Method and system for processing internet payments using the electronic funds transfer network

• US 7,676,431 B2
• Filed: 01/31/2003
• Issued: 03/09/2010
• Est. Priority Date: 05/03/1999
• Status: Active Grant

• 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: Re, S. Richard, O'Leary, Denis, Burney, Jessica, Hoffman, Adam, D'Agostino, Vincent
• Primary Examiner(s): PATEL, JAGDISH
• Application Number:
  US10/356,171
• Publication Number:
  US 20030140004A1
• Time in Patent Office: 2,594 Days
• Field of Search: 705/39
• US Class Current: 705/39
• 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
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 20/105 involving programming of a portable memory device, e.g. IC cards, "electronic purses"
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• CPC Class Codes: G06Q 20/1085 involving automatic teller machines [ATMs]
• CPC Class Codes: G06Q 20/22 Payment schemes or models
• CPC Class Codes: G06Q 20/342 Cards defining paid or billed services or quantities
• 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 30/0222 During e-commerce, i.e. online transactions
• CPC Class Codes: G06Q 30/0226 Incentive systems for frequent usage, e.g. frequent flyer miles programs or point systems
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• CPC Class Codes: G06Q 30/0613 Third-party assisted
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/12 Accounting
• CPC Class Codes: G07F 17/42 for ticket printing or like apparatus , e.g. apparatus for dispensing of printed paper tickets or payment cards
• CPC Class Codes: G07F 19/20 Automatic teller machines [ATMs]
• CPC Class Codes: G07F 7/025 by means, e.g. cards, providing billing information at the time of purchase, e.g. identification of seller or purchaser, quantity of goods delivered or to be delivered

Abstract

Embodiments of the invention include a method and system for effectuating an electronic payment between a payor and a payee using an Electronic Funds Transfer (EFT) network. The method is implemented by a system having multiple processors. The payor may hold a payor account at a payor institution and the payee may have a payee account at a payee institution. The method includes generating a payment authorization identifying the payee institution, the payee account, and an amount of the payment and transmitting the payment authorization to the payor institution. The method further includes debiting the payor account by the amount of the payment; transmitting from the payor institution to the payee institution though the EFT network an EFT credit message representing a credit in the amount of the payment; and crediting the payee account in the amount of the payment in response to the receipt of the EFT credit message.

Claims

1. A computer-implemented method for effectuating an electronic payment between a payor and a payee using an Electronic Funds Transfer (EFT) network, the payor having a payor account at a payor institution and the payee having a payee account at a payee institution, the method comprising the steps of:

facilitating identification of the payee for the payor using a first processor, by providing electronically accessible payee information on a host server, the payee information including a payee account identifier;

generating a payment authorization, using the first processor, in response to a payor request, the payment authorization including accessed payee information and an amount of the payment;

transmitting the payment authorization to the payor institution using the first processor,

debiting the payor account by the amount of the payment using the first processor;

transmitting from the payor institution to the payee institution through the EFT network an EFT credit message representing a credit in the amount of the payment using a second processor; and

crediting the payee account in the amount of the payment in response to the receipt of the EFT credit message using a third processor.

2. The method as recited in claim 1, further comprising identifying the payee information, the payee information including the payee institution.

3. The method as recited in claim 2, wherein the identifying step further comprises the step of retrieving the payee information from a directory containing payee information for a plurality of payees.

4. The method as recited in claim 2, wherein the identifying step further comprises the step retrieving the payee information from a pull down menu displayed on a device employed by the payor.

5. The method as recited in claim 2, wherein the identifying step further comprises the step of the payor keying the payee information into a device employed by the payor.

6. The method as recited in claim 2, wherein the identifying step further comprises the step of retrieving the payee information by phone.

7. The method as recited in claim 2, wherein the identifying step further comprises the step of retrieving the payee information from an Internet site provided by the host server.

8. The method as recited in claim 7, wherein the identifying step and the steps of generating and transmitting the payment authorization is performed by a Wallet software application.

9. The method as recited in claim 7, wherein the payee information is pushed to the payor from the Internet site.

10. The method as recited in claim 7, wherein the payee information is pulled by the payor from the Internet site.

11. The method as recited in claim 10, wherein the Internet site contains a directory of payee information for a plurality of payees and wherein the step of pulling the payee information further comprises the step of selecting the payee information from the directory.

12. The method as recited in claim 1, wherein the payee institution and the payor institution are financial institutions.

13. The method as recited in claim 1, wherein the payee institution and the payor institution are banks.

14. The method as recited in claim 1, further comprising the step of receiving a payment message, the payment message containing an identification of the payee institution, the payee account and the amount of the payment.

15. The method as recited in claim 14, wherein the payment authorization is generated in response to the receipt of the payment message.

16. The method as recited in claim 1, further comprising the step of performing a certification procedure confirming the validity of the identification of the payee institution and payee account prior to the step of transmitting the EFT credit message.

