International banking system and method

• US 7,822,656 B2
• Filed: 02/09/2001
• Issued: 10/26/2010
• Est. Priority Date: 02/15/2000
• 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: Leong, Sang, Chittick, Ian, Metherell, Mel, Parkin, Richard, Baker, Richard, Green, Les, Knight, Nigel, Anders, Marc A.
• Primary Examiner(s): Felten; Daniel S
• Application Number:
  US09/779,950
• Publication Number:
  US 20010034682A1
• Time in Patent Office: 3,546 Days
• Field of Search: 705/37, 705/36.R, 705/41, 235/380, 235/379
• US Class Current: 705/35
• 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 20/04 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 20/105 involving programming of a portable memory device, e.g. IC cards, "electronic purses"
• CPC Class Codes: G06Q 30/04 Billing or invoicing
• 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 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A system an method for providing banks with access to a previously inaccessible existing international infrastructure. A provider bank first establishes on its system, a set of accounts for each of the customers of a client bank. (the client bank environment). The client bank environment has its own Demand Deposit Account (DDA) module to process account entries and calculate interest and its own funds transfer module to initiate and to receive funds transfers. The primary interface into the funds transfer section in the client bank environment is to the funds transfer section of the provider bank environment. The funds transfer section of the provider bank is coupled to the systems which constitute the international banking infrastructure that is able to process banking transactions on a global basis for the customers of the client bank. A customer requests a particular international transaction to be performed by its client bank. The client bank then communicates the requested transaction to the funds transfer section in the client bank environment within the system of the provider bank. Once the client bank funds transfer section has received the requested transaction, it references the customer'"'"'s accounts in the client bank environment (e.g., to debit the customer'"'"'s account) and then transmit a transaction message (e.g., a payment message) to the funds transfer section of the provider bank environment. The funds transfer section of the provider bank processes the transaction as a typical correspondent bank payment across the Nostro account(s) of the client bank environment (e.g., a high value wire transfer) through one of the clearing systems. Incoming funds (i.e., credits) intended for accounts of customers of the client bank follow this flow in reverse.

Claims

1. A system by which a provider bank effectuates international banking, transactions for a plurality of customers of a client bank, the system comprising:

a client bank subsystem established within the provider bank, the client bank subsystem comprising;

a plurality of customer accounts corresponding to the plurality of customers of the client bank, and

a client bank subsystem processor coupled to the plurality of customer accounts and coupled to the client bank, the client bank subsystem processor receiving a payment instruction from the client bank related to a low value payment in a particular country requested by a particular customer of the client bank, the client bank subsystem processor debiting the customer account of the particular customer and generating the low value payment in response to the payment instruction from the client bank; and

a provider bank subsystem established within the provider bank, the provider bank subsystem comprising;

a provider bank subsystem processor coupled to the client bank subsystem processor and coupled to a low value payment system in the particular country, the provider bank subsystem processor receiving the low value payment from the client bank subsystem processor and transmitting the low value payment to the low value payment system in the particular country, whereby the particular customer of the client bank can make the low value payment even though the client bank does not have direct access to the low value payment system in the particular country.

2. The system as recited in claim 1, wherein the low value payment is for less than 50,000 United States dollars.

3. The system as recited in claim 1, wherein the low value payment system comprises a international Automated Clearing House (ACH) system.

4. The system as recited in claim 1, wherein the low value payment system comprises a GIRO system.

5. The system as recited in claim 1, further comprising a local branch of the provider bank in the particular country, wherein the provider bank subsystem processor is coupled to the low value payment system through the local branch.

6. The system as recited in claim 1, wherein the provider bank subsystem processor is coupled to the low value payment system through a correspondent bank in the particular country.

7. The system as recited in claim 1, further comprising a gateway processor coupled to the client bank and coupled to the client bank subsystem processor, wherein the client bank transmits a payment file to the gateway processor, the payment file containing a plurality of payment instructions, and wherein the gateway processor separates the plurality of payment instructions from the payment file and communicates the separated payment instructions to the client bank subsystem processor.

8. The system as recited in claim 7, wherein the plurality of payment instructions relate to more than one of the plurality of customers of the client bank.

9. The system as recited in claim 7, wherein the payment file is encrypted.

10. The system as recited in claim 1, wherein there is a second client bank having a second plurality of customers, the system further comprising:

a second client bank subsystem established within the provider bank, the second client bank subsystem comprising;

a second plurality of customer accounts corresponding to the second plurality of customers of the second client bank, and a second client bank subsystem processor coupled to the second plurality of customer accounts, coupled to the second client bank and coupled to the provider bank subsystem processor, wherein the second client bank subsystem processor and the provider bank subsystem processor operate to effectuate low value payments in response to instructions from the second client bank.

