PROCESSING NON-TRADITIONAL TRANSACTIONS ON A TRADITIONAL PAYMENT NETWORK

• US 20120016728A1
• Filed: 07/13/2010
• Published: 01/19/2012
• Est. Priority Date: 07/13/2010
• Status: Active Grant

• Current Assignee: DFS Services LLC (Discover Financial Services)
• Original Assignee: DFS Services LLC (Discover Financial Services)
• Inventors: Ahmad, Farhan, Siljamaki, Meeri
• Granted Patent: US 9,940,619 B2
• Time in Patent Office: Days
• US Class Current: 705/14.23
• 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 20/12 specially adapted for electronic shopping systems
• 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 30/0222 During e-commerce, i.e. online transactions
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

A system for and methods of processing non-traditional payment transactions on a traditional payment network is disclosed. More specifically, a payments system includes one or more payment program managers (PPMs), which are the providers of alternative payment products, in combination with one or more payment program processors (PPPs), which serve as processors for the PPMs. The PPMs and PPPs operate on a payment network, such as a traditional payment network. The payments system includes the utilization of traditional bank identification numbers (BINS) in order to process non-traditional transactions on a traditional payment network. Surrogate numbers are issued on BIN ranges to the non-traditional transactions in order to process them on the traditional payment network. Additionally, the payments system includes pricing structures that are associated with alternative payment products. These pricing structures are implemented and processed on the payment network, alongside the pricing structures of traditional payment products.

Claims

1. A method of processing a financial transaction between a payer and a merchant through an electronic financial transaction processing system using a first nontraditional payment mechanism comprising:

electronically receiving, from an electronic device associated with the merchant, a request to authenticate the transaction, the request comprising indicia for the payer and the first non-traditional payment mechanism;

authenticating the payer with an operator of the first non-traditional payment mechanism;

determining a surrogate number for association with the transaction, the surrogate number being a payment number for use on a traditional payment network and having been allocated by the operator of the traditional payment network;

associating the surrogate number with the transaction in a mapping database; and

electronically transmitting the surrogate number to the merchant.

2. The method of claim 1, the determining a surrogate number further comprising:

querying a surrogate number database for an available surrogate number; and

receiving an available surrogate number, the available surrogate number being within a subrange of surrogate numbers corresponding to the first non-traditional payment mechanism.

3. The method of claim 1, further comprising:

receiving, from the merchant via the traditional payment network operator, a request to authorize the transaction, the request comprising indicia for the associated surrogate number and a dollar amount for authorization; and

transmitting, in response to the request, an authorization approval or decline indication to the merchant via the payment network operator.

4. The method of claim 1, further comprising:

receiving a settlement file from the payment network operator comprising a plurality of transactions at the merchant for a plurality of non-traditional payment mechanisms including the first non-traditional payment mechanism, each of the plurality of transactions associated with a surrogate number;

identifying each transaction among the plurality of transactions that are associated with the first non-traditional payment mechanism;

determining, for the identified associated transactions, the associated indicia for the payer and the first non-traditional payment mechanism, and the dollar amounts of the transactions;

sending the settlement file to the operator of the first non-traditional payment mechanism for settlement of funds with the payment network operator in an amount corresponding to the dollar amounts of the identified associated transactions.

5. The method of claim 1, the determining the associated indicia further comprising:

performing a reverse-lookup of the surrogate number for the transaction in a surrogate number database.

6. A method of processing a financial transaction between a payer and a merchant through an electronic financial transaction processing system using a first non-traditional payment mechanism comprising:

electronically receiving, from an electronic device associated with the merchant, an authorization request for the transaction, the request including a surrogate number previously associated with the transaction and indicia for use with the first non-traditional payment mechanism, the surrogate number being a payment number for use on a traditional payment network;

transmitting the authorization request to a processor for the non-traditional payment program via the traditional payment network, the processor for the first non-traditional payment mechanism being identifiable by at least a portion of the surrogate number;

determining, based on the surrogate number, a price to charge for processing the transaction; and

electronically transmitting a response to the authorization request to the merchant.

