System and method for waterfall prioritized payment processing

• US 20100306103A1
• Filed: 08/06/2010
• Published: 12/02/2010
• Est. Priority Date: 10/31/2003
• Status: Active Grant

• Current Assignee: Mark J. Dickelman, Matthew W. Hankins, William F. Mann III
• Original Assignee: Mark J. Dickelman, Matthew W. Hankins, William F. Mann III
• Inventors: Hankins, Matthew W., Mann, William F. III, Dickelman, Mark J.
• Granted Patent: US 8,620,786 B2
• Time in Patent Office: Days
• US Class Current: 705/40
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• 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

Abstract

The invention comprises a system and method for “waterfall” type payment processing using multiple alternative payment sources. A payor provides account information for multiple payment sources, such as a bank checking account, savings account, first credit card account, second credit card account, and so forth. The multiple payment sources are prioritized so that one is a primary payment source, another is a secondary payment source, another is a tertiary payment source, and so forth. After setting up the waterfall payment arrangement, when a bill becomes due a payee or third party payment administrator submits transactions against the payment sources in their order of priority until the payment is satisfied. Other variations and enhancements are disclosed.

Claims

1-34. -34. (canceled)

35. A computer-implemented method of prioritized processing of payments from a payor, the prioritized processing performed by at least one computer processor, the method comprising:

establishing a plurality of payment source options, the payment source options including multiple types of source accounts;

facilitating communication over a network between the payor and a payee or payment administrator;

establishing over the network through communication between a mobile device and the at least one computer processor, priority rules for prioritizing the payment source options for payment of a bill from the payee, wherein each of said types of source accounts is selectable as a primary payment source having a first priority and a secondary payment source having a second priority to be usable for future payments from the payor;

selecting, through communication with the at least one computer processor, charge distribution rules for distributing a payment across at least two of the prioritized plurality of payment source options according to the priority rules, wherein at least one of the charge distribution rules requires distributing the payment across multiple payment source options even when the primary payment source has sufficient funds to satisfy a payment due;

storing the established priority rules and charge distribution rules in a database for payment of the recurring bill to the payee;

identifying the payment due for the payee;

submitting, by the payee or payment administrator, a transaction against the prioritized plurality of payment sources; and

processing the transaction, using the at least one computer processor, against the prioritized plurality of payment sources in the order of their priority, as set forth by priority rules and the charge distribution rules stored in the database for the recurring bill from the payee and accessible to the at least one computer processor, until one of said payment source options satisfies the payment due, wherein the transition from one payment source to another is automatically executed by the at least one computer processor accessing the database and executing payment in accordance with the priority rules and charge distribution rules;

thereby providing a waterfall payment process enabling a payment due from a payor to be satisfied for a payee using a plurality of prioritized payment sources.

36. The method of claim 35, wherein the selecting is accomplished by the payor using a mobile device over the network

37. The method of claim 35, where the selecting is accomplished by a financial institution.

38. The system of claim 35, wherein the payments are for recurring bills.

39. The method of claim 35, wherein the plurality of payment source options is three, including the primary payment source, the secondary payment source, and a tertiary payment source.

40. The method of claim 35, wherein the plurality of payment source options is greater than three.

41. The method of claim 35, wherein the payor provides specific account information for each of the plurality of payment source options, and wherein the priority of said payment source options is set by the payee or by a payment administrator.

42. The method of claim 35, wherein the payor provides specific account information for each of the plurality of payment source options, and the payor selects the priority of said payment source options, thereby enabling the payor to set both the accounts that are to be used as well as the priority of usage of said accounts.

43. The method of claim 35, wherein submitting a transaction against the prioritized plurality of payment sources in the order of their priority includes submitting a first transaction for a portion of the balance due against a first payment source, and submitting a second transaction for a remaining portion of the balance due against a second payment source, thereby enabling distribution of the charge for the payment due across multiple payment sources in their order of priority.

