The coming decade will see vastly expanded uses of non-traditional payment systems such as smart cards, customer-operated point of sale devices, and internet distributed retailing. All of these applications share three (3) common concerns:

1. security (fraud prevention, confidentiality of financial information),
2. performance (time to authorize and complete a sales transaction), and
3. cost (both implementation cost and on-going cost of operation).

The Agent Transaction Manager (ATM), our product for secure, high speed management of electronic payments, is the only commercially available product that provides support for both traditional (credit/debit card authorization and settlement) and emerging non-traditional electronic payment methods on a single platform. We can quickly implement an electronic payments system using credit/debit cards, smart cards, or customer operated terminals, gain certification for credit and debit merchant accounts, and most importantly, keep up-front implementation costs low. Our long history of secure management of electronic payments, with a proven field experience of fraud loss well below typical industry norms, rewards our customers with the lowest possible discount rates available.

By minimizing losses through fraud ("charge backs") and by enabling our customers to win the lowest processing fees for electronic transactions, the Agent Transaction Manager provides the lowest possible operational costs in the industry.

The Agent Transaction Manager runs on any UNIX-capable desktop, workstation, server, or mainframe platform, and can grow with your business. Our multi-platform software systems permits customers to move from one computer hardware environment to another as their needs change and grow. Our scalable solution allows our customers to operate on anything from standalone low cost Intel-based microcomputers, to distributed networks of high end, fault tolerant Tandem mainframes, all running the same version of the Agent Transaction Manager.

In order for an electronic payments system to be successfully implemented, both the end user and the merchant must be protected against fraud and security risks. In the past the electronic payment industry depended upon two important methods to limit losses: 1) face-to-face contact with a sales clerk and 2) the capture of a signature. Electronic or telephone authorization systems were created to support these traditional person-to-person transactions, not to replace them.

As a result, developing electronic commerce applications that do not follow the classic clerk and customer transaction model have found current credit authorization systems inadequate. Losses from fraudulent and/or stolen credit cards and from data collection errors regularly exceed 50% of total sales for some internet sales applications.

The Agent Transaction Manager stops losses from fraud before they occur through "velocity controls" that continuously monitor all sales transactions for patterns and indicators of possible fraud. Merchants control which indicators and patterns to monitor, and how to weigh the significance of any element in the decision to accept or deny a sales transaction. The Agent Transaction Manager allows merchants to alter these rules, and to create new rules, "tuning" the application based upon actual experience.

1. Customer makes a selection on Self-Service Vending Machine.

2. Self-Service Vending Machine requests authorization through the Agent Transaction Manager Central Host Computer. PIN numbers for bank debit (ATM) cards are managed using secure PIN pads on the Self-Service Vending Machine. Sometimes in larger configurations, an intermediate step is included as station or regional computers running the Agent Transaction Manager manage communications traffic between point-of-sale sites and the Central Host Computer, and process transactions as part of a distributed processing system.

3. After receiving the credit/debit authorization request, the Central Host Computer performs several anti-fraud measures ("velocity controls"). Velocity controls (see above) allow merchants to set card transaction limits based upon total number of purchases, dollar value of purchases, or types of purchases for a card. Merchants use velocity controls to limit losses from card sales by identifying purchasing patterns that indicate possible fraud or card abuse. A sales transaction is only sent to the bank or financial institution for processing if it passes all local tests defined in the velocity controls.

4. Central Host Computer routes authorization request to proper Bank/Processor.

5. Response is routed by Central Host Computer to Self-Service Vending Machine. The average elapsed time for a credit/debit card authorization is between 3 to 5 seconds. The design of the Agent Transaction Manager permits this response time to be maintained even under peak system usage periods.

6. Record of authorization and transaction is maintained at Central Host Computer. Redundant records are maintained of all transactions and archived according to the contractual requirements with each bank or processor. Administrators are able to inquire on any sale or attempted sale. In this way, customer complaints of denied sales or non-delivery of product can be answered immediately using the on-line inquiry facilities of the Agent Transaction Manager.

All details of sales made during the sales period are collected at the Central Host Computer location and assembled into one or several settlement transactions. All banks and credit card processors have exacting regulations covering all aspects of credit card processing and the settlement is extremely important. Agent Transaction Manager submits settlement records using the processes and formats required to qualify for the very lowest processing rates. Multiple settlements can be conducted automatically, for example one location for Visa, another for MasterCard, and another for Discover. If needed, cards of one type, for example Visa, can be split among two or more settlement processors according to the issuer of the cards.

The entire process is entirely automated, including the printing of balance reports and bank deposit records.

In the past fifteen years we have continued to improve and extend our Agent Transaction Manager product to automate all areas of customer operated point-of-sale support. The mass transit industry has been the first to show the significant opportunities available in the development of electronic payment systems operated by the end user. Virtually every successful electronic payments project in this industry has used systems provided by our company. We look forward to increasing the technical lead we enjoy in this industry and moving into other applications outside of transit.