Electronic check presentment system having transaction level reconciliation capability

• US 5,783,808 A
• Filed: 01/11/1996
• Issued: 07/21/1998
• Est. Priority Date: 01/11/1996
• Status: Expired due to Term

• Current Assignee: Carreker Corp. (Fiserv Incorporated)
• Original Assignee: JD Carreker and Associates Incorporated
• Inventors: Josephson, Stanley M.
• Primary Examiner(s): Evans, F. L.
• Application Number:
  US08/584,890
• Time in Patent Office: 922 Days
• Field of Search: 235/379, 395/245
• US Class Current: 235/379
• CPC Class Codes: G06Q 20/02 involving a neutral party, e.g. certification authority, notary or trusted third party [TTP]
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/0425 the cheque being electronic only
• CPC Class Codes: G06Q 20/14 specially adapted for billing systems
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: H04L 69/329 in the application layer [OSI layer 7]
• CPC Class Codes: H04L 9/40 Network security protocols

Abstract

Disclosed are an improved electronic check presentment ("ECP") system having a non-ECP exceptions notification system incorporated therein and a method of electronically communicating data pertaining to non-ECP exceptions. The method, for use by a presenting bank and a payor bank having check presentment systems between which data related to checks may be electronically transmitted, comprises the steps of: (1) electronically transmitting, from the presenting bank to the payor bank, predetermined presentment information relating to the checks and permitting a determination by the payor bank as to which of the checks are properly payable by the payor bank, (2) comparing records of an exceptions file with records of a receive control file, the exceptions file capable of containing records subject to both ECP and non-ECP exceptions to thereby produce an electronic file of the which of the checks are properly payable by the payor bank and (3) electronically transmitting the electronic file to the presenting bank to thereby provide advance electronic return notification of both ECP and non-ECP exceptions to checks presented by the presenting bank to the payor bank.

Claims

1. For use by a presenting bank and a payor bank having transaction presentment systems between which transaction-related data may be electronically transmitted, an accelerated method of clearing transactions drawn on the payor bank and received by the presenting bank for payment, said method comprising the steps of:

electronically transmitting, from the presenting bank to the payor bank, predetermined presentment information relating to the transactions and permitting a determination by the payor bank as to which of the transactions are properly payable by the payor bank;

reconciling, on a transaction-level basis at the payor bank, from the electronic presentment information received thereby and a non-MICR input file, which of the transactions are properly payable to allow the payor bank to detect potential fraud conditions; and

electronically transmitting, from the payor bank to the presenting bank, a return notification listing of at least potentially returnable ones of the transactions.

2. The method of claim 1 further comprising the step of appending to the electronically transmitted presentment information a return notification eligibility flag to indicate whether a particular transaction, information about which forms a part of the presentment information, is eligible for a return notification, said appending step being carried out prior to said transmitting step.

3. The method of claim 2 wherein the eligibility flag comprises an indication that a particular transaction is not eligible for a return notification.

4. The method of claim 2 wherein the eligibility flag comprises an indication that a particular transaction requires at least one preliminary return notification and a final return notification.

5. The method of claim 2 wherein the eligibility flag comprises an indication that a particular transaction requires only a final return notification.

6. The method of claim 1 wherein said return notification comprises both a preliminary return notification and a final return notification.

7. The method of claim 1 wherein said return notification comprises only a final return notification that is transmitted by the payor bank to the presenting bank after a final pay/no pay decision has been made by the payor bank.

8. A system for use by a payor bank for generating and transmitting presenting bank a return notification relating to a potential return transaction previously presented, by a presenting bank, to the payor bank for payment, said system comprising:

means for receiving an electronic cash letter from the presenting bank, said cash letter including information regarding transactions being presented for payment by the payor bank and usable by the payor bank to detect potential return transactions from said information;

means for reconciling said electronic cash letter on an transaction-level basis and detecting therefrom and from a non-MICR input file transactions that may potentially be return transactions to allow the payor bank to detect potential fraud conditions; and

means, responsive to the detection of potential return transactions, for electronically transmitting to the presenting bank a return notification.

9. The system of claim 8 wherein said electronic return notification comprises a preliminary notification of a potential return transaction that was generated following a DDA process performed by the payor bank but before a final pay/no pay decision by the payor bank.

10. The system of claim 8 wherein said electronic return notification comprises a final return notification generated by the payor bank following the payor bank making a pay/no pay decision.

11. The system of claim 8 wherein the electronic return notification comprises a confirmation notice that a particular transaction has been paid.

12. The system of claim 8 further comprising:

means for electronically returning a final return notification to the presenting bank, responsive to a final pay/no pay decision by a payor bank officer, said decision being made subsequent to said detection of transactions that may be potential return transactions and subsequent to an examination of said potential return transactions by the bank officer.

13. For use by a presenting bank and a plurality of payor banks, an electronic transaction presentment system facilitating rapid transaction processing communication between the presenting bank and the payor banks regarding payment of transactions drawn on the payor banks and received by the presenting bank for payment, said system comprising:

means, usable by the presenting bank, for capturing processing information from paper transactions received by the presenting bank for payment and drawn on the payor banks;

means for selectively extracting portions of the captured processing information grouped by payor bank;

means for incorporating the extracted processing information portions into electronic cash letters transmittable to the associated payor banks, each electronic cash letter containing transaction information usable by the receiving payor bank to permit it to make payment decisions relative to the transactions associated with the electronic cash letter;

means for electronically transmitting said cash letters from the presenting bank to the payor banks; and

means, usable by the payor banks, for receiving the electronic cash letters and, in response to receipt thereof and from a non-MICR input file, reconciling said electronic cash letters on an transaction-level basis and electronically transmitting to the presenting bank at least preliminary transaction payment decisions based on the electronic information received from the presenting bank.

