WO2009019602A2

WO2009019602A2 - A system and a method of handling a multifunction transaction

Info

Publication number: WO2009019602A2
Application number: PCT/IB2008/002424
Authority: WO
Inventors: Ralph Mahmoud Omar
Original assignee: Ralph Mahmoud Omar
Priority date: 2007-08-03
Filing date: 2008-09-17
Publication date: 2009-02-12
Also published as: MY191823A; TR200805734A2; ZA201000336B; CN101790743A; WO2009019602A3; US20090037311A1; MA31212B1

Abstract

A System for processing a multifunctional ticket is described. The ticket represents an entry item in both a short-term multiple-entry event and a long- term event. The System comprises: receiving means for receiving a request for a user entry into the short-term multiple-entry event; authorising means for implementing an authorisation event authorising the request, the authorising means being arranged to generate a unique ticket identifier associated with the user entry; first storing means for storing the unique ticket identifier and a timestamp relating to the request authorisation event in a database record relating to a first function of the ticket; identification obtaining means for obtaining owner identifier information relating to an owner of the multifunction ticket independently of the authorisation event; and second storing means for storing the owner identifier information, the unique ticket identifier or an identifier uniquely associated with the ticket identifier and the timestamp or a date associated with the timestamp in a database record relating to a second function of the ticket, wherein the first and second functions are executed on différent timescales and the first function relates to the short-term event and the second function relates to the long-term event.

Description

A System for and a Method of Handling a Multifunction Transaction

Field of the Invention

The present invention relates to a system for and a method of handling a multifunction transaction. More specifically, though not exclusively, the present invention relates to a method of and a system for handling a new multifunction transaction, which supports a new financial instrument that is more attractive than previous financial instruments, but which at the same time complies with strict Islamic law (and/or other sets of laws or regulations which impose strict limitations on the functional operation of those instruments) on validly derivable benefits from such transactions. The present invention is directed to the technical system and method of handling such new multifunction transactions rather than the new financial instrument itself.

Background of the Invention

The present invention arises out of a long felt need to provide attraction to long-term financial investment products within the constraints of an acceptable instrument under a country's constrained financial laws, such as Sharia'h law (Islamic Law). Creating an instrument which can accord with these laws places technical constraints on any system handling such new financial instruments. Overcoming these technical constraints represents a technical problem to which the present invention is directed. Therefore, in order to understand these constraints to which the present technical invention needs to comply, some explanation of the prohibitions in complex Sharia'h law needs to be understood. This is set out below only as background information to understanding the present invention.

The Principles and Main Products of Islamic Finance.

Interest vs. Usury. The basic principle of Islamic banking is the prohibition of Riba, which can paradoxically be translated as usury or interest. This creates some disagreement amongst Islamic scholars. The literal meaning of interest or AI-RIBA as it is used in the Arabic language means to exceed or increase. In mainstream Islamic terminology, interest is synonymous with usury and means effortless profit or that profit which comes free from compensation or that extra earning obtained that is free of exchange of efforts or risk. One scholar Hazrat Shah Waliullah Dehlvi says, "Riba^' is a loan with the condition that the borrower will return to the lender more than and better than the quantity borrowed."

Islamic principles of finance are based on a well-established rule which dictates that "The benefit of a thing is a return for the liability for loss from that thing". So a sharing of risk is accepted and the avoidance of unequal transactions offering riskless or unearned rewards unaccepted.

Islamic finance eschews any interest based transactions, yet at times in the recent past zero coupon bonds and other interest based constructions more usually found in the arsenal of Western financial institutions have been used, but are now falling into disuse.

There is a considerable degree of debate over the difference in the meaning between interest and usury.

Interest by contrast to Riba or "usury" is an English word and herein lies the misunderstanding under which some scholars define Riba as interest and others as Usury, allowing for different forms of financial approach.

Scholars like Mohammad Fadel hold conflicting views in which Riba is of two types, riba duyun (riba of debts) and riba buyu (riba of sales). The former is what the Quran refers to as a war against God and His Prophet. The latter is something specifically prohibited by the Prophet in his sunna. Those transactions described as involving riba by the sunna were not understood to involve riba by the Arabs at the time of the revelation.

Riba duyun, occurs when a creditor agrees to allow his debtor to delay payment of a matured debt in exchange for an increase in the indebtedness.

For example, A owes B $100 on 1/1. On 1/1 B is unable to pay A so A agrees not to collect his debt until 2/1 in exchange for B agreeing to pay him $110 instead of $100. This is an increase on a pre-existing indebtedness, and for that reason is called riba dayn or riba duyun (the increase of a debt). This transaction is categorically prohibited. It is called riba al-jahiliyya, or the usury of the time preceding Islam, jahiliyya not having its full potential meaning, that of 'ignorance'. It is specifically this transaction that the Arabs understood riba to include.

The riba of the sunna applies to certain types of sales transactions, both immediate exchanges as well as credit exchanges. It is commodity specific. The riba that is specific to immediate exchanges is called riba al-fadl. The basic rule is that immediate exchange is not subject to the rules of riba unless there is some dalil or evidence that the commodity in question is subject to the specific rules of riba al-fadl. As long as the commodities are generically different, the rules of riba al-fadl are never an obstacle to immediate exchanges. Thus, while 1 pound of high-quality dates for 2 pounds of lower quality dates is prohibited on the grounds of riba al-fadl, 1 pound of high quality dates for 2 pounds of wheat is not riba al-fadl, even if the wheat is then traded for 2 pounds of the lower quality dates.

The riba that applies to credit sales is called riba nasi'a. Nasi'a means delay. Again the same structure applies. Credit sales are not subject to the rules of riba nasi'a unless there is evidence that the commodity that is traded has been marked out for special regulation. The cause of prohibition in this type of riba, is merely delay in exchange (nasi'a), and not the difference in cash price and credit price. Again, to give an example, the sale of a car whose cash price is $10,000 for $12,000 on credit, payable over 5 years, for example, is not prohibited under the rules of riba nasi'a: according to the fuqaha' the commodity simply has two different prices, a cash price and a credit price. Nor does this transaction implicate riba duyun because the purchaser is incurring a debt, not increasing the value of a pre-existing indebtedness in exchange for more time to pay off the debt. Therefore, it also does not involve riba al- jahiliyya. According to economists, the difference in price is a function of the time value of money, i.e., interest. Therefore, the terms riba and interest are not synonymous, and Fadel thus believes that Muslims should cease confusing one for the other. Some riba is interest, but not all, e.g., trading one pound of high quality dates for two pounds of lesser quality dates does not implicate the time value of money at all, yet Islam describes it as riba. Likewise, some interest is riba, but not all: if I owe the bank $100 and agree to defer payment of the debt in exchange for increasing my indebtedness, that is both interest and riba. However, if I buy a car on credit, I will be paying interest, but not riba.

The main principles of Islamic banking a) Any predetermined payment over and above the actual amount of principal is prohibited.

Islam allows only one kind of loan and that is qard-el-hassan (literally good loan) whereby the lender does not charge any interest or additional amount over the money lent. Traditional Muslim jurists have construed this principle so strictly that, according to one commentator "this prohibition applies to any advantage or benefits that the lender might secure out of the qard (loan), such as riding the borrower's mule, eating at his table, or even taking advantage of the shade of his wall." The principle derived from the quotation emphasises that associated or indirect benefits are prohibited.

b) The lender must share in the profits or losses arising out of the enterprise for which the money was lent.

Islam encourages Muslims to invest their money and to become partners in order to share profits and risks in the business instead of becoming creditors. As defined in the Sharia'h, Islamic finance is based on the belief that the provider of capital and the user of capital should equally share the risks and successes of business ventures, whether those are industries, farms, service companies or simple trade deals. Translated into banking terms, the depositor, the bank and the borrower should all share the risks and the rewards of financing business ventures. This is unlike the interest-based commercial banking system, where all the pressure is on the borrower: he must pay back his loan, with the agreed interest, regardless of the success or failure of his venture.

Islam encourages investments in order that the community may benefit. However, it is not willing to allow a loophole to exist for those who do not wish to invest and take risks, but to hoard money or deposit money in a bank in return for receiving an increase on these funds for no risk (other than the bank becoming insolvent). Accordingly, under Islam, either people invest with risk, or suffer loss through devaluation by inflation by keeping their money idle. Islam encourages the notion of higher risks and higher returns and promotes it by leaving no other avenue available to investors. The objective is that high risk investments provide a stimulus to the economy and encourage entrepreneurs to maximise their efforts.

c) Making money from money is not lslamically acceptable.

Money is only a medium of exchange, a way of defining the value of a thing; it has no value in itself, and therefore should not be allowed to give rise to more money, via fixed interest payments, simply by being put in a bank or lent to someone else. The human effort, initiative, and risk involved in a productive venture are more important than the money used to finance it. Muslim jurists consider money as potential capital rather than capital, meaning that money becomes capital only when it is invested in business. Accordingly, money advanced to a business as a loan is regarded as a debt of the business and not capital and, as such, it is not entitled to any return (i.e. interest).

Muslims are encouraged to purchase and are discouraged from keeping money idle so that, for instance, hoarding money is regarded as being unacceptable. In Islam, money represents purchasing power, which is considered to be the only proper use of money. This purchasing power

(money) cannot be used to make more purchasing power (money) without undergoing the intermediate step of it being used for the purchase of goods and services.

d) Gharar (Uncertainty) is also prohibited. Under this prohibition any transaction entered into should be free from uncertainty, which by some is sometimes expanded in meaning to include risk and speculation. Contracting parties should have perfect knowledge of the counter values intended to be exchanged as a result of their transactions. Also, parties cannot predetermine a guaranteed profit. This is based on the principle of 'uncertain gains', which on a strict interpretation, does not even allow an undertaking from the customer to repay the borrowed principal plus an amount to take into account inflation. The rationale behind the prohibition is the wish to protect the weak from exploitation. Therefore, options and futures are considered as un-lslamic and so are forward foreign exchange transactions because rates are determined by interest differentials.

A number of Islamic scholars disapprove the indexation of indebtedness to inflation and explain this prohibition within the framework of qard-el-hassan. According to those scholars, the creditor advances the loan to win the blessings of Allah and expects to obtain the reward from Allah alone.

A number of transactions are treated as exceptions to the principle of gharar: sales with advanced payment (bai' bithaman ajil); contract to manufacture (Istisna); and hire contract (Ijara). However, there are legal requirements for the conclusion of these contracts to be organised in a way which minimises risk.

e) Investments should only support practices or products that are not forbidden by Islam.

Trade in alcohol, for example would not be financed by an Islamic bank; a real-estate loan could not be made for the construction of a casino; and the bank could not lend money to other banks at interest.

Permissible Instruments & Schemes.

There are thus a resulting number of transactions that eschew interest and avoid other prohibitions and are thus considered HaIaI or permissible under Islamic law and which are potentially to be used as the basis of creating Islamic instruments. These are:- Murabaha Mudaraba Musharaka Muqarada Ijarah Salam lstisna

Bay Bithamin AjH (BBA)

The Definition of Gambling & the Difference Between Gambling & Speculation

Put simply, as done by the early jurists or fuquaha, in Islam gambling is a game in which one party wins while the other loses. Moreover every transaction in which gain and loss is obscure is known as Qimaar' and 'Maysir' in the Sharia'h terminology.

