System and method for optimized funding of electronic transactions

• US 20030055783A1
• Filed: 06/20/2002
• Published: 03/20/2003
• Est. Priority Date: 11/06/2000
• Status: Active Grant

• Current Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Original Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Inventors: Cataline, Glen R., Rielly, William Smith, Wallace, William Scott, Sheehan, Mark Robert
• Granted Patent: US 7,587,363 B2
• Time in Patent Office: Days
• US Class Current: 705/40
• CPC Class Codes: G06Q 20/00 Payment architectures, schemes or protocols apparatus for performing or posting payment transactions G07F7/08, G07F19/00; electronic cash registers G07G1/12
• CPC Class Codes: G06Q 20/02 involving a neutral party, e.g. certification authority, notary or trusted third party [TTP]
• CPC Class Codes: G06Q 20/023 the neutral party being a clearing house
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 20/14 specially adapted for billing systems
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof

Abstract

The invention provides systems and methods for managing transactions. The system includes a data input portion that communicates first information regarding a payment request, as well as a decision reference data store for communicating second information regarding parameters for use in determining a payment option for the payment request. The system also includes a processor. The processor inputs the first information and the second information. Then, the processor selectably determines the payment option to direct a transmission of funds from at least one payment source to at least one payee account based on an optimization determination performed by the processor. The optimization determination may provide savings to the institution processing the transaction, or alternatively, may provide savings to the customer initiating the transaction, for example.

Claims

1. A system for managing transactions, comprising:

a data input portion that communicates first information regarding a payment request;

a decision reference data store for communicating second information regarding parameters for use in determining a payment option for the payment request; and

a processor that inputs the first information and the second information, the processor selectably determining the payment option to direct a transmission of funds from at least one payment source to at least one payee account based on an optimization determination performed by the processor.

2. The system of claim 1, wherein the data input portion is an input data store.

3. The system of claim 2, wherein the input data store is a financial payment datastore that stores parameters selected by a user.

4. The system of claim 2, wherein the input data store is an online bill pay datastore.

5. The system of claim 1, wherein the data input portion is a user interface that interfaces with a human payment initiator.

6. The system of claim 1, wherein the decision reference data store includes an affiliation datastore.

7. The system of claim 6, wherein the affiliation datastore obtains updates to information contained therein from at least one affiliation system of record.

8. The system of claim 1, wherein the decision reference data store includes a payment destination datastore.

9. The system of claim 8, wherein the payment destination datastore obtains updates to information contained therein from at least one payment destination system of record.

10. The system of claim 1, wherein the decision reference data store includes a rules datastore, the rules datastore containing rules that are used in the optimization determination performed by the processor.

11. The system of claim 1, the system further including an incoming translator, the incoming translator converting the first information to a form that is understandable by the processor.

12. The system of claim 1, the system further including an outgoing translator, the outgoing translator converting standardized data generated from the optimization determination performed by the processor to data unique to the payment option selected.

13. The system of claim 12, wherein the processor reconciles the first information with the data that is unique to the payment option selected.

14. The system of claim 1, further including a reporting interface, the reporting interface interfacing with the decision reference datastore.

15. The system of claim 1, further including an audit logging datastore, wherein the audit logging datastore collects data generated from the optimization determination performed by the processor.

16. The system of claim 1, wherein the processor determines an error situation in processing the first information and the second information, the system further including an error logging datastore, the error logging datastore inputting and storing data regarding the error situation.

17. The system of claim 16, further including an exception handling processor, the exception handling processor performing further processing on the first information and the second information for which the error situation is determined.

18. The system of claim 16, wherein the exception handling processor allows for manual intervention.

19. The system of claim 1, wherein the optimization determination performed by the processor provides an optimized situation for a financial institution.

20. The system of claim 1, wherein the optimization determination performed by the processor provides an optimized situation for a customer of a financial institution.