17. The method as recited in claim 1, further comprising the step of transmitting a payment confirmation to the payee confirming transmission of the EFT credit message.

18. The method as recited in claim 17, wherein the payment confirmation is transmitted prior to the transmission of the EFT credit message.

19. The method as recited in claim 17, wherein the payment confirmation is transmitted after the transmission of the EFT credit message.

20. The method as recited in claim 17, wherein the payment confirmation is transmitted through the Internet.

21. The method as recited in claim 17, wherein the payment confirmation is transmitted by E-mail.

22. The method as recited in claim 17, further comprising the step of the payee storing the payment confirmation.

23. The method as recited in claim 1, wherein the step of transmitting the payment authorization to the payor institution further comprises the step of transmitting the payment authorization through the Internet.

24. The method as recited in claim 23, wherein the step of transmitting the payment authorization to the payor institution is accomplished using a personal computer.

25. The method as recited in claim 23, wherein the step of transmitting the payment authorization to the payor institution is accomplished using an ATM machine.

26. The method as recited in claim 23, wherein the step of transmitting the payment authorization to the payor institution is accomplished by using an Internet enabled Kiosk.

27. The method as recited in claim 23, wherein the step of transmitting the payment authorization to the payor institution is accomplished by using an Internet enabled Personal Digital Assistant.

28. The method as recited in claim 23, wherein the step of transmitting the payment authorization to the payor institution is accomplished by using an interactive television.

29. The method as recited in claim 1, wherein the step of transmitting the payment authorization to the payor institution further comprises the step of transmitting the payment request by telephone.

30. The method as recited in claim 29, wherein the telephone is a cellular telephone.

31. The method as recited in claim 1, further comprising the step of performing a settlement between the payor institution and the payee institution at least with respect to the credit contained in the EFT credit message.

32. The method as recited in claim 1, wherein the EFT credit message represents a unique credit and not a reversal of a debit.

33. The method as recited in claim 1, wherein the payee account is a receive only account.

34. The method as recited in claim 33, further comprising the step of reporting to the payee the crediting of the receive only account.

35. The method as recited in claim 33, further comprising the step of transferring the credited amount of the payment from the receive only account to a different account held by the payee.

36. The method as recited in claim 1, further comprising the step of linking a physical card to the payor account.

37. The method as recited in claim 36, further comprising the step of requiring a Personal Identification Number (PIN) when the physical card is used to access the payor account.

38. A method for effectuating an electronic credit to a destination account at a destination institution, the method comprising the steps of:

providing, using a first processor, electronically accessible destination account information on a host server, the destination account information including a destination account identifier and the destination institution;

identifying the destination account, the destination institution and an amount of the credit using the first processor; and

transmitting an Electronic Funds Transfer (EFT) credit message to the destination institution through an Electronic Funds Transfer network using a second processor, the EFT credit message representing the credit.

39. The method as recited in claim 38, further comprising the step of crediting the destination account in the amount of the credit in response to the receipt of the EFT credit message.

40. The method as recited in claim 38, wherein the credit originates from an origination account, the method further comprising the step of debiting the origination account in the amount of the credit.

41. The method as recited in claim 38, wherein the destination institution is a bank.

42. A computer-implemented system for effectuating an electronic payment between a payor and a payee using an Electronic Funds Transfer (EFT) network, the payor having a payor account at a payor institution and the payee having a payee account at a payee institution, the system comprising:

a first software component and a first processor executing the first software component, the first software component facilitating identification of the payee for the payor by providing electronically accessible payee information on a host server, the payee information including a payee account identifier, the first software component further generating a payment authorization in response to a payor request, the payment authorization including accessed payee information identifying the payee institution, the payee account and an amount of the payment, the first software component further transmitting the payment authorization to the payor institution;

a second software component at the payor institution and a second processor executing the second software component, the second software components and second processor communicating with the first processor and first software component and the EFT network, the second software component receiving the payment authorization and transmitting from the payor institution to the payee institution through the EFT network an EFT credit message representing a credit in the amount of the payment; and

a third software component and a payee institution processor executing the third software component at the payee institution coupled to the EFT network, the third software component executed by the payee institution processor for receiving the EFT credit message and crediting the payee account in the amount of the payment.

43. The system as recited in claim 42, wherein the first software component is a Wallet software application.

44. The system as recited in claim 42, wherein the first software component further comprises a retrieval Application Programming Interface (API) for retrieving the payee information from an Internet site hosted at the host server.

45. The system as recited in claim 44, wherein the retrieval API retrieves the payee information when it is pushed from the Internet site.

46. The system as recited in claim 44, wherein the retrieval API pulls the payee information from the Internet site.

47. The system as recited in claim 44, wherein the Internet site contains a directory of payee information for a plurality of payees and wherein retrieval API selects the payee information from the directory.

48. The system as recited in claim 42, further comprising a directory containing payee information for a plurality of payees, wherein the first software component identifies the payee information using the directory.