44. The method of claim 35, wherein the payor payment rules provide (a) a lock-out date or window on which no transaction can be submitted against the at least one specified payment source, or (b) a minimum payment date or window on which a transaction exceeding a calculated amount that depletes funds in the at least one specified payment source beyond a predetermined balance is not to be submitted against the at least one specified payment.

45. The method of claim 35, wherein the payor payment rules provide that payment from at least one specified payment source should be attempted more than once before transitioning to the next priority payment source.

46. The method of claim 35, further comprising conducting at least one of a balance check and a limit check for a specified payment source prior to submitting a transaction for a transaction amount against the specific payment source, thereby enabling the avoidance of submitting transactions against payment sources which are unable to satisfy the transaction amount.

47. The method of claim 35, wherein identifying a payment due for a payee further comprises presenting information of the payment due to the payor prior to submitting a transaction.

48. The method of claim 44, further comprising receiving an approval from the payor prior to submitting a transaction.

49. A computerized system for prioritized processing of payments for recurring bills using at least one computer processor, the system comprising:

means for establishing a prioritized plurality of payment source options to be usable for future payments from a payor, wherein the payor interfaces with the means for establishing using a mobile computing device coupled thereto by a distributed network;

means for establishing payment distribution rules including multiple pre-selected amounts of at least one transaction to be deducted from at least two of the prioritized plurality of payment source options, the pre-selected amounts established prior to identification of a payment due;

means for establishing payor payment rules

database means for storing the established payment distribution rules and established prioritized plurality of payment source options;

means for identifying a payment due for a payee; and

means for automatically submitting, by a payee or payment administrator, a transaction against the prioritized plurality of payment sources and for processing the transaction, using the at least one computer processor, against the prioritized plurality of payment source options in the order of their priority and in amount equal to the pre-selected amount for each of the prioritized plurality of payment source options;

in accordance with the payor payment rules, thereby providing a waterfall payment system enabling a payment due from a payor to be satisfied for a payee using a plurality of alternative payment sources which are prioritized by the at least one computer processor accessing the database means and executing payment.

50. The system of claim 49, wherein the means for establishing comprises a payor waterfall module for establishing and storing the prioritized plurality of payment sources.

51. The system of claim 49, wherein the payor interfaces with the means for establishing using a cellular phone includes an agent for inputting said prioritized payment source data, the telephone device comprising a telephone, cell phone, or PCS.

52. The system of claim 49, wherein the payor interfaces with the means for establishing using a remote computer device coupled thereto by a distributed network, the remote computer device comprising a computer, Palm device, PDA, or wireless device.

53. The system of claim 49, wherein the payor interfaces with the means for establishing using a telephone coupled thereto by a distributed network, the means for establishing including an IVR unit for inputting said prioritized payment source data.

54. The system of claim 49, wherein the means for automatically submitting comprises a payment processor for submitting transactions based on the prioritized payment sources.

55. The system of claim 49, further comprising a recommendation module for recommending a preferred transaction or group of transactions, wherein the recommendation module makes a recommendation of an amount of payment from at least one of the prioritized plurality of payment sources, the recommendation corresponding to a minimum expected cost to the payor;

thereby providing a waterfall payment system enabling a payment due from a payor to be satisfied for a payee using a plurality of alternative payment sources.

56. The system of claim 49, wherein the recommendation module recommends a preferred transaction or group of transactions based on a minimum expected cost to the payor.

57. The system of claim 49, wherein the payment due includes information of a balance and a minimum payment, and wherein the recommendation module is capable of recommending either payment of the balance or payment of the minimum payment.

58. The system of claim 49, wherein the recommendation module processes interest rate information associated with one or more of the plurality of payment sources in order to recommend a preferred transaction or group of transactions based on a minimum expected cost to the payor.

59. The system of claim 49, wherein the payment due is associated with an account having an interest rate, and the recommendation module determines a recommendation based on minimum expected cost to the payor based on said interest rate.