Method and system for facilitating electronic funds transactions

• US 7,775,426 B2
• Filed: 08/21/2006
• Issued: 08/17/2010
• Est. Priority Date: 04/23/2001
• Status: Active Grant

• Current Assignee: Kioba Processing, LLC (IP Investments Group LLC)
• Original Assignee: Relocall Group BV LLC (Intellectual Ventures LLC)
• Inventors: Paul, David K., Hatfield, R. Scott
• Primary Examiner(s): LE, THIEN MINH
• Application Number:
  US11/507,938
• Publication Number:
  US 20070045407A1
• Time in Patent Office: 1,457 Days
• Field of Search: 235/379, 235/380, 235/381, 235/382, 235/375, 235/492, 705/21, 705/44, 705/42, 705/19, 705/35, 705/38
• US Class Current: 235/379
• CPC Class Codes: G06Q 20/12 specially adapted for electronic shopping systems
• CPC Class Codes: G06Q 20/14 specially adapted for billing systems
• CPC Class Codes: G06Q 20/26 Debit schemes, e.g. "pay now"
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes

Abstract

A method and system for executing electronic funds transactions using a merchant-issued payment (MIP) card in a merchant-centric system having benefits which include reduced fees to acquiring merchants and optionally remitting a portion of the collected fees, or other incentive, to issuing merchants. The system also preferably provides information sharing on consumer transactions with merchants to facilitate consumer based incentive programs and the like. The system operates over conventional card processing infrastructure and utilizes the ACH network, or equivalent, to settle the transaction from a consumer checking account, or a merchant account in the case of a prepaid MIP card. Using the system, merchants may elect to qualify customers based on their own criterion. Embodiments are described for prepaid, fixed value, programmable, and refillable, forms of merchant-issued payment cards.

Claims

1. A system for facilitating electronic funds transactions using interoperable payment cards between one or more cardholders and one or more merchants, the system comprising:

one or more payment cards containing point-of-sale readable account information, configured to be issued to the one or more cardholders within a merchant-issued card program;

wherein said one or more payment cards are associated with one or more respective account numbers that begin with unique International Standards Organization (ISO) identification number, which are assigned for the merchant-issued card program;

wherein said one or more payment cards are configured to be issued by the one or more merchants, participating in said merchant-issued card program as one or more issuing merchants, to the one or more cardholders with privileges to execute purchase transactions interoperably at any of the one or more merchants;

one or more point-of-sale transaction terminals respectively associated with at least some of said one or more merchants, acting as acquiring merchants, and configured to interoperably receive said payment card as a form of payment, without interconnecting their respective proprietary transaction execution systems;

a network-enabled computer having an associated payment card data base within the merchant-issued card program and adapted for communicating through non-proprietary card processing services with the one or more point-of-sale transaction terminals;

wherein said payment card data base is configured to be loaded with information for accessing one or more respective valid demand deposit accounts (DDAs) associated with the account numbers before said one or more payment cards will be accepted for payment at the one or more point-of-sale transaction terminals; and

programming associated with said computer, wherein said programming configures the computer to;

receive respective transaction information from the one or more point-of-sale transaction terminals in response to an attempted purchase transactions by said one or more cardholders using said respective payment cards,

execute one or more of said purchase transactions utilizing an automated clearing house (ACH) network in response to respective DDA information retained for said payment cards, in response to determining that the payment cards and purchase transactions are valid,

settle one or more of the purchase transactions after execution of said one or more purchase transactions, through a card processing service, from funds retained within one or more DDAs associated with one or more of the respective payment cards associated with the one or more purchase transactions,

charge one or more acquiring merchants a fee for executing said one or more purchase transactions, and

provide incentives to the one or more issuing merchants who issued the one or more payment cards involved in respective purchase transactions in response to settling the respective purchase transactions.

2. A system as recited in claim 1, wherein said programming configures the computer to provide to the one or more issuing merchants with cash or non-cash incentives.

3. A system as recited in claim 1, wherein said payment cards are branded by one or more of said merchants, one or more parties associated with one or more of said merchants, or a combination of one or more merchants and one or more associated parties;

and wherein said branding comprises an indicia and trade dress to advertise and enhance recognition of said merchant, and/or parties, in a marketplace.

4. A system as recited in claim 1, wherein said network-enabled computer is configured to enable the issuing merchants to qualify one or more cardholders to whom they issue payment cards and to assume at least a portion of the responsibility for transactions of the one or more cardholders qualified by the issuing merchants.

5. A system as recited in claim 1, wherein at least one of said payment cards is co-issued by an issuing merchant and a guarantor entity;

wherein said guarantor entity provides a guarantee to acquiring merchants as to the payment of executed transactions; and

wherein said guarantee is made to said issuing merchant by said guarantor in exchange for monetary considerations thereof.

6. A system as recited in claim 1, wherein said programming further configures the network-enabled computer to validate a respective payment card in response to receiving a personal identification number (PIN) before executing one or more respective purchase transactions based on the respective payment card.

7. A system as recited in claim 1, wherein said programming further configures the network-enabled computer to enable the issuing merchants to control issuance of payment cards from which transactions can be executed at merchants that have signed up in the merchant-issued card program as acquiring merchants.

