System and method for optimized funding of electronic transactions

• US 7,587,363 B2
• Filed: 06/20/2002
• Issued: 09/08/2009
• Est. Priority Date: 11/06/2000
• Status: Expired due to Term

• Current Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Original Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Inventors: Sheehan, Mark Robert, Cataline, Glen R., Rielly, William Smith, Wallace, William Scott
• Primary Examiner(s): Karmis; Stefanos
• Application Number:
  US10/175,031
• Publication Number:
  US 20030055783A1
• Time in Patent Office: 2,637 Days
• Field of Search: 705 38- 40, 705/42, 705/37, 705/14, 705/35, 382/137
• US Class Current: 705/40
• CPC Class Codes: G06Q 20/00 Payment architectures, schemes or protocols apparatus for performing or posting payment transactions G07F7/08, G07F19/00; electronic cash registers G07G1/12
• CPC Class Codes: G06Q 20/02 involving a neutral party, e.g. certification authority, notary or trusted third party [TTP]
• CPC Class Codes: G06Q 20/023 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 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 20/14 specially adapted for billing systems
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof

Abstract

The invention provides systems and methods for managing transactions. The system includes a data input portion that communicates first information regarding a payment request, as well as a decision reference data store for communicating second information regarding parameters for use in determining a payment option for the payment request. The system also includes a processor. The processor inputs the first information and the second information. Then, the processor selectably determines the payment option to direct a transmission of funds from at least one payment source to at least one payee account based on an optimization determination performed by the processor. The optimization determination may provide savings to the institution processing the transaction, or alternatively, may provide savings to the customer initiating the transaction, for example.

Claims

1. A system for managing a transmission of funds for a payment request initiator, comprising:

an input portion that inputs first information from a payment request initiator, the first information including payment source information and payee information, the first information constituting a payment request;

a payment platform database that includes payment platform data, the payment platform data including decision reference data store; and

a processor, the processor communicating with the input portion and the payment platform database so as to input the first information and access select payment platform data, the processor;

identifying a single payment source based on the payment source information, the single payment source being the source of funds for the transmission of funds;

identifying a payee account based on the payee information;

performing, after identifying the single payment source and the payee account, an optimization determination to determine a payment mechanism, out of a plurality of available payment mechanisms, to use to transfer the funds from the single payment source to the payee account, the processor using the first information and payment platform data in the optimization determination; and

effecting the transmission of funds from the single payment source to the payee account using the payment mechanism;

wherein the optimization determination includes using a matching algorithm to match the payee account with the payment mechanism;

wherein the matching algorithm assigns various weighting to the requested transaction based on at least one of address matching, account number matching and name matching, the various weighting then used by the processor as a factor, in determination of the payment mechanism;

wherein the processor further determining a credit amount associated with the payment request initiator who submits the first information, and using the credit amount in the optimization determination;

wherein the optimization determination includes using a scoring mechanism that provides a score, the score relating to credit amount, and wherein the processor selects one payment mechanism out of the plurality of available payment mechanisms based on the score accorded to the payment request initiator, the optimization determination further including the scoring mechanism being used to segregate customers into different tiers, such segregation into different tiers used to determine the credit amount to be given to the payment request initiator.

2. The system of claim 1, wherein the identifying a single payment source is performed using a further optimization determination, which is performed before the optimization determination to determine a payment mechanism;

and

the further optimization determination, performed by the processor, determining the single payment source from a plurality of available payment sources.

3. The system of claim 2, wherein the input portion is a computer of the payment request initiator, and the plurality of available payment sources are identified by the payment request initiator.

4. The system of claim 1, wherein in performing the optimization determination, the processor determines that a payment mechanism is exhausted.

5. The system of claim 1, wherein the optimization determination uses a collection of payment requests so as to determine the payment mechanism.

6. The system of claim 5, wherein the optimization determination using a collection of payment requests so as to determine the payment mechanism, includes the processor using quota based processing to determine if at least one quota is satisfied.

7. The system of claim 1, wherein the matching algorithm assigns various weighting to the requested transaction based on each of address matching, account number matching and name matching, the various weighting then used by the processor as a factor, in determination of the payment mechanism.

8. The system of claim 1, Wherein the optimization determination is based on the processor performing an assessment of credit to be given to the payment request initiator.

9. The system of claim 8, wherein the assessment of credit is performed using tiers so as to group payment request initiators, the assessment being performed daily.

10. The system of claim 1, wherein the payment platform data includes affiliation data affiliating the single payment source with a plurality of available payment mechanisms, each of which is respectively usable to transmit the funds from a payment source;

and

the optimization determination, performed by the processor, uses the affiliation data.

11. The system of claim 1, wherein the input portion is an input data store.

12. The system of claim 11, wherein the input portion is a financial payment datastore that stores parameters selected by a user.

13. The system of claim 1, wherein the input portion is an online bill pay datastore.

14. The system of claim 1, wherein the input portion is a user interface that interfaces with a human payment request initiator.

15. The system of claim 1, wherein the decision reference data store includes an affiliation datastore, and the processor obtains updates to information contained therein from at least one affiliation system of record.

16. The system of claim 1, wherein the decision reference data store includes a rules datastore, the rules datastore containing rules that are used by the processor in the optimization determination performed by the processor.

17. The system of claim 1, the processor further including an incoming translator, the incoming translator converting the first information to a form that is understandable by the processor.

18. The system of claim 17, the processor further including an outgoing translator, the outgoing translator converting standardized data generated from the optimization determination performed by the processor to data unique to the payment mechanism selected.

19. The system of claim 18, wherein the processor reconciles the first information with the data that is unique to the payment mechanism selected.