7. The method of claim 6 wherein the price comprises one or both of a percentage of the transaction amount and a flat fee, to be charged to the merchant and payable to an operator of the first non-traditional payment mechanism.

8. The method of claim 6 wherein the price further comprises additional fees payable to or by an operator of the first traditional payment network.

9. The method of claim 6, further comprising:

electronically receiving, from the merchant, a request to authenticate the transaction, the request comprising indicia for the payer and the non-traditional payment mechanism;

forwarding the request to a processor of the non-traditional payment mechanism;

receiving, from the non-traditional payment mechanism processor, a response to the request, the response comprising the surrogate number; and

transmitting the surrogate number to the merchant.

10. The method of claim 6, further comprising:

receiving a settlement file comprising a plurality of transactions at the merchant, each of the plurality of transactions associated with a traditional payment number, a portion of the plurality of transactions associated with one or more non-traditional payment mechanisms and a portion of the plurality of transactions associated with a traditional payment mechanism;

identifying a subset from the plurality of transactions that are associated with at least the first of the non-traditional payment mechanisms; and

transmitting, to the processor of the first non-traditional payment mechanism, a settlement file comprising information for the identified subset of transactions.

11. The method of claim 6, wherein the settlement file comprises indicia of fees to be paid to or collected from an operator of at least the first non-traditional payment mechanism.

12. The method of claim 6 wherein determining the price to charge for the transaction comprises calculating the price from a plurality of pricing options based on a portion of the surrogate number.

13. A method of processing a financial transaction for a payer through an electronic financial transaction processing system using a non-traditional payment mechanism comprising:

electronically receiving, from the payer and via an electronic device, purchase information for a transaction comprising indicia for the payer and the non-traditional payment mechanism;

transmitting an authentication request comprising the indicia to a processor for the non-traditional payment mechanism or to an operator of a traditional payment network;

receiving, in response to the transmission, a surrogate number for the transaction, the surrogate number having been associated with the transaction and the indicia, and the surrogate number being a payment number for use on a traditional payment network;

transmitting an authorization request, via the traditional payment network, to a processor for the traditional payment mechanism, the authorization request comprising the surrogate number and a dollar amount for the purchase;

electronically submitting, to the operator of the traditional payment network, either directly or indirectly, a settlement file comprising the surrogate number; and

receiving an electronic transfer of funds, from the operator for the traditional payment network, for the transaction.

14. The method of claim 13, wherein the compensation received for the transaction differs from the dollar amount for the purchase by a discount rate, the discount rate having been determined based on the surrogate number.

15. The method of claim 14, wherein the discount rate comprises one or more of a percentage rate of the purchase and a per transaction fee.

16. The method of claim 13, further comprising:

receiving a consolidated report from the operator of the traditional payment network, the report comprising at least one summary of transactions made through the traditional payment mechanism, and at least one summary of transactions made through the non-traditional payment mechanism.

17. A method for resolving a dispute between a payer and a merchant regarding a transaction over a non-traditional payment mechanism, the method comprising:

electronically receiving, from an operator of the non-traditional payment mechanism, instructions to debit the merchant for the transaction, the instructions comprising indicia for the payer and the non-traditional payment network, and transaction details;

retrieving from a mapping database, using the indicia and transaction details, a surrogate number for the transaction, the surrogate number having been previously associated with the transaction and the indicia, and the surrogate number being a payment number for use on a traditional payment network; and

submitting a debit or credit for the merchant to the operator of the traditional payment network, using the surrogate number, in an amount corresponding to the transaction.

18. The method of claim 17 further comprising:

electronically receiving, from the operator of the non-traditional payment mechanism, an indication that the dispute has been resolved in favor of the merchant; and

electronically transmitting, to the operator of the traditional payment network, a settlement file including instructions to credit the merchant in the amount corresponding to the transaction.