8. A system as recited in claim 1, wherein said programming further configures the network-enabled computer to share transaction information with said issuing merchants and/or said acquiring merchants;

and

wherein said issuing merchant qualifies to receive higher levels of transaction information access as a form of incentive issuing merchant incentive.

9. A system as recited in claim 1, wherein said programming further configures the network-enabled computer to evaluate requested purchase transactions in relation to predetermined account limitations prior to executing said purchase transactions.

10. A system as recited in claim 9, wherein said programming further configures the network-enabled computer to evaluate requested purchase transactions in relation to transaction limits, rate of use limitations, or a combination thereof.

11. A system as recited in claim 9, wherein said programming further configures the network-enabled computer to evaluate requested purchase transactions in relation to a variable velocity feature which evaluates valid card use according to one or more time sensitive usage values.

12. A system as recited in claim 1, wherein said programming further configures the network-enabled computer to request card processing services to be performed by a third party processor or by a merchant which provides its own card processing services and is linked directly to the network-enabled computer of the merchant-issued card program.

13. A system as recited in claim 1, further comprising a host data center, including one or more databases, configured to provide at least one service selected from the group consisting of:

account screening for card issuance, card database management, payment processing including authorization, financial settlement and reconciliation, returns management and collection.

14. A system as recited in claim 1, wherein said DDAs are associated with the cardholders, the issuing merchants, or third-parties associated with the issuing merchants.

15. A system as recited in claim 1, wherein at least one of the DDAs comprises a checking account of a consumer;

and

wherein said programming further configures the network-enabled computer to collect personal identification from the consumer to become qualified for utilizing a payment card associated with the DDA information, and wherein the DDA information includes a bank account number and a routing number.

16. A system for facilitating electronic funds transactions using interoperable payment cards between one or more cardholders and one or more merchants, the system comprising:

one or more payment cards containing point-of-sale readable account information, configured to be issued to the one or more cardholders within a merchant-issued card program;

wherein said one or more payment cards are associated with one or more respective account numbers that begin with unique International Standards Organization (ISO) identification number, which are assigned for the merchant-issued card program;

wherein said one or more payment cards are configured to be issued by the one or more merchants, participating in said merchant-issued card program as one or more issuing merchants, to the one or more cardholders with privileges to execute purchase transactions interoperably at any of the one or more merchants;

one or more point-of-sale transaction terminals respectively associated with at least some of said one or more merchants, acting as acquiring merchants, and configured to interoperably receive said payment card as a form of payment, without interconnecting their respective proprietary transaction execution systems;

a network-enabled computer having an associated payment card data base within the merchant-issued card program and adapted for communicating through non-proprietary card processing services with the one or more point-of-sale transaction terminals;

wherein said payment card data base is configured to be loaded with information for accessing one or more respective valid demand deposit accounts (DDAs) associated with the account numbers before said one or more payment cards will be accepted for payment at the one or more point-of-sale transaction terminals; and

programming associated with said computer, wherein said programming configures the computer to;

receive respective transaction information from the one or more point-of-sale transaction terminals in response to an attempted purchase transactions by said one or more cardholders using said respective payment cards,

execute one or more of said purchase transactions utilizing an automated clearing house (ACH) network in response to respective DDA information retained for said payment cards, in response to determining that the payment cards and purchase transactions are valid,

settle one or more of the purchase transactions after execution of said one or more purchase transactions, through a card processing service, from funds retained within one or more DDAs associated with one or more of the respective payment cards associated with the one or more purchase transactions, and

charge one or more acquiring merchants a fee for executing said one or more purchase transactions.

17. A system as recited in claim 16, wherein said programming further configures the network-enabled computer to share transaction information with qualifying merchants participating in said merchant-issued card program as issuing merchants and/or acquiring merchants.

18. A system as recited in claim 17, wherein said programming further configures the network-enabled computer to share a higher level of transaction information access with issuing merchants than with acquiring merchants.

19. A system as recited in claim 16, wherein said programming further configures the network-enabled computer to share transaction information with qualifying issuing merchants participating in said merchant-issued card program.

20. A system as recited in claim 16, wherein said payment cards are branded by one or more of said merchants or one or more third parties with an indicia and trade dress to advertise and enhance recognition of the one or more said merchants in a marketplace.

21. A system as recited in claim 16, wherein said network-enabled computer is configured to enable the issuing merchants to qualify one or more cardholders to whom they issue payment cards and to assume at least a portion of the responsibility for transactions of the one or more cardholders qualified by the issuing merchants.

22. A system as recited in claim 16, wherein at least one of said payment cards is co-issued by an issuing merchant and a guarantor entity;

wherein said guarantor entity provides a guarantee to acquiring merchants as to the payment of executed transactions; and

wherein said guarantee is made to said issuing merchant by said guarantor in exchange for monetary considerations thereof.

23. A system as recited in claim 16, wherein said programming further configures the network-enabled computer to validate a respective payment card in response to receiving a personal identification number (PIN) before executing one or more respective purchase transactions based on the respective payment card.

