System and method for authorizing electronic funds transfer at a point of sale

• US 6,243,689 B1
• Filed: 12/29/1998
• Issued: 06/05/2001
• Est. Priority Date: 12/29/1998
• Status: Expired due to Fees

• Current Assignee: Robert G. Norton
• Original Assignee: Robert G. Norton
• Inventors: Norton, Robert G.
• Primary Examiner(s): Millin, Vincent
• Assistant Examiner(s): THOMPSON JR, FOREST
• Application Number:
  US09/222,060
• Time in Patent Office: 889 Days
• Field of Search: 705/18
• US Class Current: 705/18
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/042 characterized in that the payment protocol involves at least one cheque
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems

Abstract

A system and method for a payee to initiate at a point of sale an electronic funds transfer from an account of a payor to the account of the payee, comprising the steps of: obtaining from the payor the duplicate part of a completed two-part draft instrument comprising an original and a duplicate and having account identifying information printed thereon in machine-readable form, the original being configured for use as a conventional draft instrument, and the duplicate being configured for selective use as either a duplicate of the original, or as the originating document for an electronic funds transfer, said duplicate part of the draft instrument being completed by the payor to authorize the payee to present the check electronically so as to initiate an electronic funds transfer for the face amount of the instrument; scanning the instrument to electronically read the account identifying information; presenting the instrument electronically through an electronic clearing house network so as to initiate at the point of sale an electronic funds transfer from the payor to the payee; keeping the duplicate part of the instrument as the payee'"'"'s record of the electronic funds transfer authorization; allowing the payor to keep the original part of the instrument as a record of the electronic funds transfer authorization. Also a two-part draft instrument form comprising: a first part configured for use as a conventional paper draft instrument; and a second part configured for being a duplicate of the first part, and also configured for separate selective use as the originating document for an electronic funds transfer.

Claims

1. A method for a payee to initiate at a point of sale an electronic funds transfer from a funds account of a payor to a funds account of a payee, comprising the steps of:

(a) obtaining from the payor a completed two-part draft instrument, comprising an original and a duplicate, the original being configured for use as a conventional check, and the duplicate being configured for selective use as either a duplicate of the original, or as an originating document for an electronic funds transfer for the face amount of the draft instrument, the payor completing the draft instrument by making a single mark on the original which completes a single selectable indication common to both the original and the duplicate designating whether the draft instrument is to be used to authorize an electronic funds transfer;

(b) presenting the draft instrument electronically through an electronic clearing house network so as to initiate an electronic funds transfer from the funds of the payor to the funds of the payee in the amount of the draft instrument;

(c) keeping the duplicate of the draft instrument as a payee'"'"'s record of the electronic funds transfer authorization; and

(d) allowing the payor to keep the original of the draft instrument as a record of the electronic funds transfer authorization.

2. The method of claim 1, wherein the step of presenting the draft instrument electronically through an electronic clearing house network comprises the additional steps of:

(e) reading a machine-readable account identifying designation from the face of the draft instrument by means of magnetic ink character recognition equipment at the point of sale, so as to create an electronic request record, said account identifying designation identifying the institution which holds the payor'"'"'s funds account and the account number thereof;

(f) modifying said electronic request record to include the amount of the draft instrument;

(g) electronically transmitting said electronic request record to an originating depository financial institution for routing through an electronic clearing house network so as to initiate an electronic funds transfer from the funds of the payor to the funds of the payee in the amount of the draft instrument.

3. The method of claim 2, further comprising the step of presenting the draft instrument electronically through the Automated Clearing House network of the Federal Reserve System.

4. The method of claim 1, further comprising the steps of:

(h) scanning a biometric identification code provided on the face of the draft instrument in machine readable form, said code containing an electronic record of a biometric feature of the authorized maker of draft instruments from said account;

(i) scanning a biometric feature of the payor at the point of sale to create an electronic record of the payor'"'"'s biometric feature;

(j) comparing the electronic record of the authorized maker'"'"'s biometric feature with the electronic record of the payor'"'"'s biometric feature so as to allow the payee to determine whether the payor is an authorized maker of draft instruments from said account.