14. The electronic transaction presentment system of claim 13 further comprising:

means for storing and maintaining electronic records relating to the transmission to and receipt by the payor bank of said electronic cash letters.

15. The electronic transaction presentment system of claim 14 further comprising:

means for reconciling transmitted electronic cash letters with complementary paper cash letters, wherein said reconciling is accomplished by the payor bank by comparing the electronic cash letters with the corresponding paper cash letters.

16. The electronic transaction presentment system of claim 15 wherein said means for reconciling transmitted electronic cash letters with complementary paper cash letters includes means for handling out-of-sequence transactions during reconciliation.

17. The electronic transaction presentment system of claim 16 further comprising:

means for electronically generating and storing discrepancies between said electronic cash letters and said complementary paper cash letters identified by the payor bank in response to said reconciliation means.

18. For use by a presenting bank and a plurality of payor banks, an improved electronic transaction presentment system facilitating accelerated, paperless transaction processing between the presenting bank and the payor banks with regard to payment of transactions drawn on the payor banks and received by the presenting bank for payment, said system comprising:

means, usable by a presenting bank, for receiving a series of paper transactions;

means, usable by a presenting bank, for extracting selected transaction information from said paper transactions;

means for electronically transmitting the extracted transaction information from the presenting bank to the payor bank on which the transactions corresponding to the extracted information are drawn;

means, usable by the payor banks, for receiving the transmitted extracted transaction information and, in response thereto and from a non-MICR input file, reconciling said extracted transaction information on an transaction-level basis and electronically transmitting to the presenting bank a return notification comprising further electronic transaction information as to those transactions identified by the payor bank as exceptions; and

means, usable by the presenting bank, for receiving the further electronic transaction information transmitted by the payor bank and utilizing it to correlate the further electronic transaction information with the paper transactions to which the further transaction information pertains.

19. For use by a presenting bank and a payor bank, an electronic transaction presentment system facilitating rapid processing of transactions drawn on the payor bank and received by the presenting bank for payment, said system comprising:

means, usable by the presenting bank, for capturing information from paper transactions presented for payment to the presenting bank and storing the captured information;

means for appending to the captured transaction information at least one disposition code providing, for use by the payor bank, instructions for handling transactions identified by the payor bank as potential return transactions;

means for electronically transmitting the encoded transaction information from the presenting bank to the payor bank; and

means, usable by the payor bank, for receiving the encoded transaction information and, in response to receipt thereof and from a non-MICR input file, reconciling said encoded transaction level information on an transaction-level basis and electronically transmitting to the presenting bank a return notification in conformance with the disposition code instructions.

20. The system of claim 19 wherein said disposition code comprises an instruction to the payor bank that no return notification is to be generated by the payor bank.

21. The system of claim 20 wherein said disposition code comprises an instruction to the payor bank that a return notification is to be generated by the payor bank only for transactions having amounts greater than a predetermined amount.

22. The system of claim 20 wherein said disposition code comprises an instruction to the payor bank that a return notification is to be generated by the payor bank for all transactions identified by the payor bank as not payable.

23. The system of claim 20 wherein said disposition code comprises an instruction to the payor bank to reclear transactions identified as not payable by the payor bank if the transaction amount is less than a predetermined amount.

24. The system of claim 20 wherein said disposition code comprises an instruction to the payor bank to reclear all transactions identified as not payable by the payor bank.

25. The system of claim 20 wherein said disposition code comprises an instruction to the payor bank to provide a return notification for all transactions paid by the payor bank.

26. The system of claim 20 wherein said disposition code comprises an instruction to the payor bank to provide multiple preliminary notifications to the presenting bank.

27. For use by a presenting bank and its downstream correspondent banks and a plurality of payor banks, an electronic transaction presentment system facilitating rapid processing of transactions drawn on the payor bank and received by the presenting bank for payment and facilitating the rapid transmission of disposition information to the presenting bank'"'"'s downstream correspondents, said system comprising:

means, usable by the presenting bank, for capturing information from paper transactions presented to the presenting bank by a downstream correspondent bank for collection and storing the captured transaction information;

means for electronically transmitting the captured transaction information from the presenting bank to the payor bank;

means, usable by the payor bank, for receiving the transaction information and, in response to receipt thereof and from a non-MICR input file, reconciling said transaction information on an transaction-level basis and electronically transmitting to the presenting bank a return notification; and

means, usable by the presenting bank, for receiving the electronically transmitted return notification and responsively thereto further transmitting the return notification to the downstream correspondent bank that previously presented to the presenting bank the transaction in relation to which the return notification was transmitted by the payor bank.

28. For use by a presenting bank and a payor bank, an electronic transaction presentment system for accelerated clearing of transactions drawn on the payor bank and received by the presenting bank for payment, and for providing to the presenting bank a return notification comprising transaction disposition information for transactions processed by the payor bank, said system comprising:

means, usable by the presenting bank, for capturing information from paper transactions presented for payment to the presenting bank and storing the captured information;

means for appending to the captured transaction information an eligibility code providing, for use by the payor bank, instructions for preparing return notifications for transmission to the presenting bank with regard to the transaction information processed by the payor bank;

means for electronically transmitting the encoded transaction information from the presenting bank to the payor bank; and

means, usable by the payor bank, for receiving the encoded transaction information and, in response to receipt thereof and from a non-MICR input file, reconciling said encoded transaction level information on an transaction-level basis and selectively electronically transmitting to the presenting bank a return notification in conformance with the eligibility code instructions.