Instant availability of electronically transferred funds

• US 7,191,151 B1
• Filed: 08/23/2001
• Issued: 03/13/2007
• Est. Priority Date: 08/23/2001
• Status: Active Grant

• Current Assignee: PayPal, Inc. (PayPal Holdings, Inc.)
• Original Assignee: PayPal, Inc. (PayPal Holdings, Inc.)
• Inventors: Nosek, Luke Paul
• Primary Examiner(s): Chilcot, Jr.; Richard E.
• Assistant Examiner(s): Liversedge; Jennifer L.
• Application Number:
  US09/938,224
• Time in Patent Office: 2,028 Days
• Field of Search: 705/39, 705/44
• US Class Current: 705/39
• CPC Class Codes: G06Q 20/023 the neutral party being a clearing house
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/40 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 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03

Abstract

A system and method for making proceeds of an ACH (Automated Clearing House) transaction available to a user before the transaction is completed. The system may be part of an on-line or traditional merchant or system configured to allow or facilitate payments or fund transfers from users. When a user requests payment or transfer of funds to an entity (e.g., another user, a merchant, the user'"'"'s account with the system) via an ACH entry, the system authorizes the amount against a credit source of the user or otherwise verifies that the user has sufficient credit to cover the payment/transfer. If the authorization succeeds, the system places a hold on the credit source in the amount of the transaction. The ACH entry is then initiated and the desired funds are released. If the ACH transaction is rejected or returned, the user'"'"'s credit source is charged.

Claims

1. A method of accepting an ACH (Automated Clearing House) entry as a source of funds for a financial transaction, wherein the funds may be made available before the ACH entry is completed, the method comprising:

receiving a request from a first entity to conduct a transaction involving a first value;

authorizing said first value against a credit source associated with said first entity;

initiating an ACH entry in the amount of said first value; and

if said ACH entry is rejected, charging all or a portion of said first value against said credit source.

2. The method of claim 1, wherein said ACH entry is an ACH debit entry.

3. The method of claim 1, further comprising holding said first value against said credit source if said authorizing is successful.

4. The method of claim 3, further comprising releasing said hold if said ACH entry clears.

5. The method of claim 1, wherein said request is received by a facilitating organization, and wherein said request includes:

said first value;

an identifier of an entity that is to receive said first value; and

an option indicating that said first value is to be retrieved from an account associated with said first entity at an institution other than said facilitating organization.

6. The method of claim 5, wherein said option indicates that said first value is to be retrieved from said account via an ACH debit.

7. The method of claim 5, wherein said option is a default option in a set of options selectable by said first entity.

8. The method of claim 1, further comprising verifying that said first entity is associated with an account to which said ACH entry is targeted.

9. The method of claim 1, further comprising verifying that said first entity is associated with said credit source.

10. The method of claim 1, further comprising establishing said credit source for said first entity.

11. The method of claim 1, wherein said ACH entry is an ACH credit entry.

12. The method of claim 11, wherein said credit source is an account with a facilitating organization that receives said request from said first entity.

13. The method of claim 1, further comprising awarding said first entity a bonus if said ACH entry clears.

14. The method of claim 1, wherein said ACH entry is initiated against a source of funds different from said credit source.

15. A computer readable storage medium storing instructions that, when executed by a computer, cause the computer to perform a method of accepting an ACH (Automated Clearing House) entry as a source of funds for a financial transaction, wherein the funds may be made available before the ACH entry is completed, the method comprising:

receiving a request from a first entity to conduct a transaction involving a first value;

authorizing said first value against a credit source associated with said first entity;

initiating an ACH entry in the amount of said first value; and

if said ACH entry is rejected, charging all or a portion of said first value against said credit source.

16. A method of releasing value for a value transfer, where the value is to be provided via an ACH (Automated Clearing House) debit, before the ACH debit is completed, comprising:

receiving a value transfer request at a facilitating organization from a first entity, wherein said value transfer comprises the transfer of a first value to a second entity;

verifying a credit source available to said first entity;

authorizing said first value against said credit source;

holding said first value against said credit source;

initiating an ACH debit entry to retrieve said first value from a first account associated with said first entity at an institution other than said facilitating organization;

releasing said first value to said second entity before said ACH debit entry is completed or fails; and

if said ACH debit entry fails, charging a portion of said first value against said credit source.

17. The method of claim 16, wherein said value transfer request includes a selection of said first entity to provide said first value to said facilitating organization via ACH debit.

18. The method of claim 17, wherein said selection to provide said first value via ACH debit is a default option for value transfer requests accepted by said facilitating organization.

19. The method of claim 16, wherein said verifying a credit source comprises authorizing a small value against said credit source.

20. The method of claim 16, wherein said verifying a credit source comprises establishing said credit source for said first entity.

21. The method of claim 16, wherein said value transfer comprises the transfer of said first value from said first account to a second account associated with said second entity at said facilitating organization.

22. The method of claim 16, wherein:

said second entity comprises said first entity; and

said value transfer comprises the transfer of said first value from said first account to a second account associated with said first entity at said facilitating organization.

23. The method of claim 16, further comprising awarding said first entity a bonus if said ACH debit entry clears.

24. The method of claim 16, wherein said first account is different from said credit source.

25. A computer readable storage medium storing instructions that, when executed by a computer, cause the computer to perform a method of releasing value for a value transfer, where the value is to be provided via an ACH (Automated Clearing House) debit, before the ACH debit is completed, the method comprising:

receiving a value transfer request at a facilitating organization from a first entity, wherein said value transfer comprises the transfer of a first value to a second entity;

verifying a credit source available to said first entity;

authorizing said first value against said credit source;

holding said first value against said credit source;

initiating an ACH debit entry to retrieve said first value from a first account associated with said first entity at an institution other than said facilitating organization;

releasing said first value to said second entity before said ACH debit entry is completed or fails; and

if said ACH debit entry fails, charging a portion of said first value against said credit source.

26. A method of accepting an ACH debit as a source of funds for a fund transfer, wherein the funds may be made available before the ACH debit is completed, the method comprising:

receiving a request from a first entity to transfer a first amount of funds;

charging said first amount to a credit source associated with said first entity;

initiating an ACH debit in said first amount against a source of funds other than said credit source;

releasing said first amount for said requested transfer before said ACH debit is completed or fails; and

if said ACH debit completes successfully, crediting said first amount to said credit source.

27. A system for facilitating a transfer of value to a recipient from a user'"'"'s bank account, wherein the value may be transferred before it is received from the bank account, the system comprising:

a database configured to store financial data for a user, said financial data including;

an identifier of an external user account at a financial institution; and

an identifier of a credit source available to the user, wherein said credit source is different from said external account;

a request module configured to receive a request from the user to pay a first value to a recipient, wherein said first value is to be retrieved from said external account;

an ACH (Automated Clearing House) module configured to initiate an ACH debit transaction to retrieve said first value from said external account;

a credit module configured to perform one or more of the following;

authorize said first value against said credit source;

hold said first value against said credit source; and

charge said first value to said credit source; and

a transfer module configured to release said first value to said recipient before said first value is received from said external account;

wherein all or a portion of said first value is charged to said credit source if said ACH debit transaction is other than successful.