Several scholars have addressed the issue of whether speculation in the stock market, which perforce involves a level of skill, is similar to gambling, from different angles. Kamali (1996) defines speculation as consisting of "the intelligent and rational forecasting of future price trends on the basis of evidence and knowledge of past and present conditions". Based on the

Quranic verses and the Hadith of the Prophet, lbn Taymiyah pointed out that if a sale contains Gharar and devours the property of others, it is the same as gambling, which is clearly forbidden. Therefore, for a transaction to be equated to gambling, it must involve the devouring and unlawful appropriation of the property of others. Against this backdrop, speculative risk taking in commerce, which involves the investment of assets, skills and labour, therefore is not similar to gambling. This is because the buyer is engaged in a transaction aimed at making profit through trading and not through simple appropriation of the property of others. Whilst for some Muslims speculation in the stock markets may look like gambling, yet it is by no means akin to gambling. Speculation has both pros and cons from the Islamic point of view. Its positive side is that it can help stabilize prices and activate a market where there is thin trading. It can also provide signals to less-informed investors upon which to act. The negative effect of speculation is that excessive amounts of it may cause volatile price movements in the market. Most Muslims therefore conclude that excessive speculation should not be allowed, but a reasonable degree of it be permitted. Quantitative limits on daily trading volume and legislative guidelines may help contain speculation within healthy bounds, however no workable definition of what separates excessive from reasonable speculation has been developed.

Furthermore, any kind of financial transaction with financial uncertainty and risk attached to the transaction itself is also forbidden and hence the religion of Islam forbids this jointly together with all types of gambling including lotteries, wagering, and casinos.

It should be emphasized that Islam does not prohibit a contract just because it involves risk. Only when risk is a channel to make one party profits at the expense of the other that it becomes Gharar, which is forbidden.

A crucial aspect of the zero-sum measure is that it is based on gains and losses of each player. The question thus arises as to how one can decide on the criterion by which one is considered losing or gaining? For example, it might be argued that seller of a lost camel does not lose anything. Since the camel is already lost, he does not lose by selling it. In fact, his level of wealth is higher than without sale even if the camel is found. So how can he be a loser?

The answer is that he loses a potential gain that he was entitled to had he not sold the camel. To clarify this point, suppose the camel is worth 1000 dollars, and that the camel is found by pure chance. Suppose that the seller believes the chance of finding the camel is 20%. Then he will not accept a price less than 0.2(1000) = 200. If the chance is 40%, then he will ask for 400 instead. Why? Because this is what the seller is giving up. What the buyer benefits from the contract is what the seller gives up as a forgone profit. Had the owner not sold the camel, he could have found it himself and enjoyed its full market price. So if the camel is found, the seller loses the difference between its market value, which he was entitled to, and the price he received, i.e. 200 - 1000 = -800, which is exactly the same amount that the buyer wins. If the camel is not found, the seller wins the price, 200, that the buyer loses. So it is a zero-sum game where one party wins only at the expense of the other. However, a theoretic gain alone would not be covered, i.e. if the camel was not yet owned or at least had been in the possession of the seller, then the western economist concept of opportunity cost would not suffice.

In many respects, stock markets are viewed by some as gambling casinos. Many practices in these markets are considered Gharar, and therefore bear a strong resemblance to gambling. A legitimate question, however, arises concerning the difference between buying a lottery ticket and buying a share in the stock market. A clear difference is that a lottery is a zero-sum game: The winner of a lottery wins only at the expense of the others. In a stock market, all participants might win when economic conditions are favourable. Collective winning in a lottery is impossible, but feasible in a stock market. Thus the former is a zero-sum game but the latter is not meaning that the zero-sum measure is clearly based on economic understanding of exchange. Here one finds a criterion stated by Sharia'h rules and maxims. Not surprisingly, but contrary to a common belief, there exists a well-defined and clear measure of Gharar in Sharia'h: It is the established Hadith "liability justifies utility or return"

Liability Justifies Return

Generally speaking, almost all unlawful transactions violate this maxim, including Gharar. The term "liability" in the Hadith by its nature involves risk. It means assuming the risk of loss or damage of the asset such that it is no more beneficial or utilizable. The "liability justifies utility" maxim establishes the principle of "justice" in Islamic economics. Rights and obligations must be balanced - though not exactly or equally, and this balance is essential for proper economic incentives. Thus whilst it can be easily seen that eating other's money for nothing necessarily implies imbalance between rights and obligations for each party, the problem is in measuring unequal returns and risks. That is, the zero-sum structure is unjust, as lbn Taymiah points out.

The Premium Bond Market & LLDAs. Governments in countries where gambling is forbidden or restricted have also attempted secondary initiatives by bringing in gambling like instruments underneath ordinary financial market regimes.

Thus partly in response to initiatives at the start of the 90s in a variety of Muslim countries by the present inventor and partly in response to the results of the UK Premium bond scheme, Governments and banks around the world have introduced savings instruments that combine savings with a lottery including traditional premium Bonds and lottery linked bank accounts. Lottery- linked bank accounts are thus not a new idea. They represent a subset of the range of actual and hypothetical securities with randomized payoffs.

The basic structure of a Lottery Linked Deposit Account (LLDA) is simple. Typically, the bank automatically enrols in a lottery those depositors who maintain a deposit of some specified size for some specified period in the designated accounts. Commonly, the depositor receives one lottery ticket or chance, each month for every X dollars he has on deposit for that month. The buyer pays for her lottery tickets by foregoing interest relative to an account that does not have the lottery feature. The lottery does not affect the principal of the bond or deposit, but the interest rate that the holder receives each period is a random variable. The interest rate the holder actually receives could be very low (perhaps zero or only nominal, depending on the scheme's structure) or it could be very high, if the owner is lucky enough to win the grand prize.

The issuer's incentive to offer the accounts or bonds is that savers like the lottery feature and reward the issuers by accepting a lower return on the accounts than they would receive on an account that provided a certain return. The account holders may be accepting a bet that is unfair to them, or not.

The lottery feature may simply be a marketing device that differentiates the account from other types of savings instruments. Equally, the accounts may lower the offering bank's cost of funds. When the lottery is not a - fair game" i.e., when the expected value of a ticket is less than the foregone interest, the bank gains.

For the bank offering the LLDA, the monetary cost is deterministic, not random, and consists of three components: administrative costs, an explicit interest cost, and then lottery payout. Both regular deposit accounts and LLDAs require administration and it appears that the administrative costs are higher for LLDAs than for regular accounts. The LLDAs are interest bearing, but at a rate that is one-half or two-thirds that of regular savings deposits. As for the lottery component, the bank announces, in advance, a payout that is independent of the amount in qualifying accounts. Unlike the situation with many state lotto games, all prizes are awarded and there is no rollover. Over time the banks can adjust the number and value of the prizes to the number of qualifying accounts to maintain a target expected value and competition between banks should lead to at least periodic adjustment. Periodically banks would have to change the prizes to maintain customers' interest.

Offering LLDAs is subject to both production and consumption economies of scale. The bank has to invest in the computer program to assign the chances to accounts, and to pick the winning account. It also has to advertise the accounts. These investments are a fixed cost that does not increase with the number of accounts the bank holds. There may also be another benefit to scale. Small banks cannot match the large banks in terms of the frequency and the richness of the prizes and as this matters to the demand for a lottery this has resulted in several small U.S. states banding together to offer joint lotteries. Although a small bank with its less frequent prizes may match a larger bank in terms of the expected value of its accounts, it may suffer from a marketing disadvantage people often predict by representativeness and overestimate the probability of rare, salient events. A bank that advertises winners more frequently than its competitors may benefit from such effects. Lastly, the larger bank can more readily increase the skewness of its payouts.

Banks offering LLDAs have to know how to market the accounts. This involves not just advertising, but also the management of the prizes in terms of their structure and composition so that periodically their banks would have to change the prizes to maintain customer's interest.

In considering a solution to the above-described problem, the issue of how to implement the innovative solution also needs to be considered. This may also result in further challenges which need to be overcome.

It is desired to overcome the problems outlined above. More specifically, it is desired to provide a system for and a method of handling and processing a new multifunctional transaction which complies with Sharia'h Law (and/or other sets of laws or regulations which impose strict limitations on the functional operation of those instruments) and one which reduces the administration burden.

Summary of Invention

According to one aspect of the present invention there is provided a system for processing a multifunctional ticket, the ticket representing an entry item in both a short-term multiple-entry event and a long-term event, the system comprising: receiving means for receiving a request for a user entry into the short-term multiple-entry event; authorising means for implementing an authorisation event authorising the request, the authorising means being arranged to generate a unique ticket identifier associated with the user entry; first storing means for storing the unique ticket identifier, and a timestamp relating to the request authorisation event in a database record relating to a first function of the ticket; identification obtaining means for obtaining owner identifier information relating to an owner of the multifunction ticket independently of the authorisation event; and second storing means for storing the owner identifier information, the unique ticket identifier or an identifier uniquely associated with the ticket identifier and the timestamp or a date associated with the timestamp in a database record relating to a second function of the ticket, wherein the first and second functions are executed on different timescales and the first function relates to the short-term event and the second function relates to the long-term event.

It is to be appreciated that the term 'long-term' is intended to have a specific meaning of a time period over at least six years, preferably over ten years and possibly over twenty years. Also, the term 'medium-term' is intended to mean a year to four years and the term 'short-term' is intended to have a specific meaning of less than a year, preferably one or two months.

The system of the present invention is arranged to handle a new type of financial investment instrument which is compliant with Sharia'h law for example (and/or other sets of laws or regulations which impose strict limitations on the functional operation of those instruments), which is hereinafter referred to as a new prize incentive bond. The characteristics of the new instrument create difficulties in system implementation which are addressed by the present invention. The new prize incentive bond is based on an appreciation that the financial conditions defined by Sharia'h law can be accommodated in an enhanced long-term investment vehicle which has a short-term marketing aspect associated with it. Typically, that short-term marketing concept is an automatically selected or self-selected number-based prize scheme, which can help to market the long-term financial investment vehicle attached to it. This has the advantage of enhancing the attractiveness of the long-term financial investment to the user.

The main concept underlying the acceptability in Sharia'h Law of the new prize incentive bond is that the consideration paid for the prize incentive is fully refunded by the long-term investment whilst at the same time being able to be used for a short-term prize event. This is not considered to be gambling as is prohibited by Sharia'h Law because the consideration (i.e. purchase money etc.) can be fully recovered at the end of the long-term. As there is technically no consideration for the prize aspect of the prize incentive bond, so too technically the purchaser cannot be a loser. And as there is no longer a loser, then this is no longer a zero-sum game with uncertainty or Gharar as it is known in Islamic law. Accordingly, this new prize incentive bond, which is handled and processed by the system of present invention, is permissible.

The combining of a short-term and a long-term event which underpins the new type of financial instrument in itself creates a technical difficulty in implementation. This is because the considerations and requirements for a short-term function are in many respects very different to those of a long-term event and lead to incompatibility issues. For example, for the short-term event it is important that the user can validate their tickets quickly and at many different types of purchase outlet. The very nature of such transactions requires the ticket to be cheap and have a relatively short operational life. Also the ticket itself in these short-term events typically acts as the only user record of the transaction and gives its owner its short-term value if any.

Conversely, a long-term event is by its very nature a more substantial issue and the ticket needs to be able to provide a means of being able to participate in the long-term event in a reliable manner. It also typically involves a different providing entity to that of the short-term event and usually requires registration, as otherwise it would become similar in nature to a bearer bond.

With registration comes the issue of proof of identity which slows down interaction with the terminal.

