Methods and systems for managing merchant screening

• US 8,271,392 B2
• Filed: 04/01/2009
• Issued: 09/18/2012
• Est. Priority Date: 04/04/2008
• Status: Active Grant

• Current Assignee: Mastercard International Incorporated (MasterCard Incorporated)
• Original Assignee: Mastercard International Incorporated (MasterCard Incorporated)
• Inventors: Tomchek, Brad Michael, Chong, Jill E., Rausaria, Suman, Bone, Cathrine Lee, McCorkell, Linda L., Wong, Shoon Ping, Smith, Janet
• Primary Examiner(s): Reagan, James A
• Assistant Examiner(s): CHEUNG, CALVIN K
• Application Number:
  US12/416,728
• Publication Number:
  US 20090254463A1
• Time in Patent Office: 1,266 Days
• Field of Search: 705/64
• US Class Current: 705/64
• CPC Class Codes: G06Q 20/12 specially adapted for electronic shopping systems
• CPC Class Codes: G06Q 20/2295 Parent-child type, e.g. where parent has control on child rights
• CPC Class Codes: G06Q 20/24 Credit schemes, i.e. "pay after"
• 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 20/4037 Remote solvency checks
• CPC Class Codes: G06Q 30/0283 Price estimation or determination
• 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 40/12 Accounting
• CPC Class Codes: H04L 63/101 Access control lists [ACL]

Abstract

A method and system for processing a financial transaction using a payment card through a third-party interchange network is provided. The financial transaction is initiated by a cardholder at a merchant location. The method includes storing a list of private label participating merchants, receiving an authorization request for the transaction involving the payment card wherein the authorization request includes a merchant location identifier for the merchant location where the transaction occurred, performing a merchant screening process on the transaction including validating the transaction as originating at a private label participating merchant location, manipulating at the interchange network the authorization request to include a private label identifier when the transaction is determined to have originated at one of the participating merchants, and transmitting the manipulated authorization request with the private label identifier to an issuer of the payment card for processing as a private label transaction.

Claims

1. A computer-based method for processing a financial transaction using a payment card through a third-party interchange network, the financial transaction initiated by a cardholder at a merchant location, the payment card issued by an issuer to the cardholder, said method comprising:

storing within a computer database a list of private label participating merchants including a merchant location identifier identifying each location of each private label participating merchant included on the list, the computer database in communication with the interchange network;

receiving, at an interchange network computer, an authorization request for the transaction involving the payment card, the authorization request including a data field for storing a merchant location identifier for the merchant location where the transaction occurred;

performing a merchant screening process on the transaction including validating the transaction as originating at a private label participating merchant location by comparing the received merchant location identifier to the list of private label participating merchants stored within the computer database;

manipulating, at the interchange network computer, the authorization request to include a private label identifier when the transaction is determined to have originated at one of the participating merchants; and

transmitting the manipulated authorization request with the private label identifier to the issuer for processing as a private label transaction.

2. A computer-based method according to claim 1 wherein storing within a computer database further comprises:

storing account data within the computer database, the account data including each account number registered with the interchange network for receiving the merchant screening process.

3. A computer-based method according to claim 2 wherein receiving, at an interchange network computer, an authorization request further comprises:

receiving the authorization request including the account number associated with the payment card used in the transaction; and

determining whether to apply the merchant screening process to the transaction by comparing the received account number to the account numbers stored within the database.

4. A computer-based method according to claim 2 wherein storing account data within the computer database further comprises:

assigning a range of account numbers to the issuer by the interchange network, the range of account numbers designated for receiving the merchant screening process;

associating an account number from the range of account numbers with the payment card;

storing the range of account numbers in the computer database;

receiving the authorization request including the account number associated with the payment card used in the transaction; and

applying the merchant screening process to the transaction based on the received account number.

5. A computer-based method according to claim 4 wherein applying the merchant screening process further comprises:

determining whether the account number associated with the payment card is registered as a private label account number;

if the account number is registered as a private label account number, then determining whether the transaction originated at a private label participating merchant location before transmitting the authorization request to the issuer as a private label transaction; and

if the account number is not registered as a private label account number, then transmitting the authorization request to the issuer as a business-as-usual transaction.

6. A computer-based method according to claim 1 wherein performing a merchant screening process further comprises:

determining that the payment card is associated with a private label account;

determining whether the authorization request includes at least one of a card acceptor identifier and a third-party processor identifier; and

denying the authorization request if the authorization request does not include the at lease one of the card acceptor identifier and the third-party processor identifier.

7. A computer-based method according to claim 1 wherein performing a merchant screening process further comprises:

determining that the payment card is associated with a private label account;

determining that the authorization request includes a merchant location identifier, the merchant location identifier including at least one of a card acceptor identifier and a third-party processor identifier; and

validating the transaction as originating at a private label participating merchant location by comparing the received merchant location identifier to the list of private label participating merchants stored within the database.

8. A computer-based method according to claim 1 wherein manipulating, at the interchange network computer, the authorization request further comprises:

populating a product code data field included within the authorization request with the private label identifier after determining the transaction originated at one of the participating merchants.

