Method and apparatus for allowing secured overdrafts of reloadable debit card accounts

• US 8,027,919 B2
• Filed: 02/01/2007
• Issued: 09/27/2011
• Est. Priority Date: 02/01/2006
• Status: Active Grant

• Current Assignee: Telicash
• Original Assignee: Sean Macguire
• Inventors: MACGUIRE, SEAN
• Primary Examiner(s): Subramanian, Narayanswamy
• Assistant Examiner(s): Robinson, Kito R
• Application Number:
  US11/701,174
• Publication Number:
  US 20070219900A1
• Time in Patent Office: 1,699 Days
• Field of Search: 705/39, 705/41, 705/35
• US Class Current: 705/41
• CPC Class Codes: G06Q 20/105 involving programming of a portable memory device, e.g. IC cards, "electronic purses"
• CPC Class Codes: G06Q 20/22 Payment schemes or models
• 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
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof

Abstract

The invention discloses a reloadable debit card which may be overdrawn by authorized merchants thus allowing future and recurring payments to be made via ACH transactions against this debit card. In addition, the cardholder may repay indebtedness simply by depositing funds onto the reloadable debit card.

Claims

1. A method for providing overdraft funds to at least one user, the method comprising the steps of:

a) pre-authorizing a merchant for overdraft transactions;

b) having the user conduct a purchase using a reloadable debit card issued by an entity;

c) wherein when the debit card carries insufficient funds to cover the purchase, electronically overdrawing the debit card by an overdraft amount using a communication means, the overdraft amount being the difference between the cost of the purchase and the funds available in the debit card;

d) the entity electronically depositing the overdraft amount in a secure account using the communication means; and

,

e) once the user provides to the entity a reimbursement corresponding to the overdraft amount or part thereof the reimbursement is paid to the merchant from the secure account.

2. A method as defined in claim 1, wherein in step d), the user reimburses with additional charges, such as a penalty fee or interest.

3. A method as defined in claim 1, wherein in step b), the purchase is conducted at a merchant, and wherein in step c), it is verified that the merchant is authorized for overdrafts before the debit card is overdrawn.

4. A method as defined in claim 1, wherein in step e), the user reimburses the overdraft amount with at least one deposit made to the debit card, with at least one amount being taken from the debit card until the overdraft amount has been fully reimbursed, including any additional charges, such as a penalty fee or interest.

5. A method as defined in claim 1, wherein the step of authorizing a merchant for overdraft transactions comprises authorizing a plurality of merchants, each merchant from the plurality of merchants having a priority rank, the payment of any reimbursement being made in step e) in accordance with the priority rank of the merchants.

6. A method as defined in claim 1, wherein overdrawing the debit card is a plurality of overdrawings defining an overdrawing sequence, the reimbursement in step e) each overdrawing from the plurality of overdrawings being made in accordance with the overdrawing sequence.

7. A method as defined in claim 6, wherein the oldest overdrawing is first reimbursed.

8. The method of claim 1 wherein the step of electronically depositing the overdraft amount in a secure account using a communication network comprises utilizing the Internet.

9. The method of claim 1, wherein the secure account is jointly held by the merchant and the entity.

10. The method of claim 1, wherein the entity is a financial institution.

11. A method for providing overdraft funds to at least one user, the method comprising the steps of:

a) pre-authorizing a merchant for overdraft transactions;

b) having the user conduct a purchase using a reloadable debit card;

c) wherein when the debit card carries insufficient funds to cover the purchase, electronically overdrawing the debit card by an overdraft amount over a communication means, the overdraft amount being the difference between the cost of the purchase and the funds available in the debit card;

d) securingly setting aside the overdraft amount; and

e) once the user provides a reimbursement corresponding to the overdraft amount or part thereof, paying the reimbursement to the merchant.