These incompatibility issues are discussed in greater detail later and are addressed by the technical solution provided by the present invention.

The prize incentive bond achieves permissibility by effectively creating a multifunction (long-term event and short-term event) capability. More specifically, a portion of the consideration provided by the customer to buy his ticket is placed into one form of economic transaction, usually the purchase of a capital/financial market instrument of some nature (whether equity or future or option or debt or other financial transaction is unimportant for the principle to work), and another portion is used for a short-term prize based event in which the customer has active participation by determining a user-selected option. Accordingly, the nature of the whole transaction is changed to be legally compliant. This is thus termed the abstraction method of implementing the Acceptability Principle (the Acceptability Principle being partly derived from the idea that by divorcing the opportunity from winning a prize from paying for that opportunity such that where the opportunity to win a prize is removed from the payment for that opportunity except by the means of foregoing another opportunity to earn interest, the prize earning opportunity is no longer considered gaming). By making the prize-earning opportunity instrument acceptable, it enables the long-term financial investment to become more attractive without contravening Islamic law.

A way of considering the new instrument, which the present invention handles, is to consider it to be akin to a modified premium bond style product. However, the new type of transaction instrument referred to above is very different from a conventional premium bond in several ways. Firstly, a normal premium bond repays or has the ability to repay its principal or face value at par within a relatively short period of its purchase by the customer - usually within a short to medium term, i.e. from a few months (short) to one to four years (medium). Secondly, the prize of a premium bond is thus on the whole quite a bit smaller than that usually associated with a short-term prize draw for example as the prize is normally drawn from a short-term interest rate pool as premium bonds tend not to pay dividends or interest until the expiry of up to one to two years. Thirdly, premium bonds are usually not anonymous and have to be registered in some way to the purchaser. Otherwise, if they were bearer redeemable, the transaction costs of producing them and selling them would become very high, as the bond itself would have to include security devices equal to or greater than cash as they would be tempting for a forger. Fourthly, premium bonds have no long-term event (such as a redemption event) associated with them, they are redeemable at any time after an initial period after purchase. Further, premium bonds often require a minimum number to be purchased, for example one hundred £1 premium bonds, so as to cover the cost of the sale through a secure outlet which is relatively high. Lastly, premium bonds often entitle the holder to enter multiple draws further reducing the prize pool.

It is important to understand the attributes and variations of the new prize incentive bond in order to better understand the problems, which present invention's method and system for handling and processing the bond, addresses. Accordingly, set out below are some further details regarding the new transactional instrument.

The prize incentive bond has a relatively low value, but is used to purchase a financial instrument/guaranteed investment of some description, on the purchaser's behalf, paying a predictable sum at a certain long-term date - (akin to a Zero Coupon Bond etc although not equivalent where a pure Islamic interest eschewing structure is required). The term 'low value' is intended to imply a value less than £10 and preferably £1 akin to the cost of a typical lottery ticket. As mentioned previously, the bond also has an element which is used for a short-term prize draw which is otherwise normal, except for the fact that only a part of the purchaser's (player's) relatively low-value original stake is used for the prize draw, namely it acts as an incentive to purchase the long- term bond.

This use of part of the purchaser's stake to purchase a financial instrument of some description on his behalf in this fashion is in order to insure the real potential full return of his original stake at some point in the future. Such real potential stake return transforms the prize incentive ticket from being considered potentially as a gambling instrument into a financial instrument of some sort e.g. a debt and/or equity instrument. The actual future date of return (and thus the type of investment picked) is long-term (as described before) but can be determined by different factors which can depend on the legal regime governing capital markets, the preferences of the local state sponsoring organisations, the preferences of the local purchasers and what delay before the return of his original stake the player is willing to tolerate. There are multiple alternatives to this approach which return the full amount of the original stake at only one specific (long-term) time in the future. These alternatives can be tailored according to local requirements; e.g. part or all of the amount that would have been placed in a zero-coupon type of investment maturing at some single point in the future, may be turned into a multiple coupon investment paying interest dividends at intervals thus eventually adding up to the total stake amount originally ventured by the purchasers Alternatively, the investment may be placed in an equity and/or future fund i.e. offsetting the player's opportunity of being given a definite date when his money is guaranteed to be returned, in return for his having the non- guaranteed chance of an even earlier redemption (possibly with profits). Also conceptually by delaying the guaranteed date of payback, therefore releasing more of the original amount from placement in instruments (with a guaranteed return) to placement in non-guaranteed investments, the purchasers could be offered a low-rate of return on top of the guarantee of his stake back. Again it is stressed that in all of the above cases a minimum term of 6 years would apply to the earliest possible redemption. In this way the long-term event and the short-term event characterisation of the present invention is maintained.

It is also possible to create a purely Islamic bond which uses the new so- called Islamic bond constructions that are being advanced by Islamic banks as the underlying investment vehicle for the transaction. Whilst these Islamic bonds may appear rather complicated in concept and construction to the issuer, their advantage is that they appear very simple and straightforward to the purchaser.

This Islamic bond product would replace the zero coupon/financial instrument element of the above-described prize incentive bond with a pure Islamic finance method element. The share of what would have been the prize incentive bond's ticket sale proceeds (that would have been placed into a zero coupon bond issued by a local bank) can now be placed into a profit-based Islamic equity or other form of investment managed on behalf of the ticket purchaser by an Islamic bank or by the Islamic banking arm of a local bank. Some of these Islamic investment concepts as applied to the prize draw incentive contract are worth explaining in more detail here as although the construction is complicated in theory, in reality all that is happening is that the portion of the money that would have been placed in the zero coupon bond is being placed in another financial instrument, i.e. the Islamic bond. The only material change the customer will see will be the phraseology and the form of a short sentences on the ticket as explained below.

The winning of prizes is HaIaI (permissible therefore blessed, but only if they do not involve real as opposed to theoretical or opportunity loss i.e. loss through the expenditure of money with the primary purpose of wining the prizes without the existence of real trading of goods or skills). In the case of the zero coupon scheme, Sharia'h law prohibitions are avoided by ensuring that the return of the money at some point in the future which means that no real loss through expenditure of money Is actually taking place - just a theoretic opportunity cost through a no interest loan with charitable purpose which is allowable under Islam. Since the prize was not the benefit of the loan itself, it could be termed Qard Hassan (mentioned earlier).

However with an Islamic financial product that carries a prize as an incentive to buy, a profit may be forecasted, but this is a profit which cannot be specified or promised otherwise it becomes forbidden as it is regarded as interest. Furthermore, a profit cannot be guaranteed, it must be combined with a real prospect of loss, otherwise it again becomes interest earning and this is forbidden as usury. Thus whilst putting 10% for example of the purchase price of a ticket into an Islamic style zero coupon bond is possible, -i.e. the bank acts as a trustee for the money to invest it in projects which pay back in the form of rent over a given period in order to effectively ensure the return the principal and whilst the rent can be outlined implicitly at the start thus enabling the bank to specify the date of return of the principal purchase price (the zero coupon element that defeats anti-gaming laws), the profit element i.e. the rental returns over and above the return of principal can be designated as profit and remain unspecified. The key here is that the bank can enter into an Islamic contract with the ticket purchaser to use his money to build real projects which are technically owned by the ticket purchaser and which the banks then leases from the purchaser (the rental contract that enables the bank, as an ordinary rental contractual counterparty, to guarantee a zero coupon rent - i.e. a rent that piles up and is repaid at one go in order to issue a guarantee of the return of the original purchase money at some point in the future. The Islamic bank will also declare itself a partner with the purchaser in the sub lease of those properties leased by the bank to the real user of the properties for a rental over and above the rent the bank pays to return the capital - the profit element. The difference between the total rental the bank pays and the total rental paid by the sub lessee will be the difference between the banks cost of funds and the mortgage rate available to individuals in the market as this will work out as a mortgage as the sub lessee will acquire the property in the end of the loan. This way of contracting can be extended to numerous types of transactions and have included for example even the financing of multi-million forestry operations in Malaysia.

In reality neither the purchaser, nor the operator will see these legal constructions. The operator will receive his money, then under the abstraction method turn over an agreed percentage for example up to 25% of the purchase price on his behalf to the Islamic Bank, to be completely invested by them on his behalf. The Islamic Bank's name will be on the prize incentive bond ticket as the issuer who promises to pay the bearer his money back with profits ("for exact date of repayment see bank"). Nevertheless, the repayment would still be classified as a long-term event.

Arguably what really happens with all Islamic finance is that ordinary loan contracts are rewritten in a way that reflects the above theoretic money ownership flow which is permissible under Islamic law but, in fact, attempt to match as closely as possible ordinary banking transactions in control, real responsibility and interest rate.

In this scheme, the overall proforma contract between the bank and the theoretic player will be validated by the Sharia'h committee of the bank and the prize incentive bond ticket will for example read on the back "Your money is returnable in full with profits for exact date see notice displayed in The bank of ... validated by the Sharia'h committee of the bank of ... and approved by Sheikh X"

Having devised a new type of investment property, the prize incentive bond, the manner in which the bond is generated, distributed and used has been addressed by the inventor. There are technical issues which need to be addressed which result from the incompatibility of user participation in linked long and short-term events.

Any system handling long-term bonds or an entries into long-term events, has certain requirements which need to be fulfilled.

Typically, entries into medium to long-term events, to which a user has access, require the user to have a long-term ticket, which has certain characteristics specific to the nature of use of the ticket.

The long-term ticket needs to be obtained from a secure point-of-sale such that the issuer can have confidence that the entries into the long-term event will be sold under secure conditions. If this were not the case then there would be an unacceptable increase in fraud opportunities, for example, the seller could say he has lost certain long-term event tickets and thereafter use them for himself. Typically, the secure-point-of-sale is at a bank, a post-office or via secure financial institution.

The long-term event ticket is usually issued upon registration of the user into a central register of the issuer relating to the long-term event. The registration is by the secure retailer acting as an agent and involves an identification process at the point-of-sale. Here the long-term event ticket is assigned to the name of a person (normally that has been validated either using a common identity item validation process i.e. passport, or a previous account opening process and specific identity validation i.e. bank account number/address details/ credit card number) and recorded in a general register of the issuer. Often the register will be linked to a file containing a signature requiring a fallible human signature validation process. This process is time-consuming and requires the secure retailer to have the ability to authenticate identification documents, such as passports etc. Similarly, on completion of the long-term event, the owner of the long-term event ticket will typically be required to prove their identify to obtain any benefits which have accrued to them by completion of the long-term event.

The long-term event ticket usually requires security features to be built into it to prevent fraud. Security features in the actual ticket itself are typically required to enable a validation at various points in the life cycle of the ticket to whether the long-term event ticket is real or a forgery. Some long-term event tickets can be akin to a bearer type bond, namely the owner of the ticket can claim its value in the future, without the need for any identification. In this case, the paper ticket has a value itself, similar to a banknote, and so needs security features to prevent fraudulent copying. In these cases very stringent fraud prevention measures are employed, such as those on a banknote (watermarking, foil strip in paper, etc). Also the paper on which the ticket is printed needs to be robust enough to survive until the future event occurs. These security measures are expensive and long-lasting according to the degree and value and expected life of the ticket.

However, these features are at odds with typical requirements and characteristics of a short-term event ticket which are described below.