5. The method of claim 2, further comprising the steps of:

(k) scanning a biometric feature of the payor at the point of sale to create an electronic record of the payor'"'"'s biometric feature;

(l) electronically transmitting said account identifying designation and said electronic record of the payor'"'"'s biometric feature to a processor and database containing a record of the corresponding biometric feature of an authorized maker of drafts on said account for determining whether the payor'"'"'s biometric feature matches that of an authorized maker; and

(m) receiving from said processor and database an electronic transmission for creating a discernable signal at the point of sale indicating whether the payor'"'"'s biometric feature matches that of an authorized maker before the payee electronically transmits said electronic request record to an originating depository financial institution so as to initiate an electronic funds transfer.

6. The method of claim 2, further comprising the steps of:

(n) electronically transmitting said account identifying designation to a check guarantee/verification service provider; and

(o) receiving from said check guarantee/verification service provider an electronic transmission for creating a discernable indication advising the payee whether to accept the draft instrument before the payee electronically transmits said electronic request record to an originating depository financial institution so as to initiate an electronic funds transfer.

7. The method of claim 1, wherein the step of presenting the draft instrument electronically through an electronic clearing house network comprises the additional steps of:

(p) reading a machine-readable account identifying designation from the face of the draft instrument by means of magnetic ink character recognition equipment at the point of sale, so as to create an electronic request record, said account identifying designation identifying the institution which holds the payor'"'"'s funds account and the account number thereof;

(q) scanning a biometric feature of the payor at the point of sale to create an electronic record of the payor'"'"'s biometric feature;

(r) electronically transmitting said account identifying designation and said electronic record of the payor'"'"'s biometric feature to a processor and database containing a record of the corresponding biometric feature of an authorized maker of drafts on said account, for determining whether the payor'"'"'s biometric feature matches that of an authorized maker;

(s) receiving from said processor and database an electronic transmission for creating a discernable signal at the point of sale indicating whether the payor'"'"'s biometric feature matches that of an authorized maker;

(t) electronically transmitting said account identifying designation to a check guarantee/verification service provider;

(u) receiving from said check guarantee/verification service provider an electronic transmission for creating a discernable indication advising the payee whether to accept the draft instrument;

(v) modifying said electronic request record to include the amount of the draft instrument; and

(w) electronically transmitting said electronic request record to an originating depository financial institution for routing through the Automated Clearing House network of the Federal Reserve System so as to initiate an electronic funds transfer from the funds of the payor to the funds of the payee in the amount of the draft instrument.

8. A system for authorizing an electronic funds transfer from a payor to a payee at a point of sale, comprising:

a two-part draft instrument comprising an original and a duplicate, the original being configured for use as a conventional check, and the duplicate being configured for use as a duplicate of the draft instrument and as the originating document for an electronic funds transfer, the original and duplicate further including a single selectable indication common to both the original and the duplicate, configured for designating by a single common mark whether the draft instrument is to be used to authorize an electronic funds transfer;

an account identifying designation printed on the original and on the duplicate of the two-part draft instrument in machine readable form, said account identifying designation identifying the financial institution holding the payor'"'"'s account and identifying the payor'"'"'s funds account at the payor financial institution;

means for electronically reading the account identifying designation from the draft instrument upon presentment by the payor; and

means for electronically presenting the draft instrument through an automated clearing house network, so as to initiate an electronic funds transfer at the point of sale;

means for keeping and storing the duplicate of the draft instrument as a payee'"'"'s record of the electronic funds transfer authorization.

9. The system as described in claim 8, further comprising:

means for electronically transmitting said account identifying designation to a check guarantee/verification service provider;

means for receiving from said check guarantee/verification service provider an electronic transmission for creating a discernable indication advising the payee whether to accept the instrument before the payee electronically presents the draft instrument.

10. The system as described in claim 8, further comprising:

a biometric identification code printed on the original and on the duplicate of the two-part draft instrument in machine readable form, said code containing an electronic record of a biometric feature of the authorized maker of draft instruments from said account;

means for scanning a biometric feature of the payor at the point of sale to create an electronic record of the payor'"'"'s biometric feature;

means for comparing the electronic record of a biometric feature of the authorized maker with the electronic record of the payor'"'"'s biometric feature to determine whether the payee'"'"'s biometric feature matches that of an authorized maker before the payee electronically presents the draft instrument.

11. The system as described in claim 8, further comprising:

means for scanning a biometric feature of the payor at the point of sale to create an electronic record of the payor'"'"'s biometric feature;

means for electronically transmitting said account identifying designation and said electronic record of the payor'"'"'s biometric feature to a processor and database containing a record of the corresponding biometric feature of an authorized maker of drafts on said account, for determining whether the payor'"'"'s biometric feature matches that of an authorized maker;

means for receiving from said processor and database an electronic transmission for creating a discernable signal at the point of sale indicating whether the payor'"'"'s biometric feature matches that of an authorized maker before the payee electronically presents the draft instrument.

