System and method for facilitating a subsidiary card account

• US 20040143527A1
• Filed: 06/19/2003
• Published: 07/22/2004
• Est. Priority Date: 05/29/2001
• Status: Active Grant

• Current Assignee: Liberty Peak Ventures, LLC (Dominion Harbor Enterprises, LLC)
• Original Assignee: American Express Travel Related Services Company, Inc. (American Express Company)
• Inventors: Hobbs, Chris, Benkert, Marc, Rubinshtein, Tomer, Park, Grace, Okamoto, Kazuhiko
• Granted Patent: US 7,899,742 B2
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/105 involving programming of a portable memory device, e.g. IC cards, "electronic purses"
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes

Abstract

The present invention provides a system and method for providing a flexible limit subsidiary account that may be issued by a Foreign Financial Institution. In particular, the present provides a system and method for allowing a parent to provide funds to a subsidiary and to control the spending of subsidiary or spending capacity. The card account may be issued at the request of the parent who may retain the ability to define, modify, and/or terminate the spending and/or debt accumulation limits for the subsidiary card account as well as other features as described in the attached disclosure. The system may be configured to provide the ability for parent to eliminate risks associated with fluctuations in currency exchange rates by committing to fixed automatic long-term charges at a fixed foreign exchange rate for a fixed term.

Claims

1. A method for facilitating the administration of a subsidiary account comprising the steps of:

receiving a request from a parent for a subsidiary account, said parent identifying a parent account, said parent account being a financial account associated with the parent, the parent account having a parent spending power;

establishing a subsidiary account having a subsidiary spending capacity; and

reducing said parent spending power by an amount less than said subsidiary spending capacity;

wherein said parent account is established by a first institution and said subsidiary account is at least partially maintained by a second institution.

2. The method according to claim 1, wherein said subsidiary account is fully maintained by said second institution.

3. The method of claim 1, wherein said second institution is situated in a location remote from said first institution.

4. The method of claim 1, wherein said second institution is situated in a country that is different from the country of said first financial institution.

9. The method of claim 1 further comprising the step of modifying said subsidiary spending capacity in response to a request from said parent.

10. The method of claim 9, further comprising the step of modifying said parent spending power based on a modification of the subsidiary spending capacity.

11. The method of claim 1, further comprising the step of determining a parent spending power for the parent account and a subsidiary spending capacity for the subsidiary account in accordance with a predetermined set of rules.

12. The method of claim 1, further comprising the step of tracking the spending of a subsidiary account.

13. The method of claim 1, further comprising the step of limiting total spending facilitated by a subsidiary account.

14. The method of claim 1, further comprising the step of limiting spending for a specific class of goods or services facilitated by a subsidiary account.

15. The method of claim 1, further comprising the step of limiting spending at a specific class of merchants facilitated by a subsidiary account.

16. The method of claim 1, further comprising the step of limiting spending at a specific merchant facilitated by a subsidiary account.

17. The method of claim 1, further comprising the step of enforcing specific restrictions against a subsidiary account, wherein the specific restrictions exist to condition the use of the parent account.

18. The method of claim 1, further comprising the step of accommodating an emergency transaction.

19. The method of claim 1, further comprising the step of generating a statement for a subsidiary account.

20. The method of claim 1, further comprising the step of generating a statement for a parent account.

21. The method of claim 1, further comprising the step of terminating said subsidiary account in response to a request from said parent.

22. The method of claim 1, wherein said subsidiary account is configured to carry-over spending capacity from one cycle to the next.

23. The method of claim 1, wherein said subsidiary account is configured to prevent carry-over of spending capacity from one cycle to the next.

41. The system of claim 1, further comprising:

a merchant system at least a portion of which is located domestically, said merchant system including a merchant server, said merchant server configured to receive at least one of an account number and a transaction request;

a customer interface configured to provide said account number to said domestic merchant server; and

a foreign financial institution system configured to communicate with said merchant server.