Typically, short-term event tickets are mass produced and need to be relatively cheap. The ticket substrate only needs to last short period of time for claiming prize relating to short-term event for example. Whilst the ticket itself needs to have some form of security, the degree of security is far less than that of a long-term event ticket. Ticket distribution and generation needs to be of a low cost to enable low-value tickets to be sold. In this regard, the tickets are often machine-generated. Also to enable widespread distribution, the short-term event tickets need to be sold via non-secure retail outlets. The ticket issuance needs to be fast in order to function in a general-purpose retailer environment. Also the ticket needs, if possible, to be able to have an anonymous ticket purchase capability. Typically the ticket itself, in these short- term events, acts as the only user record of the transaction and gives its owner its short term value if any.

These factors have lead to an industry-wide acceptance that tickets for short- term and long-term events are mutually exclusive as they have such differing technical requirements. This presents a technical prejudice which the inventor has overcome.

The present invention addresses this prejudice, an thereby provides a technical solution which can be used to implement the new type of prize incentive bond. It does this by providing a multifunction ticket and system for operating with the multifunction ticket which together operate in facilitating both the long-term event and the short-term event but crucially separate the authorisation of the entry into the short-term event from the registration of the entry into the long-term event.

The term 'registration' is intended to mean the process of user registration with a system or database which involves the user inputting their personal details and the creation of a personal record of the personal details. Whilst typically this is the first time a user uses a new system, it is not intended to cover situations where the system creates a record pertaining to that user's interaction with the system which does not involve the user entering all of their personal details.

The separation of the user registration for the long-term event from the short- term event authorisation enables the prejudice that the two different functions are incompatible to be overcome. The simple authorisation of the short-term event entry can be carried out quickly and, if required, anonymously at a non- secure retail outlet, such as a supermarket or convenience store. The retailer is not entrusted with any bonds of any value and the process can be automated though use of remote terminals for connection to the system. In particular, the incompatibility is addressed by having a multifunction ticket which fulfils all of the short-term requirements by being low cost, not requiring a lengthy operation to activate the ticket, not requiring a proof of identity to take part in the short-term event and being constructed to have a relatively short operational life. The long-term requirements are addressed by the unique ticket number, which is assigned to the multifunction ticket in the short- term event, providing the link between the short-term event and the long-term event. In one embodiment the unique ticket number is made available by the system involved in the short-term event and preferably within the short-term life of the multifunction ticket, for example six months, it can be used to register its holder, with proof of identity, into the long-term event. It can alternatively be pre-registered before participation in the short-term event, without effecting the short-term event participation requirements. Once registered, the multifunction ticket can be replaced by a unique reference number provided on a carrier, for example on a more durable certificate, a proprietary swipe card 100 or a mobile phone (later embodiment). This unique reference number is related to the unique ticket number in a verifiable way that requires machine-stored information that is not present on the carrier.

In one embodiment, the multifunction ticket can be printed on simple degradable thermal paper (for low cost) without any paper security features. The only security feature would be the system-generated authentication number (ticket ID number) printed on the ticket itself. In this embodiment the ticket only acts as a facilitator for later registration of the ticket with the long- term event. In another embodiment, where the purchaser uses a pre- registered ticket on a proprietary swipe card, only the security required to use the pre-registered ticket needs to be employed, for example a PIN, which is far less onerous than security in the authenticity of the ticket substrate itself, for example. In either embodiment, the security is shifted away from the retailer to the authentication means of the system and the need for a point-of- sale registration process is obviated. Also, advantageously, the present invention facilitates impulse purchasing and also the purchase of multifunction tickets with cash. The multifunction ticket if the present embodiments can be obtained at non- secure retail outlets, without requiring any purchaser registration at the point of sale and using an automated terminal. This keeps the cost of the ticket relatively low and keeps the purchase procedure relatively quick for the purchaser.

The post registration embodiment has many benefits associated with it. For example anonymity of the user in purchasing the ticket, the ability for the user to use cash in purchasing of multifunction tickets, and purchasing from a wide distribution network. The purchaser can also purchase on his own behalf or in another's behalf or even accommodate a change of mind where the purchaser later assigns the multifunction ticket to another person. This may possible by after the short-term event has occurred, e.g. I buy for me to win this week's prize but leave the bond redemption to my relatives. Prior to the present invention buying a premium bond for example for another, (i.e. a child or someone else) meant applying by post or at a secure location able to handle the transaction using a secure registration process.

Therefore whilst a conventional premium bond is normally a registered bond, using the system of the present invention, it is possible to render the multifunction ticket capable of being bearer bond (whilst remaining fully secure for purchaser and issuer) for part of its lifecycle which can then become registered and even change ownership legally and securely prior to or after registration.

The conventional purchase of a premium bond, for example by phone and or the internet, requires personal confidential information to be given. In the system of present invention secure bearer-only registration is achieved on a widely distributed terminal network, or phone or internet purchase without the transmission of private information which the purchaser may be unwilling to provide. In other words the system of the present invention need only be tied to an algorithm of the authenticating means and hence a number known only to the purchaser, not his personal information. Furthermore, the conventional premium bond purchaser doesn't have immediate security of purchase on a phone or internet purchase, i.e. the details will be subject to a time-delayed purchaser-provided details validation process. This means that the prior art online site/telephone centre will have to take time to compare all details such as address, birth date, credit card number against available records (this is often done after the sale). If the purchaser's credit card number and address provided to the prior art online premium bond site doesn't match his credit card address previously provided to his credit card supplier, the sale will be voided, even though the error could be innocent or as harmless as a wrong spacing in the post code held on record by the credit card supplier with the post code provided to the website.

Another advantageous feature of the present invention relates to its responsiveness. The system of the present invention handles management of the long-term event in real-time. This means that the system knows all of the multifunction tickets, which have been purchased, the ones that have won the prize, those that have been redeemed, those that have expired and the revenue generated from those ticket sales. This real-time information can be very useful in managing the system and is particularly helpful when the prize is of a variable amount needing to be of a magnitude proportional to the volume of sales of multifunction tickets, for example.

An important technical element of the present invention resides in the fact that the promotional domain of prize draws and the domain of financial instruments are traversed by purchase of a user ticket which is referenced by a unique identifier which is common to both domains. This unique identifier accommodates the different requirements of both domains whilst at the same time maintaining the integrity of both domains. The present system records the unique identifier or information derivable from it in two different data stores (first and second) and the advantages of the present invention are achieved by separating the different uses of this information in this way whilst at the same time retaining a link between both uses.

Advantageously, the receiving means is arranged to receive a unique card registration identifier with the authorisation request and the authorisation means is arranged to access a pre-registered user database to determine whether the card registration number is valid for authorisation. The use of pre- registration of the user, means that the ticket can be a proprietary multifunction card which allows the user to only interact with the system once to be included in both the long-term and the short-term events.

The identification obtaining means is preferably a database of pre-registered users and the system may further comprise means for querying the database to obtain details of the pre-registered user.

Alternatively, the identification obtaining means is a database of pre- registered users and the system may further comprise means for querying the database to obtain a unique pre-registered reference identifier to the pre- registered user. In this way, secure databases can be accessed to obtain a unique user reference without giving away the users identity. This is a very secure way of entering into both a short-term and the long-term events without holding the identification details of the user on a non-secure database for many years (long-term event).

In this case, the second storing means can be arranged to store the unique pre-registered reference identifier as the identifier uniquely associated with the ticket identifier.

Preferably the request includes at least one user-selected option and the first storing means stores the at least one user-selected option in the database record relating to the first function of the ticket. This makes the user interaction with the prize more stimulating and makes the new instrument more attractive. The system preferably further comprises processing means for using an algorithm to convert the unique pre-registered reference identifier into the identifier uniquely associated with the ticket identifier. This enables two different unique numbers to be used for two different events with both numbers being linked by the system.

The request may be received from a remote ticketing terminal and the system may further comprise transmission means for transmitting a unique identification number back to the remote ticketing terminal, the unique identification number being linked to the timestamp and the at least one user- selected option. This allows for a distributed system to be advantageously used such that multiple remote terminals can be providing the services to users whilst a single central server for example can be providing the backbone of the system itself. This is the most efficient way of configuring such a system.

This arrangement addresses the need when the system needs to be able to accommodate both anonymous and registered users for the short-term multiuser event and the strict requirements of identity in the long-term event where tickets could be lost and a bearer bond type system is not acceptable, namely the holder of the ticket is the owner of the entry into the long-term event. This issue is solved by operation of one embodiment of the present invention in two distinct stages a short-term event stage and then a registration stage for the long-term event with no requirement in the short-term stage of the identity of the user to be provided to the system.

The system may further comprise a remote ticketing terminal for issuing the multifunction ticket and the remote ticketing terminal may comprise local authentication means arranged to carry out a local authentication procedure of the card owner. In this way a secure check of ownership can be carried out, for example such a CHIP and PIN check.

The remote ticketing terminal may be arranged to have access to the first storing means and is arranged on presentation of the unique ticket identifier, to determine whether the short-term event has occurred and whether the at least one-user-selected option associated with the unique ticket identifier, matches a stored short-term event result information item. This way of processing the results of the short-term event means that users can return to the terminal where their ticket was issued to claim a short-term prize for example.

The receiving means can be arranged to receive the unique identification number; and the system may further comprise: comparing means for comparing the received unique identification number with the unique ticket number stored in the first storing means; and long-term event handling means for generating a unique long-term event identification number uniquely related to the unique ticket number and for sending the same to the second storing means if the unique identification number and the unique ticket number match. This is an alternative to storing the ticket identifier in the second data store, which provided a greater degree of security as the operator of the second store does not have knowledge of the identifier used in the short-term event.

The comparing means is preferably arranged to compare the date of receipt of the unique identifier with the timestamp associated with the unique identifier and to enable generation of the unique long-term event identification number if the time between the current date and the timestamp is less than a predetermined value. In this way the separate registration of the user with the long-term event can be controlled to be within a specified time-scale. This enables the handling of the registration process to be determinate over a given timescale.

The system may further comprise a remote issuing terminal for issuing a user- identifying entry in the long-term event, the issuing terminal comprising: means for forwarding the unique identifier number to the receiving means; entering means for entering in user identification information; obtaining means for obtaining the identifier uniquely associated with the ticket identifier; and producing means for producing a user-identifiable certificate for an entry in the long-term event.

The remote issuing terminal may be arranged to have access to the second storing means and may be arranged on presentation of the identifier uniquely associated with the ticket identifier, and user identification information to determine whether the long-term even has occurred.

The remote ticketing terminal may comprise a surrendering module arranged to enable surrender of a multifunction ticket for which the short-term event has passed and the long-term event has still to occur, the surrender module may be arranged to enable the issue of a new multifunction ticket at a discount and to send instructions to the second storing means for the cancelling of the entry in the long-term event corresponding to the surrendered ticket.

The present invention also extends to a multifunction ticket or like information store for use with a system as described above.

According to another aspect of the present invention there is provided a multifunction ticket or like information store, representing an entry item in both a short-term multiple-entry event and a long-term event, the ticket comprising: a machine-readable unique ticket identifier, the identifier providing means for identifying pre-registered information about the owner of the ticket; and a time stamp or information relating thereto concerning the date of a ticket authorising procedure; wherein a specific one of the multiple possible functions of the ticket can be determined and authenticated by use of the machine-readable unique ticket identifier and the timestamp.

The multifunction ticket may further comprise a plurality of prepaid elements, each element representing an entry into the multiple entry short-term event and into the long-term event, the ticket being arranged to mark each prepaid element once it has been used to participate in the multiple-entry short-term event. The ticket identifier, timestamp and user-selected options may be stored electronically in the ticket. This can for example be within a chip of an electronic multifunction card. Alternatively, the ticket may preferably comprise electronic data within a mobile telecommunications device.