19. The method of claim 18 wherein the resolution of the dispute is performed according to a set of dispute resolution rules promulgated by the operator of the non-traditional payment mechanism.

20. A method of settling payment for a plurality of transactions performed at a merchant through an electronic financial processing network, a subset of the plurality of transactions being associated with a traditional payment mechanism and a subset of the plurality of transactions being associated with a non-traditional payment mechanism, the method comprising:

electronically receiving, from the merchant, either directly or indirectly, a settlement file comprising the plurality of transactions at the merchant, each of the plurality of transactions associated with a traditional payment number;

identifying the subset from the plurality of transactions that are associated with the non-traditional payment mechanism;

transmitting, to a processor of the non-traditional payment mechanism, the settlement file comprising information for the identified subset of transactions;

receiving through an electronic transfer a first amount of funds from an operator of the non-traditional payment mechanism, in accordance with the settlement file; and

electronically transmitting a second amount of funds to the merchant.

21. The method of claim 20, further comprising determining an amount of fees to be paid to and collected from an operator of the non-traditional payment mechanism.

22. The method of claim 21, wherein the fees to be paid to the operator of the non-traditional payment mechanism comprises additional fees payable to an operator of the first traditional payment network.

23. The method of claim 21, wherein the first and second amount of funds differ by the amount of determined fees.

24. A method of reporting on financial transactions involving a merchant over an electronic financial processing network using a first non-traditional payment mechanism comprising:

electronically receiving, from the merchant, an electronic settlement file comprising information on at least one transaction made at the merchant using the first non-traditional payment mechanism, and at least one transaction made at the merchant using a traditional payment mechanism, the information for all transactions containing account numbers of a type used by the traditional payment mechanism;

determining a first subset of transactions from the settlement file, each transaction in the first subset made using the first non-traditional payment mechanism;

determining a second subset of transactions, from the settlement file, made using the traditional payment mechanism;

electronically assembling information pertaining to the first subset in a first section of a report;

electronically assembling information pertaining to the second subset in a second section of the report; and

electronically transmitting the report to the merchant.

25. The method of claim 24 wherein the assembled information for each subset includes interchange fees corresponding to transactions in the subset.

26. The method of claim 24 wherein the report comprises a total amount the merchant is to be compensated, including amounts the merchant is to be compensated for the combined first subset and second subset.

27. The method of claim 24, wherein determining the first subset comprises comparing portions of the account numbers for the transactions in the settlement file to corresponding portions of account numbers in a table of non-traditional payment mechanisms.

28. The method of claim 24, further comprising:

determining a third subset of transactions, from the settlement file, each transaction in the third subset made using a second non-traditional payment mechanism; and

electronically assembling information pertaining to the third subset in a third section of the report.

29. A system for processing a financial transaction between a payer and a merchant using a traditional payment mechanism and a non-traditional payment mechanism, comprising:

an input device controlled by the merchant for inputting indicia for the payer, the transaction and the non-traditional payment mechanism;

a non-traditional payment routing processor, in connection over an electronic financial transaction network with the input device, for determining that the transaction is to be performed in part through the non-traditional payment mechanism;

a non-traditional payment numbering system for associating a traditional payment number with the transaction, the non-traditional payment numbering system comprising;

a first database comprising traditional payment numbers available for association with the transaction;

a number association engine for determining one of the available traditional payment numbers from the first database to associate with the transaction based upon stored determination criteria; and

a mapping database for storing information related to the association between the transaction and the traditional payment number;

a pricing database for storing pricing information corresponding to the traditional payment number; and

a pricing engine for determining a price to charge for the transaction based upon stored information in the pricing database.

30. The system of claim 29 further comprising a non-traditional payment processing system, in connection with the mapping database, for determining from transaction information an associated non-traditional payment account and for transmitting the transaction information to a manager for the determined non-traditional payment account.