42. A system according to claim 41, wherein said merchant system further includes a merchant point of sale (POS) device configured to communicate with said customer interface and said merchant server, said POS device configured to receive said account number and provide said account number and a transaction request to said merchant server.

43. A system according to claim 41, wherein said subsidiary account is reloadable.

44. A system according to claim 41, wherein said subsidiary account is fully maintained by a foreign financial institution.

45. A system according to claim 42, wherein said foreign financial institution system further includes a financial institution server configured to communicate with said merchant server.

46. A system according to claim 45, wherein said foreign financial institution system further includes a financial institution database configured to communicate with said financial institution server, said financial institution database including a plurality of distinct subsidiary account storage locations wherein at least one of said plurality of distinct subsidiary account storage locations stores a unique subsidiary card number, said unique subsidiary card number corresponding to said subsidiary account number.

47. A system according to claim 46, wherein said subsidiary account number further includes a unique transaction routing code, said routing code corresponding to said foreign financial institution system.

48. A system according to claim 47, wherein said merchant server provides said subsidiary account number and said transaction request to said financial institution server, in accordance with at least one of said account domestic payment network system code and said unique transaction routing code.

49. A system according to claim 48, wherein said foreign financial institution server is configured to match said account number to said corresponding one of said plurality of subsidiary card numbers, said foreign financial institution server further configured to retrieve said corresponding subsidiary card number in response to said transaction request, said subsidiary card number including subsidiary account information.

50. A system according to claim 49, wherein said subsidiary card number is characterized by a predetermined monetary value.

51. A system according to claim 50, wherein said foreign financial institution server is configured to compare said transaction request to said predetermined monetary value, and provide to said merchant system at least one of a transaction authorized or transaction denied message, said transaction authorized message being provided where said transaction request is less than or equal to said predetermined monetary value, said transaction denied message being provided where said transaction request is more than said predetermined monetary value.

52. A system according to claim 51, wherein said financial institution is characterized by a financial institution domestic payment network system code, said financial institution domestic payment network system code corresponding to said account domestic payment network system code.

53. A system according to claim 52, wherein said financial institution server is configured to provide a monetary amount to said merchant server in response to said transaction request.

54. A system according to claim 53, wherein said financial institution server is configured to provide said monetary amount in accordance with existing monetary exchange rates.

55. A system according to claim 54, wherein said subsidiary card number is characterized by an expiration date, and said transaction request is characterized by a transaction request date.

56. A system according to claim 55, wherein said merchant system server provides said transaction request date to said financial institution system server.

57. A system according to claim 56, wherein said financial institution server is configured to compare said transaction request date to said expiration date, said merchant server further configured to return a transaction denied message where said transaction date occurs later in time than said expiration date.

58. A system according to claim 57, further including a sponsor configured to communicate with said financial institution system server, said sponsor configured to provide said predetermined monetary value to said financial institution for establishing said subsidiary account spending limit, said spending limit corresponding to said predetermined monetary amount, said predetermined monetary value provided in a currency capable of being processed by said financial institution system.

59. A system according to claim 58, wherein said financial institution server is configured to reload said spending limit in response to said provided predetermined monetary value.

60. A system according to claim 59, wherein said sponsor is configured to provide an updated expiration date to said financial institution server, said updated expiration date corresponding to at least one of said subsidiary card numbers, said updated expiration date configured to replace said subsidiary card expiration date correlating to said one of said subsidiary accounts.

61. A system according to claim 60, wherein said financial institution server is configured to provide a portion of said predetermined monetary value to said sponsor at said expiration date, said portion of said predetermined value being provided in the currency of the country of at least one of said foreign financial institution and said sponsor.

5. A method for facilitating the administration of a subsidiary account comprising the steps of:

receiving a request from a parent for a subsidiary account, said parent identifying a parent account, said parent account being a financial account controlled by the parent, the parent account having a parent spending power;

establishing a subsidiary account having a subsidiary spending capacity; and

reducing said parent spending power by an amount less than said subsidiary spending capacity;

wherein said second institution is situated in the same country as the country of said first financial institution.

