Value processing network and methods

• US 8,086,539 B2
• Filed: 06/11/2003
• Issued: 12/27/2011
• Est. Priority Date: 06/11/2002
• Status: Active Grant

• Current Assignee: First Data Corporation (Fiserv Incorporated)
• Original Assignee: Western Union
• Inventors: Nauman, George, Turek, Judy, Swartz, Doug, Abel, Vicki
• Primary Examiner(s): Fischer, Andrew J.
• Assistant Examiner(s): DEGA, MURALI K
• Application Number:
  US10/460,741
• Publication Number:
  US 20040039693A1
• Time in Patent Office: 3,121 Days
• Field of Search: 705 50- 79
• US Class Current: 705/64
• CPC Class Codes: G06Q 20/02 involving a neutral party, e.g. certification authority, notary or trusted third party [TTP]
• 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 20/3674 involving authentication
• CPC Class Codes: G06Q 20/382 insuring higher security of transaction
• CPC Class Codes: G06Q 20/401 Transaction verification
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions

Abstract

A method of processing a transaction involving at least two parties includes establishing rules that define transaction processing between combinations of a plurality of origination entities and a plurality of destination entities and storing the rules at a storage arrangement associated with a host computer system. The method also includes receiving at the host computer system transaction information relating to the transaction between the two parties. One of the parties is a particular one of the origination entities and one of the parties is a particular one of the destination entities. The transaction information contains at least an identifier from which at least one of the parties may be identified. The method also includes using the transaction information at the host computer system to identify at least one of the parties and consulting the storage arrangement to determine the rules that define transaction processing for the at least one party. The method also includes processing the transaction based, at least in part, on the rules.

Claims

1. A method of processing a transaction involving at least two parties, the method comprising:

establishing rules that define transaction processing between combinations of a plurality of origination entities and a plurality of destination entities;

storing the rules at a storage arrangement associated with a host computer system;

receiving at the host computer system transaction information relating to the transaction between the two parties, wherein;

the transaction comprises a financial transaction involving a credit account,

one of the parties comprises a particular one of the origination entities that is a merchant bank,

one of the parties comprises a particular one of the destination entities that is an issuing bank,

the transaction information contains at least a credit account identifier from which at least one of the parties may be identified, and

the merchant bank is a financial entity that processes transactions on behalf of a merchant;

at the host computer system, using the transaction information to identify at least one of the parties and to identify that at least one of the parties belongs to a card association network, wherein the card association network comprises a computer processing system that routes and settles financial transactions;

consulting the storage arrangement to determine the rules that define transaction processing for the at least one party;

determining from the rules that the transaction is allowed to be settled outside of the card association network; and

processing the transaction based, at least in part, on the rules by requesting funds from the issuing bank to pay the merchant bank using rules directly established between the merchant bank and the issuing bank outside of the card association network.

2. The method according to claim 1, wherein the rules define one or more of:

routing of the transaction, fees associated with the transaction, timing of settlement, method of settlement, aggregation and reporting, dispute resolution, compliance, fraud detection, and risk sharing.

3. The method according to claim 1, wherein the transaction relates to a selection from the group consisting of credit card transaction, retail card transaction, debit card transaction, account withdrawal, money transfer, gift card, negotiable instrument, loyalty or reward points, pre-paid commodities, insurance benefits, cell-phone minutes, stored value card, and discount certificate.

4. The method according to claim 1, wherein receiving transaction information comprises receiving an electronic message or transmission from a transaction processing device.

5. The method according to claim 4, wherein the transaction processing device comprises a selection from the group consisting of an automated teller machine, a merchandise scanner, a point-of-sale device, a data entry device, a Radio Frequency (RF) fob, a point-of-sale computer, a money transfer device, a telephone and a PDA.

6. The method according to claim 1, wherein processing the transaction comprises:

forwarding information representing at least a portion of the transaction to a network or a destination processing system.