21. The system of claim 6, wherein the second information is obtained from the affiliation data store and contains data affiliating the at least one payee account with a plurality of possible settlement mechanisms, each of which are usable to transmit the funds from the at least one payment source to the at least one payee account;

and wherein the processor selects one settlement mechanism out of the plurality of possible settlement mechanisms based on the optimization determination.

22. The system of claim 1, wherein the second information contains data affiliating the at least one payee account with a plurality of possible settlement mechanisms, each of which are usable to transmit the funds from the at least one payment source to the at least one payee account;

and wherein the optimization determination includes the processor selecting one settlement mechanism out of the plurality of possible settlement mechanisms.

23. The system of claim 22, wherein the optimization determination includes using a scoring mechanism that provides a score, the score relating to a credit amount to be provided to a payment request initiator who submits the first information, and wherein the processor selects the one settlement mechanism out of the plurality of possible settlement mechanisms based on the score accorded to the payment request initiator.

24. The system of claim 23, wherein the score accorded to the payment request initiator is based on at least one of the payment source, the payee account, past credit history of the payment request initiator, and daily balance of the payment source.

25. The system of claim 22, wherein the optimization determination performed by the processor includes determining whether a quota has been satisfied for at least one of the settlement mechanisms out of the plurality of possible settlement mechanisms;

and

if the quota has been satisfied for a particular settlement mechanism, then removing the particular settlement mechanism from the plurality of possible settlement mechanisms; and

if the quota has not been satisfied for a particular settlement mechanism, then retaining the particular settlement mechanism in the plurality of possible settlement mechanisms.

26. The system of claim 22, wherein a plurality of first information for respective transactions is input by the processor, the first information for the respective transactions being processed by the processor.

27. The system of claim 26, wherein the processor is maintained by a first entity;

and

the plurality of first information for respective transactions is input by the processor, the first information for the respective transactions being input from a second entity.

28. The system of claim 27, wherein the first information for the respective transactions, which is input from a second entity, is processed by the processor in conjunction with the second information to provide an optimization determination, the results of the optimization determination being forwarded to the second entity.

29. The system of claim 28, wherein the results of the optimization determination are forwarded to the second entity using a three part message, the three part message including:

a first part including the first information;

a second part including information regarding the optimization determination;

and a third part including information that has been translated for processing by a selected payment mechanism.

30. The system of claim 27, wherein the plurality of first information for respective transactions is input by the processor, the first information for the respective transactions being collectively input from the second entity in the form of a batch of transactions.

31. The system of claim 27, wherein the plurality of first information for respective transactions is input by the processor, the first information for the respective transactions being input from the second entity in the form of serial communications.

32. The system of claim 31, wherein the plurality of first information for respective transactions is input by the processor, the first information for the respective transactions each being processed separately in real time as the first information is received by the processor.

33. A system that manages transactions comprising:

an input portion that inputs payment transaction information relating to a requested transaction;

a processor that uses the payment transaction information and a set of available settlement mechanisms to generate an output, the output being the most effective settlement mechanism; and

an output portion that outputs the output from the processor.

34. The system of claim 33, wherein a plurality of payment transaction information is input that each relate to respective requested transactions, the input portion inputting the plurality of payment transaction information collectively using a batch file.

35. The system of claim 33, wherein a plurality of payment transaction information is input that each relate to respective requested transactions, the input portion inputting the plurality of payment transaction information each as a real time transaction.

36. The system of claim 33, wherein the requested transaction is an online bill payment transaction.

37. The system of claim 33, wherein the requested transaction is a balance transfer.

38. The system of claim 33, wherein the requested transaction is an online purchase.

39. The system of claim 33, wherein the output is an internal transfer to an electronic lock box.

40. The system of claim 33, wherein the output is a merchant acquirer.

41. The system of claim 33, wherein the processor uses a good funds model in conjunction with generating the output, the good funds model relating to a risk of using an available settlement mechanism to process the requested transaction, and wherein the processor either:

accepts the risk of the requested transaction for a particular settlement mechanism;

or

does not accept the risk of the requested transaction for a particular settlement mechanism.