20. The system of claim 1, further including a reporting interface, the reporting interface interfacing with the decision reference datastore.

21. The system of claim 1, the processor further including an audit logging datastore, wherein the audit logging datastore collects data generated from the optimization determination performed by the processor.

22. The system of claim 1, wherein the processor determines an error situation in processing the first information and the payment platform data, the system further including an error logging datastore, the error logging datastore inputting and storing data regarding the error situation.

23. The system of claim 22, further including an exception handling processor, the exception handling processor performing further processing on the first information and the payment platform data for which the error situation is determined.

24. The system of claim 23, wherein the exception handling processor allows for manual intervention.

25. The system of claim 1, wherein the optimization determination performed by the processor provides an optimized situation for a financial institution.

26. The system of claim 1, wherein the optimization determination performed by the processor provides an optimized situation for the payment request initiator.

27. The system of claim 1, wherein the processor determines the available payment mechanisms, out of a set of payment mechanisms, the optimization determination being performed after a determining of the available payment mechanisms.

28. The system of claim 1, wherein the optimization determination performed by the processor includes determining whether a quota has been satisfied for at least one of the available payment mechanisms;

and

if the quota has been satisfied for a particular payment mechanism, then removing the particular payment mechanism from the plurality of available payment mechanisms; and

if the quota has not been satisfied for a particular payment mechanism, then retaining the particular payment mechanism in the plurality of available payment mechanisms.

29. The system of claim 1, wherein the processor is maintained by a first entity;

and

the first information for respective transactions is input by the processor, the first information for the respective transactions being input from a second entity.

30. The system of claim 29, wherein results of the optimization determination are forwarded to the second entity using a three part message, the three part message including:

a first part including the first information;

a second part including information regarding the optimization determination; and

a third part including information that has been translated for processing by a selected payment mechanism.

31. The system of claim 1, wherein the optimization determination performed by the processor includes the processor basing the optimization determination, at least in part, on the risk associated with each of a plurality of available payment mechanisms.

32. The system of claim 1, wherein the optimization determination performed by the processor includes the processor basing the optimization determination, at least in part, on costs associated with each of a plurality of available payment mechanisms.

33. The system of claim 1, wherein the optimization determination performed by the processor includes the processor basing the optimization determination, at least in part, on contractual minimums relating to volume discounts and the satisfaction of such contractual minimums.

34. The system of claim 33, wherein the optimization determination performed by the processor results in a first payment mechanism being chosen so as to attain a threshold for a volume discount with a first payment entity, and once the threshold for the volume discount is attained, in processing subsequent payment requests, switching to a second payment entity associated with a second payment mechanism different than the first payment mechanism.

35. The system of claim 1, wherein the plurality of available payment mechanisms includes at least two selected from the group including an automated clearing house network, a wire transfer, a remittance process system and an open financial exchange.

36. The system of claim 1, wherein the single payment source comprises one selected from the group consisting of a checking account, other demand deposit account (DDA), money market fund, securities account, stored value account, credit card account, currency account, overdraft line of credit, micro payment account, and line of credit.

37. A system for managing a transmission of funds for a payment request initiator, comprising:

an input portion that inputs first information from a payment request initiator, the first information including payment source information and payee information, the first information constituting a payment request;

a payment platform database that includes payment platform data, the payment platform data including decision reference data store; and

a processor, the processor communicating with the input portion and the payment platform database so as to input the first information and access select payment platform data, the processor;

identifying a single payment source based on the payment source information, the single payment source being the source of funds for the transmission of funds;

identifying a payee account based on the payee information;

performing, after identifying the single payment source and the payee account, an optimization determination to determine a payment mechanism, out of a plurality of available payment mechanisms, to use to transfer the funds from the single payment source to the payee account, the processor using the first information and payment platform data in the optimization determination; and

effecting the transmission of funds from the single payment source to the payee account using the payment mechanism; and

wherein the identifying a single payment source is performed using a further optimization determination, which is performed before the optimization determination to determine a payment mechanism; and

the further optimization determination, performed by the processor, determining the single payment source from a plurality of available payment sources;

the input portion is a computer of the payment request initiator, and the plurality of available payment sources are identified by the payment request initiator;

the optimization determination includes using a matching algorithm to match the payee account with the payment mechanism, the matching algorithm assigns various weighting to the requested transaction based on at least one of address matching, account number matching and name matching, the various weighting then used by the processor as a factor, in determination of the payment mechanism; and

the payment platform data includes affiliation data affiliating the single payment source with a plurality of available payment mechanisms, each of which is respectively usable to transmit the funds from a payment source; and

the optimization determination, performed by the processor, uses the affiliation data; and

the processor further determining a credit amount associated with the payment request initiator who submits the first information, and using the credit amount in the optimization determination; and

the optimization determination includes using a scoring mechanism that provides a score, the score relating to credit amount, and wherein the processor selects one payment mechanism out of the plurality of available payment mechanisms based on the score accorded to the payment request initiator, the optimization determination further including the scoring mechanism being used to segregate customers into different tiers, such segregation into different tiers used to determine the credit amount to be given to the payment request initiator; and

the optimization determination performed by the processor includes the processor basing the optimization determination, at least in part, on the risk associated with each of a plurality of available payment mechanisms.

38. The system of claim 37, wherein the optimization determination performed by the processor includes the processor basing the optimization determination, at least in part, on contractual minimums relating to volume discounts and the satisfaction of such contractual minimums.

39. The system of claim 38, wherein the optimization determination performed by the processor results in a first payment mechanism being chosen so as to attain a threshold for a volume discount with a first payment entity, and once the threshold for the volume discount is attained, in processing subsequent payment requests, switching to a second payment entity associated with a second payment mechanism different than the first payment mechanism.