The ticket identifier, time stamp and user-selected options may alternatively be stored graphically on the ticket, such as for example in a two-dimensional bar code .

Preferably the multifunction ticket may further comprise an image of a collectable character or an element of a game apparatus. This makes the ticket more attractive to collect and play with as well as use the ticket in the short-term and long-term events mentioned previously.

According to a further aspect of the present invention, there is provided a method of processing a multifunctional ticket, the ticket representing an entry item in both a short-term multiple-entry event and a long-term event, the method comprising: receiving a request for a user entry into the short-term multiple-entry event; implementing an authorisation event authorising the request, the implementing step including generating a unique ticket identifier associated with the user entry; storing the unique ticket identifier and a timestamp relating to the request authorisation event in a database record relating to a first function of the ticket; obtaining owner identifier information relating to an owner of the multifunction ticket independently of the authorisation event; and storing the owner identifier information, the unique ticket identifier or an identifier uniquely associated with the ticket identifier and the timestamp or a date associated with the timestamp, in a database record relating to a second function of the ticket, the method further comprising executing the first and second functions on different timescales with the first function relating to the short-term event and the second function relating to the long-term event. Embodiments of the present invention are now described with reference to the accompanying drawings.

Brief Description of the Drawings

Figure 1 is a schematic diagram showing a first and a second different option for implementing a new type of transaction instrument;

Figure 2 is a schematic diagram showing a system for handling a multifunction transaction of the first option of Figure 1 according to an embodiment of the present invention;

Figure 3 is a schematic diagram showing part of a proprietary system for handling a multifunction transaction of the second option of Figure 1 according to an embodiment of the present invention;

Figure 4 is a schematic diagram showing part of a non-proprietary system for handling a multifunction transaction of the second option of Figure 1 according to an embodiment of the present invention; and

Figure 5 is a schematic diagram showing the system and flows of information about the system of Figure 2 illustrating the mechanics of how the system works.

Detailed Description of Embodiments of the Present Invention

The present invention can be implemented in many different ways. Each of these involve a user interacting with a ticket-issuing terminal and the terminal in turn with a central server. The central server has access to information databases for the short-term (e.g. prize draw) function and a dedicated area of the central server and/or a dedicated server and/or an issuing bank server and database for the long-term investment (e.g. bond) function. This latter access can be either as specially dedicated adjunct to the prize draw database or through a communication portal to an existing an issuing bank server and database for the long-term investment (e.g. bond) function. This is described in greater detail below with reference to Figures 1 to 5.

Referring to Figure 1 an overview of the possible options (available embodiments) for implementing the present invention are shown. The first option (Option 1) 10 is a two-stage process in which the user purchases a dual-function ticket and in which the functionality is enabled in two-discrete stages. The first stage 12 involves purchase of the ticket and registration with the short-term event (prize draw) and the second stage 14 involves the user registering the received ticket with a banking institution or a dedicated registration facility. This is described in greater detail with reference to Figures

2 and 5.

Another option (Option 2) 16 shown in detail in Figures 3 and 4, is a single stage process in which the user purchases at 18 a registered ticket which only requires the server to notify the bank of the purchase of that ticket. This option

(Option 2) 16 has two variations (Options 2a and 2b). Option 2a 20 comprises registration and purchase of the ticket using a proprietary preloaded swipe/buyer card (or the like) and this is described in greater detail in Figure 3. Option 2b 22 is registered without a proprietary swipe card, such as an identity card, driving licence, credit card etc and is described in greater detail in Figure 4.

Which embodiment or option is used depends on how the system is to be set up. Key factors 24 in deciding this depend on the buyer's (ticket purchaser's) requirements, the issuer's requirements and the agent's (ticket issuing terminal operator's) requirements.

Referring now to Figure 2, and example of how Option 1 10 is carried out at a high level is provided. This two-stage process commences with the first stage 12 of a user 30 purchasing at Step 32 a new prize incentive bond ticket 33 for say £1.00 at a user terminal (hereinafter referred to as a 'ticketing terminal') 32. The purchase 12 may include the user selecting a set of draw numbers, for example, or specifying that the draw numbers are to be generated randomly by the terminal 34 and assigned to the ticket 33 being issued. The ticketing terminal 34 generates a unique ticket number 36 which is assigned to the ticket 33. The details of the ticket 33 including the unique ticket number 36 and the selected draw numbers (not shown) are encrypted at the ticketing terminal 34 and sent at Step 35 in an encrypted validation request 37 to a central server 38 which includes a secure offshore central database (CDB) 40. The central server 38 decrypts the received message 37, validates the ticket details and stores the details including the unique ticket number 36 and the associated draw numbers in the secure database 40. If the validation process determines the ticket request 37 to be valid, the validation is encrypted and communicated back at Step 42 to the ticketing terminal 34 in an encrypted validation response 44. There are numerous known ways of validating an issued ticket number 36 which will be well known to the skilled addressee such that this aspect of the embodiment is not described further.

On receipt of the validation response 44, it is decrypted and a ticket 33 is printed out at Step 46 for the user including the selected draw numbers and the unique ticket number 36. It is also possible for the ticket to be printed out at Step 46 with this information stored on the ticket in a machine-readable manner, such as in the form of a barcode or electronic data on a magnetic stripe of a card. This process 12 is labelled 'process A¹ and typically takes place very quickly, for example typically in four seconds.

Armed with the validated ticket 33, the user 30 then has a relatively short period of time, for example six months, to carry out the second stage 14 , namely the registration process (labelled process B). Here, the user 30 presents at Step 50 his ticket 33 having the unique ticket identifier 36 printed on it to a bank 52 for registration. The ticket details 36 (including at least the unique ticket identifier 36) are entered into or read at Step 54 by a bank terminal 56 and the terminal 56 communicates at Step 58 the ticket details to the central server 38 incorporating the secure central database 40. A check is carried out on the server 38 and central database 40 to determine if it is a valid ticket ID 36. Assuming the ticket ID to be valid, the server issues a unique bond ID 62, which is transmitted back at Step 60 to the bank terminal 56. The terminal 56 produces at Step 64 a registration confirmation to the user and this can be in the form of a new certificate 66, for example which includes the unique bond ID 62 or other number from which the unique bond ID 62 can be determined on redemption.

The central server 38 also informs an issuing bank database 68 of the unique bond ID 62 associated with this customer's ticket 33 and the maturity date of the bond, so that these details can be stored for the long-term function, which in this embodiment is a long-term zero-coupon bond having a predetermined 20-year (from purchase) maturity date. The bank 52 may also input information to identify the user 30 by adding in his/her contact details for bond maturity (long-term event) and redemption in the future, in 20 years, in this example. This personal identity information (not shown) would also be stored in the issuing bank database 68.

For each prize draw that has generated bond entries, there will be a percentage of tickets that fail to be registered in Stage 2 14. The implications of this are discussed later.

In a much shorter time frame, typically a week or a month after purchase 12 of the prize incentive bond, the short-term prize event occurs. Here the user 30 can check to see if their entry into the prize draw, in this embodiment the form of selected numbers, has won the prize. In the event of the prize being won, the ticket 33 can be taken back to the ticketing terminal 34 and both the selected numbers and the unique ticket identifier 34 can be sent again to the central server 38 for verification as a genuine winning ticket 33 against the data stored in the central secure database 40. A verification code (not shown) can be generated and sent to the terminal 34 to authorise payment of the prize or to provide the means by which the user 30 can receive payment. Such validation of short-term event winning tickets is a well known procedure and need not be explained in further detail herein.

For prize incentive bond tickets which do not win the prize, the ticket 33 still has value as a long-term bond as described above. The user 30 also has the ability to repurchase tickets 33 at a discount. In this process (labelled process C) 70, a long-term ticket 33 which has had its short- term function (prize draw event) fulfilled, can effectively be redeemed early (in advance of maturity of the long-term event) for credit against a new prize incentive bond ticket 33. The user 30 presents at Step 72 their ticket 33 for repurchase at the ticketing terminal 34 and for a £1.00 ticket 33 which has a nominal 10% long-term bond value, they may obtain, for example, a £0.05 discount against a new ticket 33 which would, in effect, then cost £0.95. This repurchase is communicated at Step 74 to the issuing bank 52 so that the database record in the issuing bank database 68 for that ticket 33 can be cancelled at Step 76 and the process continues at Step 78 as has been described in Process A with a new entry being made in the central database 40 for the prize draw event and a new ticket 33 being issued with its associated new long-term bond maturity date being say 20 years from the date of issuance of the new ticket 33. Again, this new ticket 33 would have to be registered at Step 14 as has been described above in relation to process B 14.

This repurchase process can optionally be replaced at the user's discretion (and/or the sellers predetermined choice as a general rule as an option in certain territories) with a straight cash sale process which transfers ownership back to the seller or to a third party and thus has a re-registration process whereby the original purchaser 30 receives the adjusted cash value and the third party is registered as the new owner for the purpose of redeeming the principal but not for receiving the prize as the short-term event has already occurred. This option exemplifies the nature of the multifunction ticket 33 in that it still has a value after its short-term event function has been exhausted.

However, the requirement to re-register at Step 14 for the long-term event is always necessary with a change of ownership.

The reclaim process (process D) 80, involves the user 30 waiting the long time period (e.g. 20 years) before presenting their registration certificate 66 to the issuing bank 52. At this maturity date, the bank 52 then uses the unique bond ID number 62 on the registration certificate 66 to check at Step 82 its corresponding bond account record 84 (schematically shown on Figure 2) in its database 68 and on confirmation of the validity of the registration certificate 66 and maturity of the bond, the issuing bank 54 pays the purchaser their original amount of their ticket purchase price (in the example, above this would be £1.00). Alternatively, the issuing bank 52 can decide (or pre-elect in principle) to payback the original amount together with any accrued earnings/profits if any. Additionally, the bank 52 may require the user 30 to provide some form of proof of identity, such as a passport and/or other form of secure identity document or secure identifier, to match with the possibly stored personal identity information.

The bond account 84 is partitioned into weekly draws accounts 86. For each weekly prize draw account 86, which has listed bond entries, there will be a percentage of bonds 88 which are registered correctly an awaiting maturity. There will also be a percentage of bond entries 90 which are unregistered, maturing bonds which fail to be reclaimed. These bonds are, after a certain length of time, cancelled and the funds accrued transferred at Step 91 to the issuing bank's own account 92. There will also be a percentage of unregistered bond entries 90 to which this transfer at Step 91 also applies. However, in the case of unregistered bonds, the transfer occurs after the end of the registration period of six months for example rather than on maturity.

Thus the bond account 84 is partitioned into a plurality of weekly draw accounts 86 each with sub-accounts for registered bonds 88, and unregistered bonds and unclaimed bonds 90.

Option 2a 20 is set out in detail in Figure 3. Here the user 30 has a pre-loaded proprietary card 100, which for example, has a preloaded number of prize incentive bond tickets 33, in this example 100 tickets. Also the card 100 has a proprietary swipe card ID number 102. The card 100 can either be a pay-as- you-go card or a prepaid card. The user 30, in purchasing tickets, decides how many of the tickets 33 he wishes to activate and the prize draw numbers relating to those tickets 33 and enters these into the terminal 34 after swiping at Step 104 his card 100 at a ticketing terminal 34. Again the prize draw numbers can be generated randomly by the terminal 34 as in the Option 1 embodiment described above. Alternatively, the card 100 is a smart card with a PIN and is held within the terminal 34 whilst it is being read. For a PIN- enabled card, the user 30 has to enter his or her PIN in order to use the card and this prevents unauthorised use of a person's card 100. In this case, receipt data 105 (representing proof of purchase) can be written at Step 106 to the card 100 as is described below.