42. The system of claim 33, wherein the requested transaction is associated with an account that will be debited upon processing the requested transaction;

and

the processor utilizes a risk scoring algorithm in conjunction with generating the output, the risk scoring algorithm using at least one of age of the account, average balance of the account, available balance of the account, five day total of bill payments outstanding of the account, account status, and number of past NSF transactions so as to determine a level of risk associated with payment of the requested transaction.

43. The system of claim 33, wherein the processor contains a datastore of all available settlement mechanisms.

44. The system of claim 43, where the datastore of all available settlement mechanisms contains a profile, the profile containing information relating to at least one of time to complete settlement of a particular settlement mechanism, cost of a particular settlement mechanism, risk profile of a particular settlement mechanism, and contractual minimums of a particular settlement mechanism.

45. The system of claim 33, wherein the requested payment includes a payment destination, and

wherein the processor utilizes a matching algorithm to match the payment destination with at least one available settlement mechanisms that can process that payment.

46. The system of claim 45, wherein the algorithm assigns various weighting to the requested transaction based on at least one of address matching, account number matching and name matching.

47. The system of claim 33, wherein the processor uses an optimization algorithm in conjunction with generating the output, the optimization algorithm utilizing at least one of a risk score, information in available datastores, profile data;

and destination matching to determine the most effective settlement mechanism.

48. The system of claim 33, wherein the processor uses a group of requested transactions to determine the most cost effective manner in which to process the requested transaction, which is in the group.

57. The system of claim 33, wherein the output is in the form of a record formatted for the most effective settlement mechanism, which is selected by the processor.

49. A system for managing transactions, comprising:

a data input portion communicating first information regarding a payment request;

a decision reference data store for communicating second information regarding parameters for use in determining a payment option for the payment request; and

a processor that inputs the first information and the second information, the processor selectably determining the payment option to direct a transmission of funds from at least one payment source to at least one payee account based on an optimization determination performed by the processor; and

the decision reference data store includes an affiliation datastore, the affiliation datastore obtains updates to information contained therein from at least one affiliation system of record;

the decision reference data store includes a payment destination datastore, the payment destination datastore obtains updates to information contained therein from at least one payment destination system of record; and

the decision reference data store includes a rules datastore, the rules datastore containing rules that are used in the optimization determination performed by the processor; and

the system further including an incoming translator and an outgoing translator, the incoming translator converting the first information to a form that is understandable by the processor; and

the outgoing translator converting standardized data generated from the optimization determination performed by the processor to data unique to the payment option selected.

50. The system of claim 49, wherein the optimization determination includes using a scoring mechanism that provides a score, the score relating to a credit amount to be provided to a payment request initiator who submits the first information, and wherein the processor selects the one settlement mechanism out of the plurality of possible settlement mechanisms based on the score accorded to the payment request initiator, wherein the score accorded to the payment request initiator is based on at least one of the payment source, the payee account, past credit history of the payment request initiator, and daily balance of the payment source.

51. A method for managing transactions, comprising:

communicating first information regarding a payment request;

communicating second information from a decision reference data store regarding parameters for use in determining a payment option for the payment request; and

performing processing including inputting the first information and the second information, the processing selectably determining the payment option to direct a transmission of funds from at least one payment source to at least one payee account based on an optimization determination performed by the processing.

52. The method of claim 51, wherein the decision reference data store includes an affiliation datastore, and the affiliation datastore obtains updates to information contained therein from at least one affiliation system of record.

53. The method of claim 51, wherein the decision reference data store includes a payment destination datastore, and the payment destination datastore obtains updates to information contained therein from at least one payment destination system of record.

54. The method of claim 51, wherein the decision reference data store includes a rules datastore, the rules datastore containing rules that are used in the optimization determination performed by the processing.

55. The method of claim 51, the method further including:

translating the first information to a form that is understandable for the processing.

56. The method of claim 51, the method further including:

converting standardized data generated from the optimization determination performed by the processing to data unique to the payment option selected.