Financial Institution-Based Transaction Processing System and Approach

• US 20090287598A1
• Filed: 06/26/2009
• Published: 11/19/2009
• Est. Priority Date: 11/12/1996
• Status: Active Grant

• Current Assignee: Syncada LLC (US Bancorp)
• Original Assignee: US Bank National Association (US Bancorp)
• Inventors: Hahn-Carlson, Dean W.
• Granted Patent: US 8,589,268 B2
• Time in Patent Office: Days
• US Class Current: 705/38
• CPC Class Codes: G06Q 10/08 Logistics, e.g. warehousing, loading or distribution; Inventory or stock management
• 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 30/04 Billing or invoicing
• 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 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

Transaction processing for financial institution-based transactions is facilitated. According to an example embodiment of the present invention, a transaction processing approach involves the processing of financial aspects of a transaction between buying and selling parties using transaction rules associated with a sponsoring financial institution. Transaction-related information is processed as a function of business rules associated with the sponsoring financial institution to facilitate payment for the transaction and the assessment of fees associated with the transaction processing.

Claims

1. An automated transaction system comprising:

a correlation database that stores

data identifying profiled parties including financial institutions, buyers and sellers;

data for identifying contract-defined transactions between the buyers and sellers;

contract-defined terms for the contract-defined transactions; and

sets of business rule variables and transaction processing rule variables respectively defined on behalf of the profiled parties, and

cross-correlation data for correlating each set of data identifying a contract-defined transaction with data identifying profiled parties for the transaction;

a correlation engine configured to respond to externally-generated event data by accessing the correlation database to identify a related contract-defined transaction and to correlate, with the transaction, data identifying profiled parties and sets of business rule and transaction processing rule variables for the correlated parties;

a transaction-tracking database configured to store status data for each contract-defined transaction, the status data including information defining a characteristic type of each transaction;

a transaction processing engine configured to respond to data identified and correlated by the correlation engine by processing the contract-defined terms and business rule variables for the correlated parties to define settlement terms of each identified transaction, and by tracking events under the contract-defined transaction and updating the status data for the transaction as a function thereof;

a settlement engine configured to respond to the defined settlement terms by, for each transaction, using the correlated variables to

audit the transaction using the settlement terms, the updated status data and the status data for other transactions having a similar characteristic type to determine a condition of credit worthiness for the transaction,

in response to the determined condition of credit worthiness, underwrite payment for the transaction and calculate amounts to be paid to a correlated seller and financial institution using the settlement terms and contract-defined terms, and

based upon the underwriting data and the correlated business rule variables, generate and output electronic payment instructions to effect payment of the calculated amounts.

2. The system of claim 1, wherein the settlement engine is configured to audit the transaction by selecting and executing an auditing algorithm, using the settlement terms, the updated status data and the status data indicating historical characteristics of other transactions as inputs to determine the condition of credit worthiness.

3. The system of claim 1, wherein the settlement engine is configured to generate and output electronic payment instructions by selecting and executing a payment algorithm, using the calculated amounts to be paid and correlated variables for the financial institution as inputs, to generate and output the electronic payment instructions.

4. The system of claim 1, wherein the settlement engine is configured to audit the transaction to determine a condition of credit worthiness by selecting and executing an auditing algorithm, using the settlement terms and aspects of the status data that indicate historical credit variables for a buyer, seller and financial institutions correlated with the transaction.

5. The system of claim 1, wherein the settlement engine is configured to audit the transaction to determine a condition of credit worthiness by selecting an auditing algorithm based upon aspects of the status data indicating historical information for a transaction party, and executing the selected algorithm using the settlement terms, the updated status data and the status data as inputs.

6. The system of claim 1, wherein the settlement engine is configured to audit the transaction to determine a condition of credit worthiness by selecting one of a plurality of auditing algorithms defined for a financial institution sponsoring the buyer based upon stored historical status data for the buyer, and executing the selected algorithm using the settlement terms, the updated status data and the status data as inputs to determine the condition of credit worthiness.

7. The system of claim 1, wherein the settlement engine is configured to underwrite payment by assigning an interest rate to credit extended on behalf of a transaction party to effect the payment, based upon the identified variables for a financial institution extending the credit and upon aspects of the status data characterizing historical data for previous transactions involving the buyer.

8. The system of claim 1, wherein the settlement engine is configured to generate and output electronic payment instructions to effect payment of the calculated amounts by, for a particular seller involved in multiple transactions, generating and outputting an electronic payment instruction to issue a single electronic payment to the seller to provide funds to the seller for payment from all credit issuing institutions in a net funds due to seller position for a particular transaction period.

9. The system of claim 1, wherein the settlement engine is configured to

generate and output electronic payment instructions to effect payment of the calculated amounts from a buyer-sponsoring financial institution identified by the correlation engine, and

generate and output a data feed to the buyer-sponsoring financial institution to update a credit line to the buyer to acknowledge the drawdown of the credit line to provide payment for the transaction, to provide an indication of credit worthiness for related transactions.