The terminal 34 provides some form of proof of purchase to the user 30 which is to be used for the redemption/reclaim process 80 on bond maturity. For example, the terminal 34 can produce a receipt ticket (not shown) for the user

30, or store an electronic file (receipt) on the user's card. The ticketing terminal 34 can also update the number of available tickets 33 stored on the swipe card 100, namely if ten tickets 33 are purchased, then the amount of tickets 33 remaining on the card 100 is debited by 10 tickets.

The terminal 34 performs a local authentication of the card 100 such as PIN processing and/or checking a card ID number 102 composition and provides at Step 102 the proof of purchase data 105 back to the user 30. The local authentication may include checking whether the number of pre-stored tickets 33 on the card 100 is greater than or equal to the number of tickets 33 which the user 30 wishes to activate in the current purchase. This local authentication is not described in detail here as such techniques are well understood by the skilled addressee. Also the read data from the card 100 including its proprietary swipe card ID number 102, the prize draw numbers entered by the user 30 or selected randomly by the terminal 34 (user option) and an indication of which tickets 33 are being used, is all uploaded at Step 108 to the central server 38 and stored in the central database CDB 40. Here, a unique ID number A 110 (representing the unique bond ID number 62) is associated at Step 112 with the proprietary swipe card unique ID number 102. However, no other corroborating information is required in this embodiment. As such it is not necessary for the user to provide address details or bank account/credit cards details, thereby making the system very secure against eavesdropping fraud based on listening in on the data transmission to the central server 38. the ID number is very important to the system to identify the user by it is of very limited use to a fraudster.

The unique ID number A 110 is sent at Step 114 to the issuing bank database 68 for storage as the reference for the long-term event (redemption of the associated bond in, say, 20 years time). The unique swipe card ID number 102 together with the associated user details are also sent at Step 114 to the issuing bank database 68 in this embodiment.

The user 30 in this embodiment is pre-registered and as such his or her details are stored at the central server 38 in a registered user database 40. These details are linked to the unique swipe card ID number 102 of the user 30 and may also include the number of tickets 33 allotted to that card 100 at present.

In this embodiment, there is no need to carry out a separate stage of registration 50 of the user 30 with the bank 52 as in the first embodiment because the card 100 is a pre-registered card 100, for which the CDB 40 has associated user details (not shown) already stored in the registered user database 40 at the CDB 40. These user details are associated with the swipe card 100 and so can be passed directly to a secure existing bank database 68 of registered bondholders as part of an automatic registration procedure process. The bond-issuing bank 52 has access to the registered bondholders database (made up of bond accounts 84) and uses this for verification when a bond-maturity claim is made in a manner which has already been described in process D 80.

In this embodiment, there are two possible alternatives for reclaim of the ticket amount from the bank 52 (on bond maturity). The first provides for the abovementioned proof of purchase 105 being the card 100 itself (or a receipt file on the card 100) and this has to be presented to a teller at the bond- issuing bank 52 to authorise bond redemption. (This would be similar to a bearer (pay-as-you-go) Oyster ™ Card). The bank terminal 56 could simply use the unique swipe card ID number 102 to look up the user details stored in its bank database 68. Once the user authenticated their identity to the bank 52 , the receipt data 105 could be authenticated as well as the maturity date of the bond, and the issuing bank 52 could then pay the purchaser 30 their original amount of their ticket purchase price (in the example, above this would be £1.00).

The second possible way of reclaiming the ticket amount is one in which the unique ID number 102 of the swipe card 100 acts as a reference to a central database 40 where the details of a bank account at the issuing bank 52 can be accessed (this would be similar to a registered Oyster ™ Card). The difference between the first bond reclaim procedure described above and the second reclaim procedure is that no receipt data 105 is required for the authentication process. Rather, the bank's check on the authentication of the user's identity, by driving licence or passport for example, would be sufficient. They may also require a local PIN number check to be passed as was the case for use of the pre-registered card. In this case, only matured bonds in that user's name are redeemed. Here the security is in the previous marriage of the unique number 102 of the swipe card 100 with the account 84 at the bank 52 using the unique ID number A 110, to which the bonds are allotted, e.g. Mr Smith's unique number 5 card has purchased 10 bonds on different dates.

Option 2b, as set out in Figure 4, is very similar to that shown in Figure 3 except for the fact that the CDB 40 does not store the user's details in a local registered user database 40, namely a registration carried out previously using a non-proprietary swipe card 120 can be used. In this case, the swipe card 120 or other machine-readable user-identifying information (driving licence details for example) are used to identify the user 30 to the system and this identification information can be used to access the previous registration of the user with another system. This identifying information 121 is passed at Step 1 122 from the ticketing terminal 34 to the central server 38 and the CDB 40, where the user-identifying information, such as name data 121 , is verified by interrogation at Step 2 124 of a government ID database 126, for example. Typically, there is a secure firewall 128 here which needs to be traversed, which may mean that no information other than a simple yes or no or a serial number 130 is received as a response to a user ID validation query 124. Assuming a serial number 130 is received in response to the user ID validation query 124, this is then applied to an algorithm 132 at the central server 38 to generate a unique registration (Reg) number 134. This unique Reg number 134 is then passed at Step 3 136 to the issuing bank database 68 as the verifiable user identifier.

An important point to consider here is that the user experience when using the non-proprietary swipe card or other machine readable user identifying information is similar to that of a proprietary swipe card. In other words, the user 30 simply has to swipe their card and the system determines how to access their previously registered information (be it proprietary and stored locally as in the previous embodiment or non-proprietary and stored remotely as in the present embodiment). Either way the procedure is relatively quick such that the user does not experience the lengthy time period with a significant amount of data entry associated with a user-registration procedure.

The reclaim procedure 80 at the bank 52 then is carried out as has been described previously, with the exception that rather than having user ID information in the bank issuing database 68 to authenticate a reclaiming user

30, only the unique registration number 134 is provided. This registration number 134 is used as a reference to the bond information associated with the user 30. Then user identity information, received at a reclaim event, is passed to the government ID database 126 to generate a corresponding serial number 130. This is then sent to the server 38 where the algorithm 132 converts it into a registration number 134 that is sent back to the bank database 68 and is compared to the previously stored Reg number 134. A match of Reg numbers 134 authenticates the user 30 for access to any matured bonds under this Reg number 134.

There are some variations possible in relation to the database 126 used in the process of creating the unique Reg number 134 described in Figure 4. Option a) involves using a secure database 126 which is associated with an existing ID card database. This is the option shown in Figure 4 but it may be varied by being able to obtain ID information from the database 126 rather than just a serial number 130.

Option b) is to use any ID database and to obtain name data from the database which is then passed on to the issuing bank database 68 as the Unique Reg number 134. Ultimately the bond needs to be issued to a person and so some way of linking to a person is required.

Option c) involves the swipe card data just validating that the person using it is authorised, and real. The bank database 68 is then provided with swipe card information to allocate to a registration database entry 84. On redemption of the bond 80, the information in the registration database 68 is presented back to the government database 126 for validation only.

A last option, which is also possible, modifies these systems to provide registration and terminal validation on separate systems for extra security against fraud.

Referring now to Figure 5, the mechanics of how Option 1 works are set out in a diagram, which shows the system and the flows of information. Following the steps shown, the user 30 wishes to purchase a new prize incentive bond ticket 33. The user at Step 1 140 selects the draw numbers at the terminal 34 and pays for the ticket 33. The numbers may be selected in any way. For example, they could be marked on a machine-readable number choice slip, similar to that used in the National Lottery in the UK. The slip could then be scanned by the terminal 34, to determine the numbers. Alternatively, the draw numbers could also be entered manually into the terminal 34. Furthermore, the numbers could be randomly selected by the terminal 34 itself or even by the central server 38 and database (CBD) 40 and merely notified to the user 30 on verification of their ticket purchase.

Once the details have been read into the terminal 34, an encrypted electronic message 37 is created. The message 37 comprises I) a terminal identifier, ii) the selected draw numbers if determined at or read into the terminal, iii) the time and date of the request and iv) the user's ID 102 if a swipe card 100, 120 is being used. This encrypted data is transmitted as part of Step 1 142 to the server 38 and database (the CBD) 40.

Here at Step 2 144, the received message 37 is decrypted, and a new data file is created for this ticket 33 and stored in the CDB database 40. The data file stores the decrypted information which includes i) the draw numbers, ii) the time and date of the request, and iii) a unique identifier A 36, 110, which is created at Step 3 146 using a stored algorithm 132.

The unique identifier A 36, 110 is then provided at Step 3 146 either as a barcode (or other machine-readable code) for output back to the ticketing terminal 34, the barcode also providing other information required by the terminal 34. Alternatively, the barcode can be generated from an algorithm 132 to represent the unique identifier A 36, 110 and the other required information, and the barcode itself can just be provided for return to the terminal 34. This information together with the draw numbers is returned to the terminal 34 at Step 4 148 and the ticket 33 is printed out at Step 5 150 with the draw numbers and the unique identifier A 36, 110 (in a machine- readable format) or stored on the swipe card 100,120 in electronic format.

The user 30 then has the option to commence the registration period 50 at a time of his own choosing but, in this embodiment, within six months of purchasing the ticket 33. The first part of this, in the recommended secure a two-part registration process, requires Steps 6 and 7 152, 154 to be carried out. The user 30 can have a user ID number (Swipe card ID number 102) provided to them on a card, which is a reference to a user record held on the CBD 40. This information is provided for example by swiping, together with the unique number A 36, 110 of the ticket. This information is communicated back up to the server 38 and CDB 40 and the unique number A 36,110 of the ticket 33 can be verified and thereafter associated with the user's ID number 102. In response to this, the server and CDB 38, 40 generate, using Algorithm 3 at Step 10 156, a unique number C 62, which represents the user's identity and well as identifying the unique ticket 33. The actual way in which this is generated is not important to describe as any algorithm 132 for generating the unique number from the relevant inputs could be used, and many of these will be known to the skilled addressee. The unique number C 62 is then transmitted back at Step 10 156 to the registration terminal 56 where it is printed on a new registered ticket 66 for the user 30, which represents the bond registration ticket 66, which is to be used for the second stage of the registration procedure at Step 10a 158.

The user 30 also has the option of registering at the issuing bank teller 56 directly with the ticket 33 they obtained from the ticketing terminal 34 at the end of Step 5 150 in a single-stage registration procedure 50. However, in this scenario, the user ID 102 would have to be given to the bank teller 56 who would also be responsible for completing the registration procedure for the bond. Whilst this can be achieved, in practice it provides a fraud opportunity for the teller 56 to manipulate the registration to a different person because a bank teller 56 could link in name details using existing bank technology.

Using the recommended two-part registration process described above, the teller 56 is unable to commit this fraud as the physical entry process 160 has to be linked to a pre-existing unique registration number C 62 which is lodged into the bank's system 68 and also printed on a special registration slip 66 by the ticketing terminal 34 which the customer 30 hand delivers to the bank teller 56 at the beginning of the second stage) of the registration process at Step 10a 158.