7. The method according to claim 6, wherein the network comprises one or more of the Automated Clearing House network, the Federal Reserve network, a branded network, a banking network, an international banking network, a money transfer network, a loyalty network, a health care benefits network, a discount certificate clearinghouse, and the Internet.

27. The method according to claim 1, wherein the plurality of origination entities and the plurality of destination entities are selected from a group of entities, consisting of:

merchants, acquiring banks, gift card or stored value processors, health care providers, airlines, and telephone companies.

8. A system for processing a transaction involving at least two parties, the system comprising:

a host computer system; and

a storage arrangement, wherein the storage arrangement is configured to store rules that define transaction processing between combinations of a plurality of origination entities and a plurality of destination entities;

wherein the host computer is programmed to;

receive transaction information relating to the transaction between the two parties, wherein;

the transaction comprises a financial transaction involving a financial account;

one of the parties comprises a particular one of the origination entities that is a merchant bank;

one of the parties comprises a particular one of the destination entities that is an issuing bank;

the transaction information contains at least a financial account identifier from which at least one of the parties may be identified; and

the merchant bank is a financial entity that processes transactions on behalf of a merchant;

use the transaction information to identify at least one of the parties and to determine whether the at least one of the parties belongs to a card association network;

consult the storage arrangement to determine the rules that define transaction processing for the at least one of the parties;

determine from the rules that the transaction is allowed to be settled outside of the association network, wherein the card association network comprises a computer processing system that routes and settles financial transactions; and

cause the transaction to be processed based, at least in part, on the rules by requesting funds from the issuing bank to pay the merchant bank using rules directly established between the two banks outside of the association network.

9. The system according to claim 8, wherein, in receiving transaction information, the host computer system is further programmed to receive an electronic message or transmission from a transaction initiation device.

10. The system according to claim 9, wherein the transaction initiation device comprises a selection from the group consisting of an automated teller machine, a merchandise scanner, a point-of-sale device, a point-of-sale computer, a data entry device, a Radio Frequency (RF) fob, a money transfer device, a telephone and a PDA.

11. The system according to claim 8, wherein, in causing the transaction to be processed, the host computer system is further programmed to forward information representing at least a portion of the transaction to a destination computer processing system.

12. The system according to claim 11, wherein the destination computer processing system comprises one or more of the Automated Clearing House network, the Federal Reserve network, a branded network, a banking network, a money transfer network, an international banking network, a loyalty network, a health care benefits network, a discount certificate clearinghouse, and the Internet.

13. A network for processing transactions, comprising:

a host computer system that is programmed to;

store transaction processing rules, using a storage arrangement, that define transaction processing between combinations of a plurality of origination entities and a plurality of settlement entities;

receive transaction information from a transaction initiation device, wherein;

the transaction information relates to a financial transaction involving at least two parties and a financial account;

the parties have a pre-established relationship embodied in transaction processing rules;

the transaction information comprises at least a financial identifier for determining at least one party to the transaction;

a first party of the parties comprises a particular one of the origination entities that is a merchant bank,

a second party of the parties comprises a particular one of the destination entities that is an issuing bank, and

the merchant bank is a financial entity that processes transactions on behalf of a merchant;

consult the storage arrangement to determine the transaction processing rules that define transaction processing for at least one of the parties;

determine that at least one of the parties belongs to a card association network, wherein the card association network comprises a computer processing system that routes and settles financial transactions;

determine the rules relating to the transaction and that the transaction is allowed to proceed outside of the card association network; and

process at least in part, the transaction by requesting funds from the second party and to send funds to the first party outside of the card association network.