10. The system of claim 1, wherein the settlement engine is configured, for each financial institution sponsoring a transaction party and a transaction period during which at least one transaction involving the sponsoring financial institution is audited, to

generate and output electronic payment instructions to effect payment of the calculated amounts by generating instructions to perform inter-bank settlement based upon the calculated amounts for all transactions occurring during the transaction period and involving the sponsoring financial institution, to transfer funds owed to and by the sponsoring financial institution to cover payment for transactions and assessed fees during the period, and

store data indicating the effected payment in the transaction-tracking database for access by the sponsoring financial institution for tracking the payments made relative to each transaction occurring during the transaction period.

11. The system of claim 1, wherein the settlement engine is configured, for each financial institution sponsoring a transaction party and a transaction period during which at least one transaction involving the sponsoring financial institution is audited, to

calculate a net position of the sponsoring financial institution according to a difference between funds owed to and owed by the sponsoring financial institution for all transactions occurring during the transaction period, and storing data representing the calculated net position in the transaction-tracking database,

audit the transaction using the settlement terms, the updated status data and the status data for other transactions having a similar characteristic type to determine a condition of credit worthiness for the transaction by using the stored data indicating the calculated net position to determine a condition of credit worthiness for the sponsoring financial institution,

underwrite payment for the transaction based upon the determined condition of credit worthiness for the sponsoring financial institution,

in response to the calculated net position showing a net amount owed to the sponsoring financial institution, generate and output an electronic funds transfer instruction to transfer funds to the sponsoring financial institution in the amount of the calculated net position, and

in response to the calculated net position showing a net amount owed by the sponsoring financial institution, generate an electronic funds transfer demand to transfer funds from the sponsoring financial institution in the amount of the calculated net position.

12. The system of claim 1, wherein the settlement engine is configured to generate and output electronic payment instructions for all transactions audited during a transaction period by

calculating a net position of each financial institution sponsoring a transaction party according to a difference between funds owed to and owed by the sponsoring financial institution for all transactions occurring during the transaction period,

generate an electronic funds transfer instruction to transfer funds, from a central financial institution that issues payment for all transactions, to all sponsoring financial institutions for which the calculated net position shows an amount owed to the sponsoring financial institution, and

generate an electronic funds transfer demand instruction to transfer funds, to the central financial institution, from all sponsoring financial institutions for which the calculated net position shows an amount owed by the sponsoring financial institution.

13. The system of claim 1, wherein the settlement engine is configured to generate and output electronic payment instructions by using the correlated business rule variables for one of the buyer and a financial institution that sponsors the buyer to identify a financial institution to use for remittance collection from the buyer for the transaction.

14. The system of claim 1, wherein the settlement engine is configured to generate and output electronic payment instructions by using the correlated business rule variables for one of the seller and a financial institution that sponsors the seller to identify a financial institution to use for remittance collection from the seller for fees assessed for the transaction.

15. The system of claim 1, wherein the settlement engine is configured to audit the transaction using the settlement terms, the updated status data and the status data for other transactions having a similar characteristic type by comparing data in the transaction data set with the stored status data based upon comparison criteria specified by the correlated variables, to determine a condition of credit worthiness for the transaction.

16. A computer-implemented method for auditing a multitude of transactions between disparate contracting buyers and sellers on behalf of respective financial institutions that sponsor the buyers and sellers, the method comprising:

storing, in a correlation database,

data identifying profiled parties including financial institutions, buyers and sellers;

data for identifying contract-defined transactions between the buyers and sellers;

contract-defined terms for the contract-defined transactions; and

sets of business rule variables and transaction processing rule variables respectively defined on behalf of the profiled parties, and

cross-correlation data for correlating each set of data identifying a contract-defined transaction with data identifying profiled parties for the transaction;

operating a correlation engine module, in response to externally-generated event data, to access the correlation database to identify a related contract-defined transaction and to correlate, with the transaction, data identifying profiled parties and sets of business rule and transaction processing rule variables for the correlated parties;

storing, in a transaction-tracking database, status data for each contract-defined transaction, the status data including information defining a characteristic type of each transaction;

operating a transaction processing module, in response to data identified and correlated by the correlation engine, to process the contract-defined terms and business rule variables for the correlated parties to define settlement terms of each identified transaction, and to track events under the contract-defined transaction and update the status data for the transaction as a function thereof;

operating a settlement engine module to, in response to the defined settlement terms and using the correlated variables for each transaction,

audit the transaction using the settlement terms, the updated status data and the status data for other transactions having a similar characteristic type to determine a condition of credit worthiness for the transaction,

in response to the determined condition of credit worthiness, underwrite payment for the transaction and calculate amounts to be paid to a correlated seller and financial institution using the settlement terms and contract-defined terms, and

based upon the underwriting data and the correlated business rule variables, generate and output electronic payment instructions to effect payment of the calculated amounts.