Transaction approval system

• US 5,177,342 A
• Filed: 11/09/1990
• Issued: 01/05/1993
• Est. Priority Date: 11/09/1990
• Status: Expired due to Term

• Current Assignee: Visa International Service Association (Visa, Inc.)
• Original Assignee: Visa International Service Association (Visa, Inc.)
• Inventors: Adams, Carl A.
• Primary Examiner(s): Shepperd, John W.
• Application Number:
  US07/611,933
• Time in Patent Office: 788 Days
• Field of Search: 235/379, 235/380, 340/825.34, 340/825.33
• US Class Current: 235/379
• CPC Class Codes: G06Q 20/403 Solvency checks
• CPC Class Codes: G06Q 20/4037 Remote solvency checks
• CPC Class Codes: G07F 7/08 by coded identity card or credit card or other personal identification means without personal verification means G07F7/02

Abstract

A transaction approval system (10) is disclosed which includes various enhancements to existing systems. For example, the transaction limit (30) stored in the terminal can by dynamically adjusted to vary the level of risk at the terminal to be closer to the desired level of risk. The terminal will also generate and store a list of account numbers (44,46) which might be invalid and should provode an on-line request for authorization.

Claims

1. A system for authorizing transactions comprising:

terminal means including a storage means, said terminal means functioning to authorize certain of said transactions based on criteria maintained in said storage means, said criteria including a transaction limit which is compared to the transaction amount by said terminal means, and said storage means further maintaining a record of the transactions handled by said terminal means;

means associated with said terminal means for periodically transmitting and receiving information including said transaction records; and

central processor means located remote from said terminal means for receiving and analyzing said transaction records and calculating a level of risk associated with said transaction records, said level of risk calculated over two time intervals of differing length to determine if the transaction limit should be changed; and

if said level of risk varies from a desired level of risk, supplying said terminal means with different criteria based on a new transaction limit for authorizing transactions, said different criteria being selected to adjust the level of risk to be closer to the desired level of risk.

2. A system as recited in claim 1 wherein said level of risk is calculated by comparing the transaction records with information about accounts associated with the transactions.

3. A transaction terminal for use in an network for authorizing transactions based on the use of transactions cards, each transaction card having an account number, said network including a central processor, said transaction terminal comprising:

storage means, said storage means including criteria for authorizing transactions and a list of account numbers of transaction cards; and

processor means functioning to authorize certain of said transactions based on said criteria, said criteria including a comparison of the account number of the card presented for the transaction to said list of stored account numbers, said processor means further functioning to request authorization information from the central processor for the remaining transactions which have not been authorized by the processor means, and if any such request for authorization is declined by the central processor, said processor means further functions to add the account number of the transaction card presented for that transaction to said list in said storage means so that a subsequent use of that transaction card at the terminal will result in a request for authorization information from the central processor even if the remainder of said criteria are met.

4. A transaction terminal as recited in claim 3 wherein said criteria for authorizing the transaction further includes a transaction limit which is compared to the transaction amount by said processor means.

5. A transaction terminal as recited in claim 3 wherein the maximum number of cards which can exist in the list is fixed and when that limit is reached, the earliest temporal entry to that list is deleted to provide room for the most current temporal entry.

6. A transaction terminal for use in an network for authorizing transactions based on the use of transactions cards, each transaction card having an account number, said network including a central processor, said transaction terminal comprising:

storage means for maintaining a transaction limit and a list of account numbers of transaction cards; and

processor means functioning to authorize certain of said transactions by comparing the account number of the card presented for the transaction to said list of stored account numbers as well as comparing the amount of the transaction to the transaction limit, said processor means further functioning to request authorization information from the central processor for the remaining transactions which have not been authorized by the processor means, said processor means further functioning to add the account number of the transaction card presented for that transaction to said list in said storage means only if said processor means authorized said transaction, so that a subsequent use of that transaction card at that terminal will result in a request for authorization information from said central processor even if the remainder of said criteria are met.

7. A transaction terminal as recited in claim 6 wherein the maximum number of cards which can exist in the list is fixed and when that limit is reached, the earliest temporal entry to that list is deleted to provide room for the most current temporal entry.

8. A method for adjusting the transaction limit in terminal, comprising the steps of:

analyzing the records of transactions which have occurred at the terminal to determine a level of risk associated therewith, said level of risk calculated over two time intervals of different length; and

if said level of risk varies from a desired level of risk, changing the transaction limit in the terminal to adjust the level of risk to be closer to the desired level of risk.

9. A method as recited in claim 8 wherein the level of risk is calculated by comparing the transaction records with information about accounts associated with the transactions.

10. A method as recited in claim 8 further including the step of transmitting the transactions records to a central processor for analysis.

11. A method as recited in claim 10 wherein the central processor transmits a new transaction limit to the terminal.

12. A method of operating a transaction terminal for use in an network for authorizing transactions based on the use of transactions cards, each transaction card having an account number, said network including a central processor, and wherein a list of account numbers of transaction cards are stored in the terminal along with criteria for approving a transaction, said criteria including a comparison of the account number of the card presented for the transaction to the list of stored account numbers, said method comprising the steps of:

requesting authorization information from the central processor for transactions which do not meet the stored criteria, and if any such request for authorization is declined by the central processor;

adding the account number of the transaction card presented for that transaction to the list in the terminal so that a subsequent use of that transaction card at the terminal will result in a request for authorization information from the central processor even if the remainder of said criteria are met.

13. A method as recited in claim 12 wherein the criteria for authorizing the transaction further includes a transaction limit which is compared to the transaction amount by the terminal.