System and method for linked account having sweep feature

• US 8,015,084 B1
• Filed: 09/06/2000
• Issued: 09/06/2011
• Est. Priority Date: 09/06/2000
• 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: Fox, Steven J., Hirka, Jeffrey L.
• Primary Examiner(s): Kyle; Charles
• Assistant Examiner(s): Chencinski; Siegfried E.
• Application Number:
  US09/655,886
• Time in Patent Office: 4,017 Days
• Field of Search: 705/30, 705/33, 705/35, 705/36, 705/38, 705/39, 705/40, 705/41, 705/42, 705/43, 705/45
• US Class Current: 705/35
• CPC Class Codes: G06Q 20/04 Payment circuits
• 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 20/20 Point-of-sale [POS] network systems
• CPC Class Codes: G06Q 20/204 comprising interface for record bearing medium or carrier for electronic funds transfer or payment credit
• CPC Class Codes: G06Q 20/207 Tax processing
• 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 20/403 Solvency checks
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• 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: G07G 1/12 electronically operated digital data processing aspects G06Q20/00

Abstract

A linked account instrument is used to access funds in an existing demand deposit account held at a financial institution. Merchant or other transactions are first processed against a demand deposit account via an electronic authorization network. If the demand deposit account does not have sufficient funds, the transactions may be processed as a credit charge against a designated credit account. The demand deposit account may subsequently be swept at predetermined times in search of funds to defray the overdraft. If adequate funds are present, they will be withdrawn from the demand deposit account, and the credit account will be cleared. Otherwise, the instrument holder'"'"'s daily purchasing abilities may be temporarily suspended until the credit account is settled. The processing of overdraft amounts may be on a FIFO, smallest-first or other basis.

Claims

1. A system for processing electronic transactions, comprising:

a first interface to at least one cash account against which charges incurred through use of a linked account instrument are drawn;

a second interface to at least one credit account used to back said at least one cash account in the event of insufficient funds in said at least one cash account to cover the charges incurred through the use of the linked account instrument; and

an authorization server, communicating with the first interface and the second interface, the authorization server authorizing individual transactions against a pre-determined cumulative limit on said at least one cash account, and performing sweeps of said at least one cash account at predetermined times to determine whether said at least one cash account contains sufficient funds to cover the charges incurred through use of the linked account instrument.

2. The system of claim 1, wherein said at least one cash account comprises at least one demand deposit account.

3. The system of claim 1, wherein said at least one demand deposit account comprises a plurality of demand deposit accounts.

4. The system of claim 1, wherein said at least one cash account may be held at any financial institution.

5. The system of claim 1, wherein said at least one credit account comprises a plurality of credit accounts.

6. The system of claim 1, wherein said at least one credit account may be held at any financial institution.

7. The system of claim 6, wherein said at least one credit account has an associated credit line at least equal to the predetermined cumulative limit.

8. The system of claim 1, wherein the authorization server comprises at least one of an account information database, an account balance database, and a transaction history database.

9. The system of claim 1, wherein individual automated clearing house debits are generated for each transaction initiated with the linked account instrument.

10. The system of claim 9, wherein the automated clearing house debits are first processed against said at least one cash account via an automated clearing house.

11. The system of claim 10, wherein the automated clearing house debits are processed against said at least one cash account in the order in which they were generated.

12. The system of claim 10, wherein each automated clearing house debit is processed against said at least one cash account based on the relative size of its amount.

13. The system of claim 12, wherein the smallest debit amounts are processed against said at least one cash account first, leaving larger debits that cannot be satisfied by said at least one cash account to be processed against said at least one credit account.

14. The system of claim 12, wherein the largest debit amounts are processed against said at least one cash account first, leaving smaller debits that cannot be satisfied by said at least one cash account to be processed against said at least one credit account.

15. The system of claim 10, wherein an entire debit amount is processed against said at least one credit account in the event that there are funds in said at least one cash account that can only cover a percentage of the debit amount.

16. The system of claim 10, wherein a first percentage of the debit amount is processed against said at least one cash account, and a second percentage of the debit amount is processed against said at least one credit account in the event that there are funds in said at least one cash account that cannot satisfy the entire debit amount.

17. The system of claim 1, wherein the predetermined cumulative limit is a daily limit, and the authorization server is configured to decline to authorize additional transactions attempted with the linked account instrument once the daily limit has been reached.

18. The system of claim 17, wherein the authorization server is configured to cease authorizing transactions attempted with the linked account instrument if a first sweep of said at least one cash account finds insufficient funds to satisfy previous charges incurred through use of the linked account instrument.

19. The system of claim 18, wherein said at least one credit account used to back said at least one cash account will be cleared if a subsequent sweep of said at least one cash account finds adequate funds to satisfy those funds covered by said at least one credit account.

20. The system of claim 19, wherein the authorization server is configured to refresh the pre-determined cumulative limit and authorize transactions after said at least one credit account has been cleared.

21. The system of claim 20, wherein a user of the linked account instrument is charged a fee for use of said at least one credit account.

22. The system of claim 18, wherein the authorization server is configured to continue to cease authorizing transactions attempted with the linked account instrument if a predetermined number of subsequent sweeps of said at least one cash account fail to find sufficient funds to satisfy the charges incurred through use of the linked account instrument.

23. The system of claim 17, wherein the authorization server is configured to continue to authorize linked account card transactions up to the predetermined cumulative limit against available credit on the credit account, even if a first sweep of the cash account finds insufficient funds to satisfy previous charges.

24. The system of claim 1, wherein said authorization server is further configured to automatically withdraw funds from said at least one cash account to cover at least part of the charges incurred through use of the linked account instrument.

25. A system for processing electronic transactions, comprising:

a first interface to at least one cash account against which charges incurred through use of a linked account instrument are drawn;

a second interface to at least one credit account used to back said at least one cash account in the event of insufficient funds in said at least one cash account to cover the charges incurred through the use of the linked account instrument; and

an authorization server, communicating with the first interface and the second interface, the authorization server authorizing individual transactions against a pre-determined cumulative limit on said at least one cash account, performing sweeps wherein funds are withdrawn from said at least one cash account at predetermined times, and, if funds are not available from said at least one cash account, using the at least one credit account until the at least one cash account contains sufficient funds to cover the charges incurred through use of the linked account instrument.