11. The system as recited in claim 1, wherein the payment instruction from the client bank relates to a high value payment and wherein the provider bank subsystem processor is further coupled to a high value clearing system, the provider bank subsystem processor communicating the high value payment to the high value clearing system.

12. The system as recited in claim 11, wherein the high value clearing system is selected from the group consisting of a Real-Time Gross Settlement system, a Multi-Lateral Net Settlement system, European Banking Association Euro clearing system, and the Trans-European Automated Real-time Gross settlement Express Transfer system.

13. The system as recited in claim 11, wherein the provider bank subsystem processor further performs a foreign exchange operation with respect to the high value payment prior to communicating the high value payment to the high value clearing system.

14. The system as recited in claim 1, wherein the provider bank provides liquidity management services with respect to the plurality of customer accounts.

15. The system as recited in claim 14, wherein the liquidity management services includes account balance sweeping.

16. The system as recited in claim 15, wherein the account balance sweeping is zero balance sweeping.

17. The system as recited in claim 15, wherein the account balance sweeping is target balance sweeping.

18. The system as recited in claim 14, wherein the liquidity management services includes account pooling.

19. The system as recited in claim 1, wherein the step of transmitting the low value payment to the low value payment system in the particular country further comprises transmitting the low value payment to a local branch of the provider bank in the particular country, wherein the local branch transmits the low value payment to the low value payment system.

20. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing a client bank subsystem within the provider bank;

establishing a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank related to a low value payment in a particular country requested by a particular customer of the client bank, wherein the low value payment is for less than 50,000 United States dollars;

debiting the customer account of the particular customer;

generating the low value payment in response to the payment instruction from the client bank

establishing a provider bank subsystem within the provider bank;

receiving the low value payment from the client bank subsystem; and

transmitting the low value payment to a low value payment system in the particular country, whereby the particular customer of the client bank can make the low value payment even though the client bank does not have direct access to the low value payment system in the particular country.

21. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing a client bank subsystem within the provider bank;

establishing a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank related to a low value payment in a particular country requested by a particular customer of the client bank;

debiting the customer account of the particular customer;

generating the low value payment in response to the payment instruction from the client bank

establishing a provider bank subsystem within the provider bank;

receiving the low value payment from the client bank subsystem; and

transmitting the, low value payment to a low value payment system in the particular country, whereby the particular customer of the client bank can make the low value payment even though the client bank does not have direct access to the low value payment system in the particular country and wherein the low value payment system comprises a international Automated Clearing House (ACH) system.

22. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing a client bank subsystem within the provider bank;

establishing a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank related to a low value payment in a particular country requested by a particular customer of the client bank;

debiting the customer account of the particular customer;

generating the low value payment in response to the payment instruction from the client bank

establishing a provider bank subsystem within the provider bank;

receiving the low value payment from the client bank subsystem; and

transmitting the low value payment to a low value payment system in the particular country, whereby the particular customer of the client bank can make the low value payment even though the client bank does not have direct access to the low value payment system in the particular country and wherein the low value payment system comprises a GIRO system.

23. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing a client bank subsystem within the provider bank;

establishing a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank related to a low value payment in a particular country requested by a particular customer of the client bank;

debiting the customer account of the particular customer;

generating the low value payment in response to the payment instruction from the client bank

establishing a provider bank subsystem within the provider bank;

receiving the low value payment from the client bank subsystem; and

transmitting the low value payment to a low value payment system in the particular country, whereby the particular customer of the client bank can make the low value payment even though the client hank does not have direct access to the low value payment system in the particular country, wherein the step of transmitting the low value payment to the low value payment system in the particular country further comprises transmitting the low value payment to a correspondent bank in the particular country, wherein the local correspondent bank transmits the low value payment to the low value payment system.

24. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing a client bank subsystem within the provider bank;

establishing a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank related to a low value payment in a particular country requested by a particular customer of the client bank;

transmitting a payment file from the client bank to a gateway processor, the payment file containing a plurality of payment instructions;

separating, in the gateway processor, the plurality of payment instructions from the payment file; and

communicating the separated payment instructions to the client bank subsystem;

debiting the customer account of the particular customer;

generating the low value payment in response to the payment instruction from the client bank;

establishing a provider bank subsystem within the provider bank;

receiving the low value payment from the client bank subsystem; and

transmitting the low value payment to a low value payment system in the particular country, whereby the particular customer of the client bank can make the low value payment even though the client bank does not have direct access to the low value payment system in the particular country.

25. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing a client bank subsystem within the provider bank;

establishing a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank related to a low value payment in a particular country requested by a particular customer of the client bank;

debiting the customer account of the particular customer;

generating the low value payment in response to the payment instruction from the client bank

establishing a provider bank subsystem within the provider bank;

receiving the low value payment from the client bank subsystem;

transmitting the low value payment to a low value payment system in the particular country, whereby the particular customer of the client bank can make the low value payment even though the client bank does not have direct access to the low value payment system in the particular country;

establishing a second client bank subsystem within the provider bank, the second client bank subsystem effectuating international banking transactions for a second plurality of customers of a second client bank; and

establishing a second plurality of customer accounts corresponding to the second plurality of customers of the second client bank, wherein the second client bank subsystem and the provider bank subsystem operate to effectuate low value payments in response to instructions from the second client bank.

26. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing a client bank subsystem within the provider bank;

establishing a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank, wherein the payment instruction from the client bank relates to a high value payment;

debiting the customer account of the particular customer;

generating the high value payment in response to the payment instruction from the client bank

establishing a provider bank subsystem within the provider bank;

receiving the high value payment from the client bank subsystem; and

communicating the high value payment to a high value clearing system in the particular country, whereby the particular customer of the client bank can make the high value payment even though the client bank does not have direct access to the high value payment system in the particular country.

27. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing client bank subsystem within the provider bank;

establishing a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank, wherein the payment instruction from the client bank relates to a high value payment;

debiting the customer account of the particular customer;

generating, the high value payment in response to the payment instruction from the client bank

establishing a provider bank subsystem within the provider bank;

receiving the high value payment from the client bank subsystem;

performing a foreign exchange operation with respect to the high value payment prior to communicating the high value payment to a high value clearing system; and

communicating the high value payment to the high value clearing system in the particular country, whereby the particular customer of the client bank can make the high value payment even though the client bank does not have direct access to the high value payment system in the particular country.

28. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing a client bank subsystem within the provider bank;

establishing a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank related to a low value payment in a particular country requested by a particular customer of the client bank;

debiting the customer account of the particular customer;

generating the low value payment in response to the payment instruction from the client bank

establishing a provider bank subsystem within the provider bank;

receiving the low value payment from the client bank subsystem;

transmitting the low value payment to a low value payment system in the particular country, whereby the particular customer of the client bank can make the low value payment even though the client bank does not have direct access to the low value payment system in the particular country; and

performing liquidity management services with respect to the plurality of customer accounts.

29. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing a client bank subsystem within the provider bank;

establishing a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank related to a low value payment in a particular country requested by a particular customer of the client bank;

debiting the customer account of the particular customer;

generating the low value payment in response to the payment instruction from the client bank

establishing a provider bank subsystem within the provider bank;

receiving the low value payment from the client bank subsystem;

transmitting the low value payment to a low value payment system in the particular country, whereby the particular customer of the client bank can make the low value payment even though the client bank does not have direct access to the low value payment system in the particular country; and

performing liquidity management services with respect to the plurality of customer accounts comprising performing account balance sweeping.

30. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing a client bank subsystem within the provider bank;

establishing a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank related to a low value payment in a particular country requested by a particular customer of the client bank;

debiting the customer account of the particular customer;

generating the low value payment in response to the payment instruction from the client bank

establishing a provider bank subsystem within the provider bank;

receiving the low value payment from the client bank subsystem;

transmitting the low value payment to a low value payment system in the particular country, whereby the particular customer of the client bank can make the low value payment even though the client bank does not have direct access to the low value payment system in the particular country; and

performing liquidity management services with respect to the plurality of customer accounts compromising, performing zero balance sweeping.

31. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing a client bank subsystem within the provider bank;

establishing a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank related to a low value payment in a particular country requested by a particular customer of the client bank;

debiting the customer account of the particular customer;

generating the low value payment in response to the payment instruction from the client bank

establishing a provider bank subsystem within the provider bank;

receiving the low value payment from the client bank subsystem;

transmitting the low value payment to a low value payment system in the particular country, whereby the particular customer of the client bank can make the low value payment even though the client bank does not have direct access to the low value payment system in the particular country; and

performing liquidity management services with respect to the plurality of customer accounts comprising performing target balance sweeping.

32. A method by which a provider bank effectuates international banking transactions for a plurality of customers of a client bank, the method comprising:

establishing a client bank subsystem within the provider bank;

establishing, a plurality of customer accounts within the client bank subsystem, the plurality of customer accounts corresponding to the plurality of customers of the client bank;

receiving a payment instruction from the client bank related to a low value payment in a particular country requested by a particular customer of the client bank;

debiting the customer account of the particular customer;

generating the low value payment in response to the payment instruction from the client bank

establishing a provider bank subsystem within the provider bank;

receiving the low value payment from the client bank subsystem; and

transmitting the low value payment to a low value payment system in the particular country, whereby the particular customer of the client bank can make the low value payment even though the client bank does not have direct access to the low value payment system in the particular country;

performing liquidity management services with respect to the plurality of customer accounts comprising performing account pooling.