6. The method of claim 5, wherein said parent account is situated in a host country and said subsidiary account is configured for effecting payment to a merchant located within the host country.

7. The method of claim 5, wherein said parent account is situated in a first location and said subsidiary account is configured for effecting payment to a merchant located remote from said first location.

8. The method of claim 5, wherein said parent account is situated in a host country and said subsidiary account is configured for effecting payment to a merchant located outside the host country.

24. A method for providing a plurality of subsidiary accounts comprising the steps of:

receiving a request from a parent for a plurality of subsidiary accounts, each of said subsidiary accounts having a subsidiary spending capacity, said parent identifying a financial account controlled by a parent, the financial account having a parent spending power; and

reducing said parent spending power by an amount less than the sum of said subsidiary spending capacities of each of said subsidiary accounts;

wherein a subsidiary spending capacity is determined according to a predetermined currency exchange rate.

25. The method of claim 24;

said method further comprising;

providing a domestic payment network system code to a foreign financial institution, the foreign financial institution being located abroad, the foreign financial institution including a foreign financial system server and foreign financial institution database;

establishing a subsidiary account on the foreign financial institution database, the subsidiary account being characterized by an account number;

receiving the account number from a merchant system, the merchant system being located domestically and the merchant system including a merchant server;

facilitating providing the account number and a transaction request to the foreign financial institution, the account number being provided in accordance with at least one of the domestic payment network system code and a routing code;

facilitating matching the account number to the subsidiary account; and

facilitating satisfying the transaction request.

26. A system for administering a subsidiary account having a subsidiary spending capacity, the system comprising an account administrator in communication with a transaction administrator, a settler, and a statement generator, the account administrator configured to receive a request from a parent having a parent account and to facilitate the establishment of one or more subsidiary account, the transaction administrator configured to facilitate transactions consuming said subsidiary spending capacity, the settler configured to facilitate providing a settling payment to a merchant, the statement generator configured to facilitate generating a parent account statement, the parent account being established by a first institution, and the subsidiary account being at least partially maintained by a second institution.

27. The system of claim 26, wherein the account administrator is configured to facilitate adjustment of a parent spending power of said parent account and a subsidiary spending capacity of said subsidiary account in accordance with a predetermined set of rules.

28. The system of claim 27, the predetermined set of rules configured to require an allocation of risk between the administrator and the parent, whereby said parent spending power account is reduced by an amount less than said subsidiary spending capacity.

29. The system of claim 26, wherein the account administrator is configured to facilitate execution of a request from a parent to modify said subsidiary spending capacity.

30. The system of claim 29, wherein the account administrator is further configured to facilitate modification of said parent spending power based on said subsidiary spending capacity.

31. The system of claim 26, wherein the account administrator is further configured to track the spending of a parent account and a subsidiary account.

32. The system of claim 26, wherein the account administrator is further configured to place a hold on subsidiary account if parent fails to remit payment as promised.

33. The system of claim 26, wherein the transaction administrator is configured to limit total spending facilitated by the subsidiary account based on said subsidiary spending capacity.

34. The system of claim 26, wherein the transaction administrator is configured to limit spending for a specific class of goods or services.

35. The system of claim 26, wherein the transaction administrator is configured to limit spending at specific classes of merchants or service providers.

36. The system of claim 26, wherein the transaction administrator is configured to limit spending at specifically identified merchants or service providers.

37. The system of claim 26, wherein the transaction administrator is configured to enforce specific restrictions against a subsidiary account, wherein the specific restrictions exist to condition the use of the parent account.

38. The system of claim 26, wherein the transaction administrator is configured to accommodate emergency transactions.

39. The system of claim 26, wherein the statement generator is configured to generate and dispatch a statement for each subsidiary account.

40. The system of claim 26, wherein the settler is configured to arbitrate disputed transactions associated with subsidiary account.