12. The system as described in claim 8, further comprising:

means for creating an electronic request record including the account identifying designation and the amount of the draft instrument; and

means for electronically presenting the draft instrument by sending the request record through the Automated Clearing House network of the Federal Reserve System to initiate an electronic transfer of funds from the payor'"'"'s account to the payee'"'"'s account at the payee'"'"'s financial institution.

13. The system as described in claim 8, further comprising:

means for electronically transmitting said account identifying designation to a check guarantee/verification service provider;

means for receiving from said check guarantee/verification service provider an electronic transmission for creating a discernable indication advising the payee whether to accept the draft instrument before the payee electronically presents the draft instrument;

means for creating an electronic request record including the account identifying designation and the amount of the draft instrument; and

means for electronically presenting the draft instrument by sending the request record through the Automated Clearing House network of the Federal Reserve System to initiate an electronic transfer of funds from the payor'"'"'s account to the payee'"'"'s account at the payee'"'"'s financial institution.

14. The system as described in claim 8, further comprising:

means for scanning a biometric feature of the payor at the point of sale to create an electronic record of the payor'"'"'s biometric feature;

means for electronically transmitting said account identifying designation and said electronic record of the payor'"'"'s biometric feature to a processor and database containing a record of the corresponding biometric feature of an authorized maker of drafts on said account, for determining whether the payor'"'"'s biometric feature matches that of an authorized maker;

means for receiving from said processor and database an electronic transmission for creating a discernable signal at the point of sale indicating whether the payor'"'"'s biometric feature matches that of an authorized maker before the payee electronically presents the draft instrument;

means for creating an electronic request record including the account identifying designation and the amount of the draft instrument; and

means for electronically presenting the draft instrument by sending the request record through the Automated Clearing House network of the Federal Reserve System to initiate an electronic transfer of funds from the payor'"'"'s account to the payee'"'"'s account at the payee'"'"'s financial institution.

15. The system as described in claim 8, further comprising:

means for electronically transmitting said account identifying designation to a check guarantee/verification service provider;

means for receiving from said check guarantee/verification service provider an electronic transmission for creating a discernable indication advising the payee whether to accept the draft instrument before the payee electronically presents the draft instrument;

means for scanning a biometric feature of the payor at the point of sale to create an electronic record of the payor'"'"'s biometric feature;

means for electronically transmitting said account identifying designation and said electronic record of the payor'"'"'s biometric feature to a processor and database containing a record of the corresponding biometric feature of an authorized maker of drafts on said account, for determining whether the payor'"'"'s biometric feature matches that of an authorized maker;

means for receiving from said processor and database an electronic transmission for creating a discernable signal at the point of sale indicating whether the payor'"'"'s biometric feature matches that of an authorized maker before the payee electronically presents the draft instrument;

means for creating an electronic request record including the account identifying designation and the amount of the draft instrument; and

means for electronically presenting the draft instrument by sending the request record through the Automated Clearing House network of the Federal Reserve System to initiate an electronic transfer of funds from the payor'"'"'s account to the payee'"'"'s account at the payee'"'"'s financial institution.

16. A two-part draft instrument form for use to negotiate funds from a funds account of a payor to a funds account of a payee, comprising:

a first part configured for use as a conventional paper check; and

a second part configured for being a duplicate of the first part and also configured for separate use as the originating document authorizing an electronic funds transfer;

the first part and second part further including a single selectable indication common to both the first part and the second part, configured for designating by a single common mark whether the first part is to be used as a check, or the second part is to be used to authorize an electronic funds transfer.

17. The two-part draft instrument as described in claim 16, further comprising an account identifying designation printed on the first part and on the second part in machine readable form, said account identifying designation identifying the financial institution holding the payor'"'"'s account and identifying the payor'"'"'s funds account at the payor financial institution.

18. The invention as described in claim 17 wherein said account identifying designation is printed in magnetic ink that is computer recognizable to allow it to be machine read.

19. The two-part draft instrument as described in claim 16 further comprising a biometric identification code printed on the first part and on the second part in machine readable form, whereby the payee may obtain information that will allow verification of the identity of the payor at the point of sale before the payee accepts the draft instrument.