Jumping back to the first stage of the registration process, once the ticket 33 has been issued at Step 46, and the user ID 102 has been associated with the unique number A 36, 110 completing the first stage of the process from the user's perspective, the CBD 40 contacts at Step 8 162 the issuing bank database 68 (traversing the bank's firewall 164) at regular intervals to see if the retailers have deposited the money for the user's ticket 33 with the issuing bank 52. At some point, the retailers will deposit at Step 166 this money into their central bank account 168 and this will be transferred at Step 9 170 to the issuing bank 52 for the bond purchase. At this stage, the unique number A 36, 110 and the user's name can be provided to the issuing bank's database 68 for bond registration purposes. This data is associated together and stored awaiting the second stage of the registration process.

This registration ticket 66, containing the unique number C 62, has to be registered (in the second part of the registration procedure) within six months of the date of the original purchase. This process is carried out at the issuing bank 52.

On the second part of the registration at Step 10a 158, data is input at Step 160 into the bank database 68 and the numbers on the ticket (unique ID number C 62 and the machine-readable barcode on the original ticket 33 are sent back up to the CDB 40 and exposed to an Algorithm 1 132 and an Algorithm 2 132 for verification. The purpose of having two verification algorithms 132 is for enhanced security. Here Algorithm 1 may be kept entirely confidential and secure and access to it may be very limited. Algorithm 2, on the other hand, would be accessible by the bank 52 such that its inputs and outputs may be observable by the bank 52 but its interface to Algorithm 1 would not be externally visible. The actual algorithms 132 used for verification need not be described here as any verification algorithms 132 may be used and many will be apparent to the skilled addressee. As mentioned previously, unique Algorithm 3 at the central server 38 and CDB 40 generates the unique number C 62 and sends it back at Step 10 156 to the terminal 56. Thereafter, another new ticket 66 is printed with the unique number C 62, which confirms full registration of the ticket 33 and may provide instructions regarding redemption and repurchase.

At the bank database 68, the name of the person who owns the bond, the unique ID number A 36, 110 and the unique number C 62 are physically associated together in a database record. The record is related to a specific prize draw (draw event) and is deemed to have been registered. Each draw has its set of registration numbers associated with it and, on maturity; each draw will have registered claimed bonds and registered unclaimed bonds.

The repurchase procedure is shown at Step 11. Here the user buys a new ticket 33. The old ticket 33 is merely scanned transmitted up to the server 38 and CDB 40 and cancelled. Furthermore, the server 38 and CDB 40 notifies the bank database 68 of this cancellation and issuance of the new ticket 33. A transfer is simply notified in the bond account 84 from the draw 1 86 to draw 2 86a.

Another embodiment of the present invention relates to the implementation of the multifunction ticket within a mobile telecommunications device. Here the user selection of an option or variable, as in the previous embodiments, can be made on the mobile device and transmitted via one of the mobile device's telecommunications channels, for example by SMS or e-mail, to a remote processing server. The user-selected option and mobile telecommunications address (mobile telephone number, for example) of the user's mobile device are stored at the remote server. Also payment for the entry can be handled by the mobile device using known techniques, as described later.

The remote server, on receipt of a valid ticket request and on confirmation that the ticket has been paid for, stores the user-selected option and issues a unique ticket number (as in the previous embodiments) to the user. The unique ticket number is transmitted back to the mobile device and stored therein for future reference. This stored number can be recalled later when required for registration of the user in the long-term event (in a similar manner to that described in the previous embodiments). Furthermore, where the user is purchasing many such multi-function tickets, the mobile device stores a plurality of the unique ticket numbers and distinguishes those that have been registered for the long-term event and those which have yet to be registered. Also, the at least one user selected option for each ticket can be stored on the mobile device for determining whether the ticket has been chosen as a winner of the short-term event. In order to implement this service on a mobile device, the user can either simply download an appropriate software application to their mobile device and install it, or the user can register with the remote server for this service (for example by use of a mobile or fixed internet connection) and as a consequence be sent the software application for installation on the mobile device. It is not necessary to describe the software application in more detail as implementation of the application will be well understood by the skilled addressee simply from a high-level overview of the software application's described functionality.

A further feature of this embodiment, which is unique and highly advantageous, is that once the short-term event has occurred and, for example, a winning ticket of a prize draw has been selected, the remote server can look up the mobile telecommunications address associated with the ticket number (e.g. mobile telephone number) and send a notification back to the mobile device of the user concerning the outcome of the short-term event. This notification can be via SMS or e-mail for example and persists on the user's mobile device until the user reads and deletes it. Therefore, if the user has been selected for a prize from the prize draw for example, this can be communicated back to the user such that they can claim their prize. This feature greatly reduces the problem of unclaimed prizes, due to the winner not becoming aware of the outcome of the short-term event.

Payment of the ticket purchase price (£1.00 for example) can conveniently also be made via the mobile device. In some countries, mobile telecommunications networks are being established faster than point of sale systems and other transactional systems. In view of this, the present embodiment is particularly advantageous for use these countries.

A monetary value can be loaded (via ticket terminals in shops/kiosks as well as through payments on the Internet) to a user's mobile device (or to a mobile user's account) to generate/increase funds available for spending/saving. This is termed a mobile device wallet system. These funds can either be saved or used to fund transactions normally effected by cash or credit card as well as in order to access the user's bank account and/or accept cash payments. These also have the added benefit of being able to fund transactions on the Internet not easily open to people not having bank and/or credit card facilities. They represent a safer and more efficient way for cash dominated/orientated economies/clients to effect cash-style transactions when it is either inconvenient to carry large amounts of cash or mandatory to effect an electronic means of payment, e.g. internet purchases etc. 'Know your client' and anti money-laundering requirements can be satisfied by an account opening process which accompanies such systems.

This type of mobile device wallet system is known and is not described in detail herein. However, a departure from the known systems, which is part of the present embodiment, is the manner of use of such known mobile wallet systems, which is described below.

Payment or the acceptance of payments are effected via a payments menu on the user's mobile phone which is downloaded with the relevant electronic application when the user signs up for an account. Payment is made with participating outlets, which designate the shop owner's specific account identification number already held in the central system to allow the acceptance of payment from the customer's mobile phone account. The shop owner's ID code is entered into or read by the mobile device (for example by camera image capture of a bar code). The mobile device ID is also transmitted and used to access the user's account associated with that mobile device ID. The user may also be required to provide a PIN (Personal Identification Number) before the transaction can proceed. This can be transmitted in the payment request message or if a more secure system is required, this can be required locally before a valid message can be constructed.

Then the mobile device transmits the message containing the shop owner's code to the central computer via the mobile network. The central server looks up the user's account, determines whether he has the appropriate funds therein. Assuming sufficient funds are present, the shop owner's account is looked up using the shop owner's ID code and the server then generates and sends a communication (such as an SMS text signal or e-mail) to a designated number/receiver inside the shop which is connected either by landline or, where this is inappropriate, to a dedicated mobile phone that is the property of the shop owner/shop management etc. Real payment for the shop owner can be made either to a bank account (details of which are stored at the central computer) or to the shop owner's mobile phone. This allows payments to be made to small and medium enterprises (SMEs) that don't have developed banking facilities. For most, including remote landline inaccessible, shop owners, the payment that has been effected in this way will not only represent a convenience for the both shop owner and the customer, but will be potentially cheaper than the debit card/credit card/store of value card systems that are more technologically expensive or have larger charges to allow for default provisions.

If the mobile device is lost, the money associated with the mobile device is not lost with it as an internal access code is only known to the customer and only held on the central system itself. This makes it useless to the thief, except as a mobile device per se, such as a mobile phone. The whole account opening process can be redone and alternative mobile device validated to use the unused cash deposits. The mobile device will have a unique identity number attached with it, but this itself is useless without the second security measure, namely the client's PIN code.

Having described how the prize draw bond product would be used and how a system would operate in managing the interface between the prize draw side of the system and the bond side of the system, it is to be appreciated that the above described embodiments are exemplary only and that modifications will occur to those skilled in the art without departure from the spirit and scope of the present invention. For example, the long-term event has been described in the present embodiments as a long-term zero coupon bond. However, it is possible for this to be another types of long-term investment, which is preferably acceptable to Islamic teaching described above, for example.

Several specific products are now described which are related to the above described concepts but which themselves each have a unique advantage as a product over other similar products currently available on the market today. These products use the system described above, but vary other aspects of the solution.

The Products

With the partial exception of the Egyptian and other Islamic Premium bonds on which a considerable amount of work has already been done by the present inventor prior to this application, all the following products described herein after have a degree of interlinkage with respect to the fact that:

1 ) The Distribution Medium will dictate that some of the product features nominally common to a number of seemingly similar products will in fact be different for those nominally similar products, i.e. a fixed terminal network and/or a mobile phone distribution medium both depending on a central system database for registration of transactions as well as other calculations related to those transactions can only operate according to certain parameters some of which affect product features differently. Thus the product offered on a central system and terminal network may be different to one offered on a central system and mobile phone network.

2) The Medium is the Product i.e. the distribution medium may be viewed in the eyes of the consumer as the product itself.

The following products are each innovative of themselves. Each is directed to different aspects and combinations of aspects of the present invention as will be clear from a full understanding of this document. All of these products are believed to be acceptable to at least a part of the worldwide Muslim community by virtue of the abstraction method of implementing the attachment principle described previously. PRODUCT GROUP A

LONG-TERM FINANCIAL INSTRUMENTS WHICH UNDERLIE OTHER FINANCIAL AND/OR FINANCIAL GAMING AND/OR GAMING PRODUCTS

These use the long-term financial instrument concept as an abstraction to a more traditional gaming product than a prize draw, i.e. a small percentage of the purchase money is put into a financial instrument in order to return the purchase money at some long dated point in the future (over ten years in time) so as to remove consideration from the general legal and Sharia'h definition of prize, consideration and chance.

Added to this abstraction method is the concept of any form of game such as the prize draw described above. The product could be a combination of any normal gaming product and the above described long-term financial instrument accessed by user ticket purchase and bank registration. Relatively newer gaming products can be used, such as financial market index betting products marketable for low-purchase prices in jurisdictions which traditionally regard "betting" money per point of movement of a given financial index as gambling and not as the financial instrument the underlying index is reflecting, thus not benefiting from capital markets legislation allowing the underlying financial instrument.

Given the intended wide distribution network and given that it is desired to benefit from the definition of skill-based activity, the product is preferably directed to financial market speculation products hence the kind of products tied to movements in financial markets as offered by index companies speculating on index movements, for example. This product is aimed at sophisticated markets in the developed world where the players would feel

/ they have some understanding of how markets work and don't ordinarily have the resources to speculate on the markets, but would enjoy using their skills to leverage their return by investing a low stake on the direction of markets. In other words, i.e. for a dollar, the player could predict the up/down direction of the market whereby if correct they receive a multiplier return, but in the worst case scenario if they chose to they would have a stop loss of the one dollar so that it would not be necessary to go the traded option on the index route to contain the potential loss to the purchase stake, allowing the purchase of a "win it or bin it" ticket. However, in the typical and correct use of the ticket leading to registration of the long-term financial instrument (bond), which would result in no potential loss and this would take this product out of the impermissible category.

The option of dealing very inexpensively with the 'know your customer' regulations of financial markets could be provided either by swiping the user's national identity card that exists in many jurisdictions of the world or having a one-off account opening process or by requiring a registration of the long-term financial instrument (bond) sometime after each sale (and at a different location) to make the bond element viable. In reality, this would be at the customer's discretion, i.e. if he wants to make the bond part active in order to guarantee his money, or if he wants to collect his winnings).

