FINANCIAL PAYMENT SYSTEMS AND METHODS USING PAPERLESS CHECK 21 ITEMS

• US 20080086421A1
• Filed: 10/10/2007
• Published: 04/10/2008
• Est. Priority Date: 10/10/2006
• Status: Active Grant

• Current Assignee: Global Standard Financial Incorporated
• Original Assignee: Global Standard Financial Incorporated
• Inventors: Gilder, Clark S., Lalonde, Michael G.
• Granted Patent: US 7,539,646 B2
• Time in Patent Office: Days
• US Class Current: 705/44
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/042 characterized in that the payment protocol involves at least one cheque
• CPC Class Codes: G06Q 20/0425 the cheque being electronic only
• 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 20/108 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

Exemplary embodiments provide a digitally originated check (DOC) through an electronic payment system (EPS) which captures payor metadata instructions regarding the intended payment to a payee. The metadata may be stored in a database or the like for further processing instead of printing a paper check. An output of the metadata can be used to clear the DOC through either paper or electronic clearing mechanisms under Check 21.

Claims

1. A paperless check method, comprising:

(a) presenting the payor with a set of warranties and indemnities applicable to banks of first deposit and clearing banks, wherein the set of warranties and indemnities extend Check 21 regulations between the payor and a payee and through the banks of first deposit and clearing banks, and wherein the set of warranties and indemnities enables the payor to provide a digitally originated check to a payee;

(b) receiving an acceptance from the payor of the set of warranties and indemnities;

(c) receiving a payment instruction from the payor to the payee, wherein the payment instruction is subject to the set of warranties and indemnities;

(d) capturing metadata associated with the digitally originated check, wherein the digitally originated check is created by the payor without an original paper check, and wherein the metadata comprises the payment instruction, a globally unique identifier, tracking information, and security information; and

(e) performing one or more of immediately notifying the payee of the digitally originated check and notifying the payee of the digitally originated check at a later time;

wherein an output from the metadata is interoperable with both paper and electronic clearing methods associated with Check 21 clearing systems.

2. The paperless check method of claim 1, further comprising:

(f) authenticating the payee;

(g) presenting the payee with the set of warranties and indemnities;

(h) receiving an acceptance from the payee of the set of warranties and indemnities; and

(i) performing one of electronically forwarding the metadata to a bank of first deposit as an electronic Cash Letter File compliant to X9.180 and printing a substitute check compliant to X9.140 from the metadata.

3. The paperless check method of claim 2, wherein the security information is operable to prevent tampering with the payment instructions and the substitute check.

4. The paperless check method of claim 2, further comprising (j) electronically endorsing the digitally originated check.

5. The paperless check method of claim 1, wherein the payment instructions comprise any of conditions, limitations, restrictions, conditional acknowledgements comprising business rules governing payment terms, and combinations thereof.

6. The paperless check method of claim 1, wherein the tracking information is operable to provide an audit history of the digitally originated check.

7. The paperless check method of claim 1, wherein the security information comprises a personal identification number defined by the payor for secure retrieval by the payee.

8. A paperless check system, comprising:

(a) data storage comprising a metadata file, wherein the metadata file is associated with a digitally originated check, wherein the digitally originated check is created by a payor without an original paper check, and wherein the metadata file comprises a payment instruction, a globally unique identifier, tracking information, and security information;

(b) a network interface connected to the data storage;

(c) a processor connected to the network interface and the data storage, wherein the processor is configured to;

(i) present a set of warranties and indemnities applicable to the payor;

(ii) receive acceptance of the set of warranties and indemnities from the payor;

(iii) receive payment instructions from the payor;

(iv) create the metadata file with the payment instruction from the payor;

(v) generate and assign the globally unique identifier to the metadata file;

(vi) notify a payee of the metadata file associated with the digitally originated check;

(vii) track the digitally originated check and update the metadata file with an audit history of the digitally originated check; and

(viii) authenticate the digitally originated check;

wherein the set of warranties and indemnities extend Check 21 regulations between payor and payee and through associated banks of first deposit and clearing banks, and wherein the set of warranties and indemnities enables the payor to provide a digitally originated check to a payee; and

wherein an output the metadata file is interoperable with both paper and electronic clearing methods associated with Check 21 clearing systems.

9. The paperless check system of claim 8, wherein the processor is further configured to:

(ix) authenticate the payee associated with the metadata file;

(x) present the payee with the set of warranties and indemnities;

(xi) receive acceptance of the set of warranties and indemnities from the payee; and

(xii) perform one of electronically forwarding the metadata file to a bank of first deposit as an electronic Cash Letter File compliant to X9.180 and printing a substitute check compliant to X9.140 from the metadata file.