, wherein payment to an instrument holder is guaranteed by a centralized system financial institution rather than a government treasury.

37. The method for using the cash-alternative instrument of Claim 30, wherein the cash- alternative instrument creates a user-account that can receive payments from or disburse payment to other accounts without the user ever needing to submit personal data to any financial institution.

38. The method for using the cash-alternative instrument of Claim 30, wherein the cash- alternative instrument can be acquired by a user having no bank affiliation.

39. A method of distributing designated funds to a recipient, the method comprising:

identifying a recipient desiring direct deposit of revenue into a recipient account, the recipient being unaffiliated with a system financial institution;

establishing a recipient account for the recipient with the system financial institution;

debiting value of the designated funds from a distributor account; and crediting the recipient account with value of the designated funds.

40. A system for distributing revenue to a recipient, the method comprising:

means for identifying a recipient desiring direct deposit of revenue, the recipient being unaffiliated with a system financial institution;

means for establishing a recipient account for the recipient with the system financial institution;

means for crediting the recipient account with designated revenue; and

means for debiting a master account for amount of the designated revenue, revenue value being available to the recipient with a cash-alternative instrument.

41. A method of transmitting funds from a first entity disposed at a first site to a second entity disposed at a second site, the method comprising:

initiating a request by the first entity at the first site for a fund transfer of an amount from a financial institution associated with the first entity to the second entity through a system financial institution;

debiting the account of the financial institution of the first entity;

crediting the account of the second entity with the amount value at the system financial institution, the system financial institution being unaffiliated with the second entity prior to the fund transfer; and electronically., dispensing the amount from the_firstjentity.at the first site .to the_second_ entity at the second site.

42. A financial transaction systemf or transmittingTunds from a first entity disposed at a first site to a second entity disposed at a second site, the system comprising:

means for initiating a request by the first entity at the first site for a fund transfer of an amount from a financial institution associated with the first entity to the second entity through a system financial institution;

means for debiting the account of the financial institution of the first entity;

means for crediting the account of the second entity with the amount value at the system financial institution, the system financial institution being unaffiliated with the second entity prior to the fund transfer; and

means for electronically dispensing the amount from the first entity at the first site to the second entity at the second site.