System and method for conversion of initial transaction to final transaction

• US 7,702,577 B1
• Filed: 10/29/2004
• Issued: 04/20/2010
• Est. Priority Date: 11/06/2003
• Status: Active Grant

• Current Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co), US Bancorp Licensing Incorporated (US Bancorp)
• Original Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co), US Bancorp Licensing Incorporated (US Bancorp)
• Inventors: Dickelman, Mark
• Primary Examiner(s): Cheung; Mary
• Assistant Examiner(s): Nguyen; Tien C
• Application Number:
  US10/975,465
• Time in Patent Office: 1,999 Days
• Field of Search: 705 1- 64, 235/379, 235/380, 235/385, 358/1.15, 381/104, 701/16, 707/104.1
• US Class Current: 705/39
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/34 using cards, e.g. integrated circuit [IC] cards or magnetic cards
• CPC Class Codes: G06Q 20/38 Payment protocols; Details thereof
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes

Abstract

The invention comprises a system and method for converting initial financial transactions into final financial transactions entailing lower transaction fees or which are otherwise more advantageous. According to one embodiment of the invention, a card not present (CNP) transaction is conducted for a remote consumer buying goods/services. When the consumer later arrives at a point of authentication (POA), the consumer is presented with an opportunity to have the CNP transaction effectively converted to a card present (CP) transaction using the same card instrument or a different card instrument. The merchant benefits because the transaction fees are much reduced for the CP transaction compared to the CNP transaction. The consumer may benefit from rewards/rebates or other inducements to authorizing the subsequent transaction. One preferred embodiment implements the invention in the airlines environment, wherein tickets ordered over the phone or on-line using a first CNP transaction are converted to a CP transaction when the consumer swipes his/her card at an airport kiosk card reader device.

Claims

1. A computer implemented method for converting an initial financial transaction to a final financial transaction, the computer comprising a processor and a memory, the method comprising:

receiving a communication from a purchaser remotely contacting a merchant for the purpose of purchasing goods or services;

conducting a card not present (CNP) transaction using a first card instrument of the purchaser to pay for selected goods or services;

providing a point of authorization (POA) device for the purchaser bearing a second card instrument subsequent to the CNP transaction;

reading the second card instrument at the POA device; and

the processor converting the CNP transaction from the first card instrument to a card present (CP) transaction from the second card instrument.

2. The computer implemented method of claim 1, wherein the first card instrument and the second card instrument are the same.

3. The computer implemented method of claim 1, wherein the first card instrument and the second card instrument are different.

4. The computer implemented method of claim 1, wherein the step of converting comprises reversing or canceling the CNP transaction from the first card instrument and conducting a CP transaction for the second card instrument, the first card instrument and second card instrument being the same instrument.

5. The computer implemented method of claim 1, wherein the step of converting comprises converting a provisional CNP transaction to a CP transaction on the same card instrument, the first card instrument and the second card instrument being the same instrument.

6. The computer implemented method of claim 1, wherein the step of converting comprises reversing or canceling the CNP transaction from the first card instrument and conducting a CP transaction for the second card instrument, the first card instrument and second card instrument being different card instruments.

7. The computer implemented method of claim 1, further comprising presenting an offer to convert the CNP transaction to a CP transaction to a cardholder at the POA device.

8. The computer implemented method of claim 7, wherein the offer further includes an offer for a rebate or reward for authorizing the conversion.

9. The computer implemented method of claim 1, wherein remotely contacting a merchant comprises communication over a telephone.

10. The computer implemented method of claim 1, wherein remotely contacting a merchant comprises communication over the Internet or other public computer network.

11. The computer implemented method of claim 1, wherein reading the second card instrument at the POA device includes swiping the card through a card reader.

12. The computer implemented method of claim 11, wherein the card reader comprises a kiosk terminal, ATM terminal, or a point-of-sale (POS) device.

13. A system for converting an initial financial transaction to a final financial transaction, comprising:

means for a merchant to receive a communication from a remote consumer for the purpose of purchasing goods or services;

means for conducting a card not present (CNP) transaction using a first card instrument to pay for selected goods or services;

means for reading a second card instrument presented by the consumer at a point of authentication (POA);

means for presenting an offer to convert the CNP transaction on the first card instrument to a CP transaction on the second card instrument; and

means for converting the CNP transaction from the first card instrument to a CP transaction on the second card instrument.

14. The system of claim 13, wherein the means for a merchant to receive a communication from a remote consumer comprises a telephone connection to a live agent.

15. The system of claim 13, wherein the means for a merchant to receive a communication from a remote consumer comprises a telephone connection to a virtual agent.

16. The system of claim 13, wherein the means for a merchant to receive a communication from a remote consumer comprises a telephone connection to a virtual response unit (VRU) or interactive voice response (IVR) unit.

17. The system of claim 13, wherein the means for a merchant to receive a communication from a remote consumer comprises a Web site on the Internet or other presence on a public computer network.

18. The system of claim 13, wherein the means for conducting a CNP transaction using a first card instrument comprises a connection to a transaction processor coupled to a transaction network.

19. The system of claim 13, wherein the means for reading a second card instrument presented by the consumer at a POA comprises a card reader device, and the means for presenting an offer to convert the CNP transaction comprises a display presenting information of the offer.

20. The system of claim 19, wherein the card reader comprises a kiosk terminal, ATM terminal, or a point-of-sale (POS) device, the card reader being integrated with the display or located proximate to the display.

21. The system of claim 13, wherein the means for converting comprises a connection to a transaction processor coupled to a transaction network, the merchant submitting a first transaction to cancel or reverse the CNP transaction for the first card instrument and a second CP transaction for the second card instrument.

22. The system of claim 13, wherein the means for converting comprises a connection to a transaction processor coupled to a transaction network, the merchant submitting a transaction to convert the provisional CNP transaction to a CP transaction for the same card instrument, the first card instrument and the second card instrument being the same.

23. The system of claim 13, wherein the first card instrument and second card instrument are the same.