Method and system for reduced cost debit processing

• US 6,847,947 B1
• Filed: 01/18/2000
• Issued: 01/25/2005
• Est. Priority Date: 01/18/2000
• Status: Expired due to Term

• Current Assignee: First Data Corporation (Fiserv Incorporated)
• Original Assignee: First Data Corporation (Fiserv Incorporated)
• Inventors: Kambour, David Gregg, Marczyk, Christopher, Myers, William Anthony
• Primary Examiner(s): WEISBERGER, RICHARD C
• Application Number:
  US09/484,958
• Time in Patent Office: 1,834 Days
• Field of Search: 235/379, 705/39
• US Class Current: 705/39
• 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 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03

Abstract

A method is provided for processing debit transactions at the lowest cost available. The method is comprised of the following steps: providing a merchant identification number and an account number BIN file to a debit processing center; matching the merchant identification number against at least one merchant database at the debit processing center; providing a merchant network list from the at least one merchant database based upon the match of the merchant identification number; providing a customer network list from the at least one merchant database based upon the match of customer identification number; creating a merchant-customer network list by matching at least one common element from the merchant network list and the customer network list. Next the system determines the validity for each common element of the merchant-customer network list and eliminates each invalid common element from the merchant-customer network list. Subsequently, the system sorts the elements of the merchant-customer network list based on network fee and communicates with a routing and processing database to determine the routing and processing method for each merchant customer element. Finally, the system applies the lowest cost element for routing and processing a debit transaction.

Claims

1. A method for processing debit transactions at the lowest cost available, the method comprising:

providing a merchant network list which corresponds to the merchant identification number, the merchant network list comprising debit networks available for access by the merchant;

providing a customer network list which corresponds to the customer account number, the customer network list comprising debit networks available for access by the customer account;

matching the debit networks of the merchant network list and the customer network list and generating a merchant-customer network list with the matched debit networks of the merchant network list and the customer network list;

communicating with a network information file and determining the validity for each debit network of the merchant-customer network list to process a debit transaction, each valid debit network of the merchant-customer network list having a cost for processing the debit transaction;

eliminating each invalid debit network from the merchant-customer network list;

sorting the valid debit networks of the merchant-customer network list as a function of the cost for processing the debit transaction;

communicating with a routing and processing database to determine a routing and processing method which corresponds to each debit network of the sorted merchant-customer network list; and

applying the first routing and processing method corresponding to the debit network of the sorted merchant-customer network list having the lowest cost to process the debit transaction and if the first routing and processing method is not available, applying the next ranked routing and processing method corresponding to the debit network of the sorted merchant-customer network list having the next lowest cost to process the debit transaction.

2. The method of claim 1 wherein:

the merchant identification number uniquely identifies a merchant.

3. The method of claim 1 wherein:

the merchant network list includes the debit network priority codes defined to represent a particular set of debit networks.

4. The method of claim 3 wherein:

the merchant network list includes a list of debit networks associated with the merchant network priority identifier provided by the merchant.

5. The method of claim 1 wherein:

the network information file includes information for each of the debit networks, the merchant network list including a network identifier record, a transaction type list record, and a fee record.

6. The method of claim 5 wherein:

the network identifier record is an identification number of a single debit network.

7. The method of claim 6 wherein:

the transaction type list record is a list of transaction types that the single debit network will accept.

8. The method of claim 6 wherein:

the fee record includes the fee that the single debit network charges for processing the debit transaction.

9. A system for processing an identified customer'"'"'s transaction at an identified merchant based on cost, the system comprising:

a processor for matching the identified merchant with a network priority file containing a list of debit networks and transaction types associated with the merchants;

a processor for generating a first list with the debit networks associated with the identified merchant which are valid for processing an identified customer'"'"'s transaction;

a processor for matching an identified customer with a bank identification file including a bank identification number for the identified customers and a list of debit networks for processing those account numbers for the identified customers;

a processor for populating a second list with the debit networks listed for the identified customer;

a processor for intersecting the first list with the second list to generate a merchant-customer network list having the common debit networks of the first and second lists, each debit network of the merchant-customer network list having a cost for processing the identified customer'"'"'s transaction;

a processor for sorting the debit networks of the merchant-customer network list as a function of the cost for processing the identified customer'"'"'s transaction; and

a processor for processing the identified customer'"'"'s transaction through the lowest cost available debit network of the merchant-customer network list.

10. The system of claim 9 further comprising:

a device for determining a pseudo-terminal number for each lower cost network listed in the sorted merchant-customer network list.

11. The system of claim 10 further comprising:

a processing device for populating a Generic Internal Message (GIM) list with at least some of the networks in the sorted merchant-customer network list qualifying as lower cost networks, said processing device processing the customer'"'"'s transaction through the next lowest cost network in the GIM list if the lowest cost network is unavailable.