SYSTEM AND METHOD FOR LINKED ACCOUNT HAVING SWEEP FEATURE

• US 20140344158A1
• Filed: 07/31/2014
• Published: 11/20/2014
• Est. Priority Date: 09/06/2000
• Status: Abandoned Application

• Current Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Original Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Inventors: Hirka, Jeffrey, Fox, Steven
• Application Number:
  US14/448,361
• Publication Number:
  US 20140344158A1
• Time in Patent Office: Days
• US Class Current: 705/44
• 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 20/102 Bill distribution or payments
• 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 20/40 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 20/403 Solvency checks
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• 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 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G07G 1/12 electronically operated digital data processing aspects G06Q20/00

Abstract

A computer-implemented method for facilitating electronic funds transactions is disclosed. According to one embodiment, the method may comprise the steps of: issuing a transaction card to a cardholder by associating the transaction card with a demand deposit account from which the cardholder is authorized to electronically disburse funds; receiving an authorization request for an attempted transaction between a merchant and the cardholder, the authorization request containing information associated with the transaction card and the attempted transaction; processing the authorization request based on one or more predetermined business rules; authorizing the transaction without immediately settling the transaction against the demand deposit account of the cardholder; and settling the transaction, at a time subsequent to the execution of the transaction, through automated clearing house (ACH) from funds retained within the demand deposit account of the cardholder.

Claims

1. A computer-implemented method for processing and settling payment transactions, the method comprising:

issuing a linked account instrument to a cardholder, the linked account instrument being associated with a cash account and a credit account providing overdraft protection to the cash account;

receiving, at an authorization server and via a payment network, an authorization request from a merchant system for a transaction initiated with the linked account instrument, the merchant system comprising a point-of-sale (POS) terminal or an Internet site;

processing, by the authorization server, the authorization request based on at least one business rule and/or financial rule;

providing, via the payment network, an instantaneous authorization decision to the merchant system to approve or deny the authorization request based on the step of processing;

settling a payment amount of the authorization request, if it is approved, with the merchant or the merchant'"'"'s sponsoring bank;

sweeping, at the end of a predetermined period of time, the cash account via an automated clearing house to determine whether adequate funds exist to cover the payment amount; and

if the cash account has adequate funds, withdrawing at least part of the payment amount from the cash account, or

if the cash account has insufficient funds, drawing from available credit on the credit account to cover some or all of the payment amount.

2. The computer-implemented method of claim 1, further comprising:

scheduling at least one subsequent sweep of the cash account if the cash account has insufficient funds.

3. The computer-implemented method of claim 1, further comprising:

suspending or limiting usage of the linked account instrument if the cash account has insufficient funds and conducting at least one subsequent sweep of the cash account.

4. The computer-implemented method of claim 3, wherein the usage of the linked account instrument is suspended or limited until the at least one subsequent sweep of the cash account collects sufficient funds to cover the payment amount.

5. The computer-implemented method of claim 1, further comprising:

performing a series of automatic sweeps of the cash account in search of adequate funds.

6. The computer-implemented method of claim 5, wherein each of the series of automatic sweeps is at the end of the predetermined period of time.

7. The computer-implemented method of claim 1, wherein the predetermined period of time is a day.

8. The computer-implemented method of claim 1, wherein the cash account is held at a financial institution that issues the linked account instrument.

9. The computer-implemented method of claim 1, wherein the cash account is held at a financial institution different from the one that issues the linked account instrument.

10. The computer-implemented method of claim 1, wherein the credit account is held at a financial institution that issues the linked account instrument.

11. The computer-implemented method of claim 1, wherein the credit account is held at a financial institution different from the one that issues the linked account instrument.

12. The computer-implemented method of claim 1, wherein the cash account is held at a financial institution where the credit account is held.

13. The computer-implemented method of claim 1, wherein the cash account is held at a financial institution different from the one where the credit account is held.

14. The computer-implemented method of claim 1, wherein the at least one business rule and/or financial rule causes the authorization request to be processed against an available balance of the cash account or a spending limit.

15. A computer-implemented method for processing and settling payment transactions, the method comprising:

issuing a linked account instrument to a cardholder, the linked account instrument being associated with a cash account and a credit account providing overdraft protection to the cash account;

receiving, via a payment network, an authorization request from a merchant system for a transaction initiated with the linked account instrument, the merchant system comprising a point-of-sale (POS) terminal or an Internet site;

processing, by at least one computer processor, the authorization request based on at least one business rule and/or financial rule, the processing further comprising;

if the cash account contains adequate funds to cover a payment amount of the authorization request, approving the authorization request and withdrawing the payment amount from the cash account,

if the cash account contains funds to cover a portion of the payment amount and the credit account has available credit to cover an overdraft amount, approving the authorization request, withdrawing said portion of the payment amount from the cash account, and charging the overdraft amount to the credit account, and

otherwise denying the authorization request; and

performing, at a time subsequent an approval of the authorization request, one or more automatic sweeps of the cash account in search of additional funds to cover the overdraft amount, if any, charged to the credit account.

16. A computer-implemented system for processing and settling payment transactions, the system comprising:

at least one database for storing electronic records of linked account instruments issued to cardholders, each of the linked account instruments being associated with at least one cash account and at least one a credit account providing overdraft protection to the at least one cash account;

an authorization server coupled to the least one database via at least one communication interface, the at least one authorization server being configured to perform at least the following;

receiving an authorization request from a merchant system for a transaction initiated with a linked account instrument which is associated with a cash account and a credit account providing overdraft protection to the cash account, the merchant system comprising a point-of-sale (POS) terminal or an Internet site;

processing the authorization request based on at least one business rule and/or financial rule;

providing an instantaneous authorization decision to the merchant system to approve or deny the authorization request based on the step of processing;

settling a payment amount of the authorization request, if it is approved, with the merchant or the merchant'"'"'s sponsoring bank;

sweeping, at the end of a predetermined period of time, the cash account via an automated clearing house to determine whether adequate funds exist to cover the payment amount; and

if the cash account has adequate funds, withdrawing at least part of the payment amount from the cash account, or

if the cash account has insufficient funds, drawing from available credit on the credit account to cover some or all of the payment amount.

17. A computer-implemented system for processing and settling payment transactions, the system comprising:

at least one storage medium for storing electronic records of linked account instruments issued to cardholders, each of the linked account instruments being associated with at least one cash account and at least one credit account providing overdraft protection to the at least one cash account;

at least one computer processor coupled to the least one storage medium via at least one communication interface, the at least one computer processor being configured to perform at least the following;

receiving an authorization request from a merchant system for a transaction initiated with a linked account instrument which is associated with a cash account and a credit account providing overdraft protection to the cash account, the merchant system comprising a point-of-sale (POS) terminal or an Internet site;

processing the authorization request based on at least one business rule and/or financial rule, the processing further comprising;

if the cash account contains adequate funds to cover a payment amount of the authorization request, approving the authorization request and withdrawing the payment amount from the cash account,

if the cash account contains funds to cover a portion of the payment amount and the credit account has available credit to cover an overdraft amount, approving the authorization request, withdrawing said portion of the payment amount from the cash account, and charging the overdraft amount to the credit account, and

otherwise denying the authorization request; and

performing, at a time subsequent an approval of the authorization request, one or more automatic sweeps of the cash account in search of additional funds to cover the overdraft amount, if any, charged to the credit account.