In order to effect a transaction tied to an index, without using a traded option, a stop-loss provision would need to be effected limited to the size of the available stake. This means that the counterparty should be a gaming organisation which is effectively conducting a financial operation on one side of the transaction and laying off the other side in a gaming transaction in another jurisdiction in which this is allowed. This would, in effect, be using a gaming group to create a virtual traded option on an index.

PRODUCT GROUP B

CHILDREN'S CHARACTERS SAVINGS/PREMIUM BOND INSTRUMENTS

Premium Bond/Savings Bond Concept Based Products aimed at encouraging parents to buy on behalf of their children. These are thus aimed at being attractive to children who will persuade their parents, who must also approve of the underlying practical elements in order to buy it on their behalf, as in most jurisdictions financial instruments can only be bought on behalf of children by their parents acting as trustees.

The products in this category combine a savings and/or a prize/game concept and are constructed out of the following elements (both to be attractive to children and also their parents who buy it on their children's behalf), which may be combined to produce a premium bond/savings bond. Each ticket is a collectable ticket/card with a children's childhood story character. Purchasing each card not only fulfils the collectable game, but also enters the player into a prize draw. Furthermore, the ticket price is fully refundable via the long-term bond discussed previously. Parents normally tend to either go for low-risk or long-term growth potential type investments when making savings decisions for their children and the product is tailored to this point.

However, at the insignificant prices these products are issued at ($1.00) and with the encouragement from the child looking for the collectible card and the bonus toys, this is not truly designed to compete with other savings decisions made by parents on behalf of children. It is an impulse buy by a parent with accompanying children at a point of sale, where children will be agitating for a number of things a parent may think unbeneficial i.e. sweets, and the parent is motivated because this buy as opposed to other "not good for you buys" carries savings benefits and the chance of winning a prize! Although this is a new product which may make parents diverge from their normal savings decision pattern on behalf of children. It is also possible to seek to match the normal parental investment pattern, by reducing the prize winning opportunity, i.e. devoting more of the purchase price to the underlying savings instrument which thereby exceeds the simple return of the purchase price and rather delivers back a greater savings element. For example a $1 ticket could return back $2 in 20 years, provide a collectable card and also give the player a chance in a prize draw.

Looking now at this product in greater detail, it can involve a rechargeable card (reprintable plastic card) customised in the appearance of a favourite childhood character all with elements from a favourite childhood story - thus for example a Harry Potter Gringott premium bond, a Gringott being a single currency unit of whatever country they are sold in. A single Gringott will thus be a savings/premium bond with a respectable return and/or a prize.

Each childhood character or item from a childhood story will be matched to the underlying investment vehicle according to the indications of market research. Thus a Harry Potter Wizard could contain a stock market-based underlying vehicle whilst a 'Dark Lord' or a 'Voldemort' could contain a highly geared commodity vehicle for example.

These products are ideal for impulse buys made by parents on behalf of children where parents are particularly receptive to the demands of their children, i.e. family restaurants, children's bookstores, supermarkets, newsagents, dress shops, children's clothing shops and toy shops. They can also be made available in banks and other institutions where parents may think wistfully about savings for their children. This leads to the idea of combining the central systems of a gaming company with the terminal distribution network of AMEX, Barclaycard and other card payment systems which already have a wide terminal distribution network in the above type of establishments, most of which, with the exception of supermarkets and newsagents, are not normally used for prize draw ticket distribution and hence don't have prize draw ticket terminals.

With the above example of a Gringott, every purchase of say 10 can also entitle the child to some purely toy item. The child is thus attracted to the collectable nature of the card itself on which is registered the bond as well as the toy, which the purchase of an individual Gringott and/or several Gringott's entitles the purchaser to.

A commodity/stock market combined investment vehicle may also be utilised for the long-term bond. PRODUCT GROUP C

Online Gambling Site Premium Bonds/Prize Schemes

This is a loyalty scheme aimed at online gamers which dictates that as long as a certain amount is held in an online gaming account then that amount can enter a prize draw on a normal premium bond style multiple draw basis. There would have to be a minimum period in which this amount - here notionally $100, could not be pledged for a gambling transaction so as to allow it to build up an interest generated prize pool before the bond could be "put" (i.e. sold back) to immediately fund a gambling transaction that lost. A minimum amount that has to be held for a minimum period which is itself lower than the minimum amount required to enter the scheme could be required - the difference between the two being utilisable for a gaming transaction. By linking up with online gaming sites the terminal network can be used where jurisdictions permit to take payments to lodge in an online gaming account for people who wish to access internet gaming but don't have credit/debit card facilities that allow them to do this.

Another product to which the present invention could be applied is a sports- related product in which a sports-result forecasting process which generates a series of numbers of skill-based selections of win/lose or draw options could be used as an alternative to a prize draw incentive. One particular popular area of application would be for football result predictions.

Claims

Claims:

1. A system for processing a multifunctional ticket, the ticket representing an entry item in both a short-term multiple-entry event and a long-term event, the system comprising:

Receiving means for receiving a request for a user entry into the short- term multiple-entry event;

Authorising means for implementing an authorisation event authorising the request, the authorising means being arranged to generate a unique ticket identifier associated with the user entry;

First storing means for storing the unique ticket identifier and a timestamp relating to the request authorisation event in a database record relating to a first function of the ticket;

Identification obtaining means for obtaining owner identifier information relating to an owner of the multifunction ticket independently of the authorisation event; and

Second storing means for storing the owner identifier information, the unique ticket identifier or an identifier uniquely associated with the ticket identifier and the timestamp or a date associated with the timestamp in a database record relating to a second function of the ticket,

Wherein the first and second functions are executed on different timescales and the first function relates to the short-term event and the second function relates to the long-term event.

2. A system according to Claim 1 , wherein the receiving means is arranged to receive a unique card registration identifier with the authorisation request and the authorisation means is arranged to access a pre-registered user database to determine whether the card registration number is valid for authorisation.

3. A system according to Claim 2, wherein the identification obtaining means is a database of pre-registered users and the system further comprises means for querying the database to obtain details of the pre-registered user.

4. A system according to Claim 2, wherein the identification obtaining means is a database of pre-registered users and the system further comprises means for querying the database to obtain a unique pre-registered reference identifier to the pre-registered user.

5. A system according to Claim 4, wherein the second storing means is arranged to store the unique pre-registered reference identifier as the identifier uniquely associated with the ticket identifier.

6. A system according to Claim 4, further comprising processing means for using an algorithm to convert the unique pre-registered reference identifier into the identifier uniquely associated with the ticket identifier.

7. A system according to Claim 1 , wherein the request is received from a remote ticketing terminal and the system further comprises transmission means for transmitting a unique identification number back to the remote ticketing terminal, the unique identification number being linked to the time stamp and the at least one user-selected option.

8. A system according to any preceding claim further comprising a remote ticketing terminal for issuing the multifunction ticket.

9. A system according to Claim 8, wherein the remote ticketing terminal comprises local authentication means arranged to carry out a local authentication procedure of the card owner.

10. A system according to any Claim 8 or 9, wherein the remote ticketing terminal is arranged to have access to the first storing means and is arranged on presentation of the unique ticket identifier, to determine whether the short- term event has occurred and whether the at least one-user-selected option associated with the unique ticket identifier, matches a stored short-term event result information item.

11. A system according to any of Claims 8 to 10 as dependent on Claim 7, wherein the receiving means is arranged to receive the unique identification number; and the system further comprises: comparing means for comparing the received unique identification number with the unique ticket number stored in the first storing means; and long-term event handling means for generating a unique long-term event identification number uniquely related to the unique ticket number and for sending the same to the second storing means if the unique identification number and the unique ticket number match.

12. A system according to Claim 11 , wherein the comparing means is arrange to compare the date of receipt of the unique identifier with the timestamp associated with the unique identifier and to enable generation of the unique long-term event identification number if the time between the current date and the timestamp is less than a predetermined value.

13. A system according to any of Claims 8 to 12 as dependent on Claim 7, further comprising a remote issuing terminal for issuing a user-identifying entry in the long-term event, the issuing terminal comprising: means for forwarding the unique identifier number to the receiving means; entering means for entering in user identification information; obtaining means for obtaining the identifier uniquely associated with the ticket identifier; and producing means for producing a user-identifiable certificate for an entry in the long-term event.

14. A system according to Claim 13, wherein the remote issuing terminal is arranged to have access to the second storing means and is arranged on presentation of the identifier uniquely associated with the ticket identifier, and user identification information to determine whether the long-term even has occurred.

15. A system according to Claim 13 or 14, wherein the remote ticketing terminal comprises a surrendering module arranged to enable surrender of a multifunction ticket for which the short-term event has passed and the long- term event has still to occur, the surrender module being arranged to enable the issue of a new multifunction ticket at a discount and to send instructions to the second storing means for the cancelling of the entry in the long-term event corresponding to the surrendered ticket.

16. A multifunction ticket or like information store for use with a system according to any preceding claim.

17. A multifunction ticket or like information store, representing an entry item in both a short-term multiple-entry event and a long-term event, the ticket comprising: a machine-readable unique ticket identifier, the identifier providing means for identifying pre-registered information about the owner of the ticket; and a time stamp or information relating thereto concerning the date of a ticket authorising procedure;

wherein a specific one of the multiple possible functions of the ticket can be determined and authenticated by use of the machine-readable unique ticket identifier and the time stamp.

18. A multifunction ticket according to Claim 17, further comprising a plurality of prepaid elements, each element representing an entry into the multiple entry short-term event and into the long-term event, the ticket being arranged to mark each prepaid element once it has been used to participate in the multiple-entry short-term event.

19. A multifunction ticket according to Claim 17 or 18, wherein the ticket identifier, time stamp and user-selected options are stored electronically in the ticket.

20. A multifunction ticket according to any of Claim 19, wherein the ticket comprises electronic data within a mobile telecommunications device.

21. A multifunction ticket according to Claim 17 or 18, wherein the ticket identifier, time stamp and user-selected options are stored graphically on the ticket.

22. A multifunction ticket according to Claim 21 , further comprising an image of a collectable character or an element of a game apparatus.

23. A multifunction ticket according to Claim 17, further comprising a series of user-selected options relating to the short-term multiple-entry event.

24. A combination of a system according to any of Claim 1 to 15 and a multifunction ticket according to any of Claims 16 to 23.

25. A method of processing a multifunctional ticket, the ticket representing an entry item in both a short-term multiple-entry event and a long-term event, the method comprising: receiving a request for a user entry into the short-term multiple-entry event; implementing an authorisation event authorising the request, the implementing step including generating a unique ticket identifier associated with the user entry; storing the unique ticket identifier and a timestamp relating to the request authorisation event in a database record relating to a first function of the ticket; obtaining owner identifier information relating to an owner of the multifunction ticket independently of the authorisation event; and storing the owner identifier information, the unique ticket identifier or an identifier uniquely associated with the ticket identifier and the timestamp or a date associated with the timestamp, in a database record relating to a second function of the ticket, the method further comprising executing the first and second functions on different timescales with the first function relating to the short-term event and the second function relating to the long-term event.

26. A method according to Claim 25, wherein the request includes at least one user-selected option and the step of storing unique ticket identifier and a timestamp includes storing the at least one user-selected option in the database record relating to the first function of the ticket.