14. A computerized method of processing a transaction involving two parties wherein:

the parties have a pre-established relationship regarding how to process a financial transaction outside of a card association network embodied in rules relating to the relationship,

a first party of the parties comprises an origination entity that is a merchant bank,

a second party of the parties comprises a destination entity that is an issuing bank, and

the merchant bank is a financial entity that processes transactions on behalf of a merchant;

the card association network comprises a computer processing system that routes and settles financial transactions, the method comprising;

receiving transaction information relating to the transaction at a host computer system, wherein the transaction information comprises a financial transaction involving an account identifier;

identifying the first party and the second party at least in part from the transaction information;

consulting a database containing the rules to determine how the transaction should be processed; and

determining whether the rules permit the financial transaction to be processed outside of the card association network; and

processing the transaction based at least in part on the rules by requesting funds from the second party and sending funds to the first party outside of the card association network.

15. The method of claim 14, wherein the second party comprises a selection from the group consisting of issuing financial institution, money transfer service provider, telephone company, airline, loyalty or rewards provider, manufacturer, insurance company, and retailer bank.

16. The method of claim 14, wherein the transaction involves value, and wherein the value is represented by a selection from the group consisting of bank card account number, credit card account number, discount certificate, bank account number, debit card account number, stored value account number, insurance coverage identifier, money transfer identifier, loyalty account identifier, telephone account number, airline ticket PNR identifier, and gift card identifier.

17. The method of claim 16, wherein the value comprises a selection from the group consisting of money, credits, loyalty points, minutes, miles, and insurance benefits.

18. The method of claim 14, further comprising:

receiving additional rules from a third party that comprises a destination entity; and

processing a second transaction according to the additional rules.

19. The method of claim 14, further comprising identifying processing rules relating to the second party.

20. The method of claim 19, wherein identifying processing rules comprises consulting a table having rules information relating to a plurality of destination entities.

21. The method of claim 14, wherein processing the transaction comprises aggregating a plurality of transactions having a common destination entity and sending a request for reimbursement to the second party.

22. The method of claim 14, wherein processing the transaction comprises aggregating a plurality of transactions having a common origination entity and sending a reimbursement to the first party.

23. A system for processing a value transaction between an origination entity and a destination entity outside of a financial processing network, wherein the financial processing network comprises a computer processing system that routes and settles financial transactions, the system comprising:

an input transaction handler configured to execute instructions residing on at least one non-transitory computer-readable storage medium, wherein;

the instructions cause the input transaction handler to determine a transaction type according to a ruleset obtained from a rules service based on the origination entity;

the origination entity comprises a merchant bank;

the destination entity comprises an issuing bank; and

the merchant bank is a financial entity that processes transactions on behalf of a merchant;

a routing service configured to execute instructions residing on the at least one non-transitory computer-readable storage medium, wherein;

the instructions cause the routing service to identify the destination entity using rules for the transaction type; and

the routing service determines whether the transaction type may is allowed to be processed outside of the financial processing network;

a fee calculation service configured to execute instructions residing on the at least one non-transitory computer-readable storage medium, wherein;

the instructions cause the fee calculation service to determine a fee to apply based on rules identified by a relationship between the origination entity and the destination entity and attaches fee information to the transaction; and

an output transaction handler configured to execute instructions residing on the at least one non-transitory computer-readable storage medium, wherein;

the instructions cause the output transaction handler to format, validate, and send the transaction based on rules determined by the identity of the destination entity outside of the financial processing network.

24. The system of claim 23, further comprising:

a transaction aggregation service configured to execute instructions residing on the at least one non-transitory computer-readable storage medium, wherein the instructions cause the transaction aggregation service to use rules to determine how the origination entity and the destination entity require transaction information to be combined for their businesses, which includes both transaction grouping and transaction summarization.

25. The system of claim 24, further comprising a reconciliation service configured to execute instructions residing on the at least one non-transitory computer-readable storage medium, wherein the instructions cause the transaction reconciliation service to use information from the transaction aggregation service to balance multiple transactions according to rules for the transaction types.

26. The system of claim 25, further comprising a funds movement service configured to execute instructions residing on the at least one non-transitory computer-readable storage medium, wherein the instructions cause the funds movement service to generate instructions based upon the rules defined by origination and destination entities for an actual value-exchange represented by a particular group of transactions.