24. A system as recited in claim 16, wherein said programming further configures the network-enabled computer to enable the issuing merchants to control issuance of payment cards from which transactions can be executed at merchants that have signed up in the merchant-issued card program as acquiring merchants.

25. A system as recited in claim 16, wherein said programming further configures the network-enabled computer to evaluate requested purchase transactions in relation to predetermined account limitations prior to executing said purchase transactions.

26. A system as recited in claim 16, wherein said programming further configures the network-enabled computer to request card processing services to be performed by a third party processor or by a merchant which provides its own card processing services and is linked directly to the network-enabled computer of the merchant-issued card program.

27. A system as recited in claim 16, further comprising a host data center, including one or more databases, configured to provide at least one service selected from the group consisting of:

account screening for card issuance, card database management, payment processing including authorization, financial settlement and reconciliation, returns management and collection.

28. A system as recited in claim 16, wherein said DDAs are associated with the cardholders, the issuing merchants, or third-parties associated with the issuing merchants.

29. A system as recited in claim 16, wherein at least one of the DDAs comprises a checking account of a consumer;

and wherein said programming further configures the network-enabled computer to collect personal identification from the consumer to become qualified for utilizing a payment card associated with the DDA information, and wherein the DDA information includes a bank account number and a routing number.

30. A system for facilitating electronic funds transactions using interoperable payment cards between one or more cardholders and one or more merchants, the system comprising:

one or more payment cards containing point-of-sale readable account information, configured to be issued to the one or more cardholders within a merchant-issued card program;

wherein said one or more payment cards are associated with one or more respective account numbers that begin with unique International Standards Organization (ISO) identification number, which are assigned for the merchant-issued card program;

wherein said one or more payment cards are configured to be issued by the one or more merchants, participating in said merchant-issued card program as one or more issuing merchants, to the one or more cardholders with privileges to execute purchase transactions interoperably at any of the one or more merchants acting as acquiring merchants; and

a network-enabled computer having an associated payment card data base within the merchant-issued card program and adapted for communication through card processing services with one or more point-of-sale transaction terminals to receive transaction information from the one or more point-of-sale transaction terminals, the network-enabled computer being further configured to;

execute a transaction using an automated clearing house (ACH) network in response to demand deposit account (DDA) information previously loaded into said payment card data base, to settle the transaction from funds from a DDA account associated with a payment card used in said transaction, and to charge an acquiring merchant a fee for executing said transaction.

31. A system as recited in claim 30, wherein the network-enabled computer is further configured to share transaction information with qualifying merchants participating in said merchant-issued card program as issuing merchants and/or acquiring merchants.

32. A system as recited in claim 31, wherein the network-enabled computer is further configured to share a higher level of transaction information access with issuing merchants than with acquiring merchants.

33. A system as recited in claim 30, wherein the network-enabled computer is further configured to share transaction information with qualifying issuing merchants participating in said merchant-issued card program.

34. A system as recited in claim 30, wherein said payment cards are branded by one or more of said merchants or one or more third parties with an indicia and trade dress to advertise and enhance recognition of the one or more said merchants in a marketplace.

35. A system as recited in claim 30, wherein said network-enabled computer is further configured to enable the issuing merchants to qualify one or more cardholders to whom they issue payment cards and to assume at least a portion of the responsibility for transactions of the one or more cardholders qualified by the issuing merchants.

36. A system as recited in claim 30, wherein at least one of said payment cards is co-issued by an issuing merchant and a guarantor entity;

wherein said guarantor entity provides a guarantee to acquiring merchants as to the payment of executed transactions; and

wherein said guarantee is made to said issuing merchant by said guarantor in exchange for monetary considerations thereof.

37. A system as recited in claim 30, wherein the network-enabled computer is further configured to validate a respective payment card in response to receiving a personal identification number (PIN) before executing one or more respective purchase transactions based on the respective payment card.

38. A system as recited in claim 30, wherein the network-enabled computer is further configured to enable the issuing merchants to control issuance of payment cards from which transactions can be executed at merchants that have signed up in the merchant-issued card program as acquiring merchants.

39. A system as recited in claim 30, wherein the network-enabled computer is further configured to evaluate requested purchase transactions in relation to predetermined account limitations prior to executing said purchase transactions.

40. A system as recited in claim 30, wherein the network-enabled computer is further configure to request card processing services to be performed by a third party processor or by a merchant which provides its own card processing services and is linked directly to the network-enabled computer of the merchant-issued card program.

41. A system as recited in claim 30, further comprising a host data center, including one or more databases, configured to provide at least one service selected from the group consisting of:

account screening for card issuance, card database management, payment processing including authorization, financial settlement and reconciliation, returns management and collection.

42. A system as recited in claim 30, wherein said DDAs are associated with the cardholders, the issuing merchants, or third-parties associated with the issuing merchants.

43. A system as recited in claim 30, wherein at least one of the DDAs comprises a checking account of a consumer;

and wherein the network-enabled computer is further configured to collect personal identification from the consumer to become qualified for utilizing a payment card associated with the DDA information, and wherein the DDA information includes a bank account number and a routing number.