Method and system for dynamically adjusting discount rates for a card transaction

• US 7,925,583 B2
• Filed: 11/23/2009
• Issued: 04/12/2011
• Est. Priority Date: 08/18/2003
• 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: Partel, Frank J. Jr., Heasley, Philip G.
• Primary Examiner(s): Felten; Daniel S
• Assistant Examiner(s): RANKINS, WILLIAM E
• Application Number:
  US12/623,544
• Publication Number:
  US 20100070359A1
• Time in Patent Office: 505 Days
• Field of Search: 705 39- 41
• US Class Current: 705/38
• 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 30/0215 Including financial accounts
• 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

According to one embodiment, the present invention relates to a method and a system for dynamically adjusting discount rates for a closed loop transaction. A computer implemented method for dynamically adjusting discount rates for a card transaction comprises the steps of identifying credit worthiness of at least one consumer; assigning a credit level to a line of credit associated with a credit product for the at least one consumer wherein the credit product is accepted at an identified one or more merchants; assigning a financing charge to the line of credit; determining a discount rate based at least in part on the credit worthiness of the at least one consumer; and applying the discount rate when at least one transaction is made with the credit product; wherein the applied discount rate is adjusted based on the credit worthiness of the at least one consumer.

Claims

1. An automated computer implemented method for dynamically adjusting discount rates for a card transaction, wherein the method is executed by a programmed computer processor, the computer implemented method comprising the steps of:

identifying credit worthiness of at least one consumer, at an issuing module using the programmed computer processor;

assigning a credit level to a line of credit associated with a credit product for the at least one consumer, at the issuing module using the programmed computer processor, wherein the credit product is accepted at an identified one or more merchants, wherein at least one of the identified one or more merchants is within a closed loop network;

assigning a financing charge to the line of credit, at the issuing module using the programmed computer processor;

determining a discount rate for at least one transaction based at least in part on the credit worthiness of the at least one consumer and based at least in part on merchant-related data, using the programmed computer processor; and

applying the discount rate when the at least one transaction is made with the credit product at the identified one or more merchants within the closed loop network, at the rate determining module using the programmed computer processor, wherein the discount rate is paid by the identified one or more merchants;

wherein the discount rate is dynamically adjusted as the credit worthiness of the at least one consumer changes.

2. The method of claim 1, wherein the credit worthiness is determined by a FICO risk score.

3. The method of claim 1, wherein the step of determining the discount rate is based at least in part on the credit worthiness of the at least one consumer further comprises the step of:

determining the discount rate based at least in part on merchant-related data comprising at least one of sales data, inventory data, economy data, type of channel and type of merchandise.

4. The method of claim 3, further comprising the step of:

dynamically adjusting the discount rate as the merchant-related data is adjusted.

5. The method of claim 1, wherein a transaction type is identified at a point of sale for routing the transaction to an appropriate network.

6. The method of claim 1, wherein the step of determining a discount rate involves assigning a table of discount rates and selecting the appropriate discount rate for each transaction.

7. The method of claim 1, wherein the at least one consumer represents a class of consumers.

8. A computer implemented system for dynamically adjusting discount rates for a card transaction, the computer implemented system comprising:

a processor;

an issuing module for identifying credit worthiness of at least one consumer;

assigning a credit level to a line of credit associated with a credit product for the at least one consumer wherein the credit product is accepted at an identified one or more merchants within a closed loop network; and

assigning a financing charge to the line of credit; and

a rate determining module for determining a discount rate for at least one transaction based at least in part on the credit worthiness of the at least one consumer and based at least in part on merchant-related data; and

applying the discount rate when the at least one transaction is made with the credit product at the identified one or more merchants within the closed loop network, wherein the discount rate is paid by the identified one or more merchants;

wherein the discount rate is dynamically adjusted as the credit worthiness of the at least one consumer; and

wherein the processor, the issuing module, the rate determining module are interoperatively connected.

9. The system of claim 8, wherein the credit worthiness is determined by a FICO risk score.

10. The system of claim 8, wherein the discount rate is further based at least in part on merchant-related data comprising at least one of sales data, inventory data, economy data, type of channel and type of merchandise.

11. The system of claim 10, wherein the discount rate is dynamically adjusted as the merchant-related data is adjusted.

12. The system of claim 8, wherein a transaction type is identified at a point of sale for routing the transaction to an appropriate network.

13. The system of claim 8, wherein the rate determining module assigns a table of discount rates and identifies the appropriate discount rate for each transaction.

14. The system of claim 8, wherein the at least one consumer represents a class of consumers.

15. An automated computer implemented method for dynamically adjusting discount rates for a card transaction, wherein the method is executed by a programmed computer processor, the computer implemented method comprising the steps of:

identifying credit worthiness of at least one consumer, at an issuing module using the programmed computer processor;

assigning a credit level to a line of credit associated with the credit product, at the issuing module using the programmed computer processor, wherein the line of credit is for general use within a card association network;

assigning a financing charge to the line of credit, at the issuing module using the programmed computer processor;

determining a discount rate for at least one transaction based at least in part on the credit worthiness of the at least one consumer and based at least in part on merchant-related data, using the programmed computer processor; and

applying the discount rate when the at least one transaction is made with the credit product, at the rate determining module using the programmed computer processor;

wherein the discount rate is dynamically adjusted as the credit worthiness of the at least one consumer changes.

16. The method of claim 15, wherein the line of credit is dynamically adjusted.

17. The method of claim 15, wherein an interchange fee associated with the line of credit is based at least in part on the credit worthiness of the at least one consumer.

18. The method of claim 17, wherein the interchange fee is dynamically adjusted as the credit worthiness of the at least one consumer fluctuates.

19. A computer implemented system for dynamically adjusting discount rates for a card transaction, the computer implemented system comprising:

a processor;

an issuing module for identifying credit worthiness of at least one consumer;

assigning a credit level to a line of credit associated with the credit product wherein the line of credit is for general use within a card association network; and

assigning a financing charge to the line of credit; and

a rate determining module for determining a discount rate for at least one transaction based at least in part on the credit worthiness of the at least one consumer and based at least in part on merchant-related data; and

applying the discount rate when the at least one transaction is made with the credit product;

wherein the discount rate is dynamically adjusted as the credit worthiness of the at least one consumer; and

wherein the processor, the issuing module, the rate determining module are interoperatively connected.

20. The system of claim 19, wherein the line of credit is dynamically adjusted.

21. The system of claim 19, wherein an interchange fee associated with the line of credit is based at least in part on the credit worthiness of the at least one consumer.

22. The system of claim 21, wherein the interchange fee is dynamically adjusted as the credit worthiness of the at least one consumer fluctuates.

23. An automated computer implemented method for dynamically adjusting discount rates for a card transaction, wherein the method is executed by a programmed computer processor, the computer implemented method comprising the steps of:

identifying credit worthiness of at least one consumer, at an issuing module using the programmed computer processor;

assigning a credit level to a line of credit associated with a credit product for the at least one consumer, at the issuing module using the programmed computer processor, wherein the credit product is accepted at an identified one or more merchants;

assigning a financing charge to the line of credit, at the issuing module using the programmed computer processor;

determining a discount rate for at least one transaction based at least in part on the credit worthiness of the at least one consumer and based at least in part on merchant-related data, using the programmed computer processor; and

applying the discount rate when the at least one transaction is made with the credit product, at the rate determining module using the programmed computer processor;

wherein the discount rate is dynamically adjusted as the credit worthiness of the at least one consumer changes.