49. The system as recited in claim 42, wherein the payor institution and the payee institution are banks.

50. The system as recited in claim 42, further comprising a device on which the first software component is accessed and controlled.

51. The system as recited in claim 50, further comprising a pull down menu displayed on the device, where in the pull down menu contains payee information for a plurality of payees.

52. The system as recited in claim 50, further comprising a keyboard coupled to the device, wherein payee information is keyed into the device using the keyboard.

53. The system as recited in claim 50, wherein the device is a personal computer.

54. The system as recited in claim 50, wherein the device is an Internet enabled ATM machine.

55. The system as recited in claim 50, wherein the device is an Internet enabled Kiosk.

56. The system as recited in claim 50, wherein the device is an Internet enabled Personal Digital Assistant.

57. The system as recited in claim 50, wherein the device is an interactive television.

58. The system as recited in claim 50, wherein the device is a telephone.

59. The system as recited in claim 58, wherein the telephone is a cellular telephone.

60. The system as recited in claim 42, further comprising a fourth software component executed by a payee processor communicating with the first processor executing the first software component, the fourth software component transmitting a payment message to the first software component, the payment message containing an identification of the payee institution, the payee account and the amount of the payment.

61. The system as recited in claim 42, wherein the first software component confirms the validity of the identification of the payee institution and payee account.

62. The system as recited in claim 42, wherein the second software component confirms the validity of the identification of the payee bank and payee account.

63. The system as recited in claim 42, wherein the first software component transmits a payment confirmation to the payee confirming transmission of the EFT credit message.

64. The system as recited in claim 63, wherein the payment confirmation is transmitted by E-Mail.

65. The system as recited in claim 42, wherein second software component transmits a payment confirmation to the payee confirming transmission of the EFT credit message.

66. The system as recited in claim 42, wherein the first software component is coupled to the second software component through the Internet.

67. The system as recited in claim 42, wherein the EFT credit message represents a unique credit and not a reversal of a debit.

68. The system as recited in claim 42, wherein the payee account is a receive only account.

69. The system as recited in claim 42, further comprising a reporting software component coupled to the payee account, the reporting software component reporting to the payee the crediting of the payee account.

70. The system as recited in claim 42, wherein the payor account has a first address, the first address being used to access the payor account for making payments from the payor account.

71. The system as recited in claim 70, wherein the payor account has a second address, the second address being used to receive credits transmitted to the payor account.

72. The system as recited in claim 71, debits from the payor account are prohibited using the second address, whereby the payor can publish the second address for the receipt of credits to the payor account.

73. The system as recited in claim 71, wherein the first and second addresses are different.

74. The system as recited in claim 70, wherein the first address additionally identifies the payor institution.

75. The system as recited in claim 42, further comprising a physical card logically linked to the payor account.

76. The system as recited in claim 75, wherein the physical card is linked to the payor account through second software component, the second software component requiring a Personal Identification Number (PIN) when the physical card is used to access the payor account.

77. A system for effectuating an electronic payment between a payor and a payee using an Electronic Funds Transfer (EFT) network, the payor having a payor account at a payor institution and the payee having a payee account at a payee institution, the system comprising:

a first processor for facilitating identification of the payee for the payor by providing electronically accessible payee information, the payee information including a payee account identifier, the first processor further generating a payment authorization in response to a payor request, the payment authorization including accessed payee information identifying the payee institution, the payee account and an amount of the payment, the first processor further transmitting the payment authorization to the payor institution;

a second processor at the payor institution in communication with the first processor and coupled to the EFT network, the second processor receiving the payment authorization and transmitting from the payor institution to the payee institution through the EFT network an EFT credit message representing a credit in the amount of the payment; and

a third processor at the payee institution coupled to the EFT network, the third processor receiving the EFT credit message and crediting the payee account in the amount of the payment.

78. The system as recited in claim 77, wherein the payee institution and the payor institution are banks.

79. A system for effectuating an electronic credit from an origination account at an origination institution to a destination account at a destination institution, the system comprising:

a host server providing electronically accessible destination account information, the destination account information including a destination account identifier and the destination institution;

a first processor at the origination institution, the first processor generating an Electronic Funds Transfer credit message identifying the destination account and the destination institution retrieved from the host server, the credit message further including an amount of the credit;

an Electronic Funds Transfer network coupled to the first processor, wherein the first processor transmits the Electronic Funds Transfer credit message to the destination institution through the Electronic Funds Transfer network; and

a second processor at the destination institution, the second processor being coupled to the Electronic Funds Transfer network and

receiving the Electronic Funds Transfer credit message from the first processor.

80. The system as recited in claim 79, wherein the second processor credits the destination account in the amount of the credit in response to the receipt of the Electronic Funds Transfer credit message.

81. The system as recited in claim 79, wherein the first processor debits the origination account in the amount of the credit.

82. The system as recited in claim 79, wherein the origination and destination institutions are banks.