SYSTEMS AND METHODS FOR FUNDING PAYBACK REQUESTS FOR FINANCIAL TRANSACTIONS

• US 20070250440A1
• Filed: 12/12/2006
• Published: 10/25/2007
• Est. Priority Date: 04/25/2006
• Status: Active Grant

• Current Assignee: Baker Tilly, Trust Payments Ltd. (Trust Payments Holdings Ltd.)
• Original Assignee: UC Group Ltd.
• Inventors: Hughes, Ian, Holland, Mark, Paulsen, Kobus
• Granted Patent: US 7,941,370 B2
• Time in Patent Office: Days
• US Class Current: 705/39
• CPC Class Codes: G06Q 20/02 involving a neutral party, e.g. certification authority, notary or trusted third party [TTP]
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/0855 involving a third party
• 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 20/12 specially adapted for electronic shopping systems
• CPC Class Codes: G06Q 20/20 Point-of-sale [POS] network systems
• CPC Class Codes: G06Q 20/204 comprising interface for record bearing medium or carrier for electronic funds transfer or payment credit
• CPC Class Codes: G06Q 20/207 Tax processing
• CPC Class Codes: G06Q 20/3674 involving authentication
• CPC Class Codes: G06Q 20/383 Anonymous user system
• CPC Class Codes: G06Q 20/401 Transaction verification
• CPC Class Codes: G06Q 20/4016 involving fraud or risk level assessment in transaction processing
• 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
• CPC Class Codes: G06Q 40/12 Accounting
• CPC Class Codes: G06Q 40/123 Tax preparation or submission
• CPC Class Codes: G06Q 50/188 Electronic negotiation

Abstract

Various embodiments of the invention provide a more secure financial transaction system for e-commerce sectors that (1) more securely processes payment transactions, (2) helps to protect merchants and banks against fraudulent transactions, money laundering, and underage gambling, and (3) helps to limit other abuses in areas of e-commerce that are perceived to pose special risks, such as Internet gaming, travel, and consumer purchasing of electronic goods. To accomplish the above goals, various embodiments of the financial transaction system (1) establish operating and transaction processing protocols for merchants, Internet payment service providers, acquiring banks, and card schemes and (2) provide automated systems for monitoring and securely processing payment and financial transactions.

Claims

1. A system for processing a financial transaction with an online merchant, the system comprising:

a payment service provider module configured for;

receiving a request to transfer funds from a customer account to an online merchant;

in response to receiving the request to transfer funds, allocating at least a portion of the funds to be paid to the online merchant to an escrow account; and

in response to allocating a portion of the funds to be paid to the online merchant to an escrow account, storing the allocated portion of funds in the escrow account for the lesser of a predetermined period of time or until a request for a chargeback or refund request is received by the system.

2. The system of claim 1 wherein the payment service provider module is further configured for periodically generating a reconciliation report for each online merchant, the reconciliation report listing transfer requests that have been received and portions of funds that have been allocated to the escrow account.

3. The system of claim 1 wherein the request is received from a merchant computing device in communication with the payment services provider module over a network.

4. The system of claim 1 further comprising a fraud prevention module configured for applying one or more fraud filters to the request, said one or more fraud filters being selected from one or more of the following:

(1) comparing a first location associated with the customer account with a second location associated with a customer computing device used to transmit the request to the online merchant, and in response to the first location being outside of a first predetermined acceptable distance of the second location, marking the request as potentially fraudulent;

(2) comparing a third location associated with a customer email address with the second location, and in response to the third location being outside of a second predetermined acceptable distance of the second location, marking the request as potentially fraudulent;

(3) comparing a fourth location associated with a customer billing address for the customer account with the second location, and in response to the fourth location being outside of a third predetermined acceptable distance of the second location, marking the request as potentially fraudulent;

(4) comparing a customer identification with a list of individuals prohibited from conducting financial transactions, and in response to the customer identification matching one of the individuals on the list, marking the request as potentially fraudulent;

or

(5) comparing an identification of a customer account with a list of accounts prohibited from conducting financial transactions, and in response to the identification of the customer account matching one of the accounts on the list, marking the request as potentially fraudulent.

5. The system of claim 1 wherein the payment service provider module is further configured for:

receiving a chargeback request for funds previously transferred to the merchant from the customer account; and

in response to receiving the chargeback request, funding the chargeback request from the funds stored in the escrow account.

6. The system of claim 1 wherein the payment service provider module is further configured for:

receiving a refund request for funds previously transferred to the merchant from the customer account; and

in response to receiving the refund request, funding the refund request from the funds stored in the escrow account.

7. A method of funding a payback request received from a customer, said method comprising the steps of:

establishing an escrow account for a merchant, the escrow account being funded by a percentage of funds to be paid to the merchant from one or more accounts associated with one or more customers;

receiving a payback request for a payment previously made to the merchant from an account associated with a particular customer; and

funding the payback request with funds stored in the escrow account.

8. The method of claim 7 further comprising the step of transferring a portion of the funds in the escrow account to the merchant in response to the portion of funds being stored in the escrow account for a particular time period.

9. The method of claim 8 wherein the step of transferring the portion of the funds in the escrow account to the merchant after the portion of funds have been stored in the escrow account for a particular time period includes storing the funds for at least six months.

10. The method of claim 7 further comprising the steps of:

reducing the percentage of funds to be paid by the merchant into the escrow account in response to the merchant receiving a reduced number of payback requests over a particular time period; and

increasing the percentage of funds to be paid by the merchant into the escrow account in response to the merchant receiving an increased number of payback request over said particular time period.

11. The method of claim 7 wherein the step of funding the payback request occurs without dispute.

12. The method of claim 7 wherein the merchant is an online merchant.

13. The method of claim 7 further comprising the step of applying one or more fraud filters to the payback request, the one or more fraud filters configured for identifying potentially fraudulent payback requests.

14. The method of claim 13, wherein the one or more fraud filters are executed by a fraud prevention module implemented on a computer readable medium.

15. The method of claim 7 wherein the payback request is a chargeback request.

16. The method of claim 7 wherein the payback request is a refund request.

17. A method of funding a payback request to a customer, said method comprising the steps of:

receiving a payback request for a payment previously made to the merchant with an account associated with a customer; and

funding the payback request to the customer with funds stored in an account associated with the merchant without dispute.

18. The method of claim 17 wherein the payback request is a chargeback request or a refund request.

19. The method of claim 17 wherein the payback request is received from a financial institution holding the account associated with the customer.

20. The method of claim 17 wherein the funds for the payback request are paid to a financial institution holding the account associated with the customer.