9. A computer-based method according to claim 1 further comprising:

receiving, at the interchange network computer, an authorization response generated by the issuer, the authorization response including the private label identifier and approval data, wherein the approval data includes confirmation from the issuer that the cardholder has sufficient funds to settle the transaction.

10. A computer-based method according to claim 9 wherein the merchant is in communication with an acquirer, and the acquirer is in communication with the interchange network, and wherein the method further comprises:

transmitting the authorization response with the private label identifier from the interchange network computer to the acquirer, wherein the authorization response is further transmitted to the participating merchant to approve the transaction, and wherein the authorization response instructs the acquirer to designate the transaction as a private label transaction.

11. A computer-based method according to claim 1 wherein the merchant is in communication with an acquirer, and the acquirer is in communication with the interchange network, and wherein the method further comprises:

receiving settlement data from the acquirer corresponding to the transaction, the settlement data including the private label identifier for identifying the settlement data for processing as a private label transaction, wherein the settlement data represents monetary funds being transferred between the issuer, the acquirer and the participating merchant for completing the transaction.

12. A computer-based method according to claim 11 further comprising:

determining, at the interchange network computer, that the settlement data received from the acquirer is identified as being associated with a private label transaction;

determining a private label interchange rate for the private label transaction; and

processing the private label transaction at the interchange network at the private label interchange rate.

13. A network-based system for processing a financial transaction using a payment card through a third-party interchange network, the financial transaction initiated by a cardholder at a merchant location, the payment card issued by an issuer to the cardholder, said system comprising:

an acquirer computer system;

an issuer computer system;

a database; and

a server system configured to be coupled to the acquirer computer system, the issuer computer system, and the database, said interchange network server system, said server system configured to;

store within the database a list of private label participating merchants including a merchant location identifier identifying each location of each private label participating merchant included on the list;

receive from the acquirer computer system an authorization request for the transaction involving the payment card, the authorization request including a data field for storing a merchant location identifier for the merchant location where the transaction occurred;

perform a merchant screening process on the transaction including validating the transaction as originating at a private label participating merchant location by comparing the received merchant location identifier to the list of private label participating merchants stored within the database;

manipulate the authorization request to include a private label identifier when the transaction is determined to have originated at one of the participating merchants; and

transmit the manipulated authorization request with the private label identifier to the issuer computer system for processing as a private label transaction.

14. A system according to claim 13 wherein said server system is further configured to:

assign a range of account numbers to the issuer, the range of account numbers designated for receiving the merchant screening process;

associate an account number from the range of account numbers with the payment card;

store the range of account numbers in the database;

receive from the acquirer computer system the authorization request including the account number associated with the payment card used in the transaction; and

apply the merchant screening process to the transaction based on the received account number.

15. A system according to claim 14 wherein said server system is further configured to:

determine whether the account number associated with the payment card is registered as a private label account number;

determine that the transaction originated at a private label participating merchant location before transmitting the authorization request to the issuer computer system as a private label transaction when the account number is registered as a private label account number; and

transmit the authorization request to the issuer computer system as a business-as-usual transaction when the account number is not registered as a private label account number.

16. A system according to claim 13 wherein said server system is further configured to:

determine that the payment card is associated with a private label account;

determine whether the authorization request includes at least one of a card acceptor identifier and a third-party processor identifier;

deny the authorization request if the authorization request does not include the at lease one of the card acceptor identifier and the third-party processor identifier; and

transmit a denial message to the acquirer computer system.

17. A system according to claim 13 wherein said server system is further configured to:

determine that the payment card is associated with a private label account;

determine that the authorization request received from the acquirer computer system includes a merchant location identifier, the merchant location identifier including at least one of a card acceptor identifier and a third-party processor identifier; and

validate the transaction as originating at a private label participating merchant location by comparing the received merchant location identifier to the list of private label participating merchants stored within the database.

18. A system according to claim 13 wherein said server system is further configured to:

receive an authorization response generated by the issuer computer system, the authorization response including the private label identifier and approval data, wherein the approval data includes confirmation from the issuer that the cardholder has sufficient funds to settle the transaction.

19. A system according to claim 18 wherein said server system is further configured to:

transmit the authorization response with the private label identifier to the acquirer computer system, wherein the authorization response is further transmitted to the participating merchant to approve the transaction, and wherein the authorization response instructs the acquirer to designate the transaction as a private label transaction.

20. A system according to claim 13 wherein said server system is further configured to:

receive settlement data from the acquirer computer system corresponding to the transaction, the settlement data including the private label identifier for identifying the settlement data for processing as a private label transaction, wherein the settlement data represents monetary funds being transferred between the issuer, the acquirer and the participating merchant for completing the transaction.

21. A system according to claim 20 wherein said server system is further configured to:

determine that the settlement data received from the acquirer computer system is identified as being associated with a private label transaction;

determine a private label interchange rate for the private label transaction; and

process the private label transaction at the private label interchange rate.

22. A computer for processing a financial transaction initiated by a cardholder at a merchant location using a payment card, the third-party interchange network computer, the payment card issued by an issuer to a cardholder, said computer having a memory, said computer programmed to:

store within the memory a list of private label participating merchants including a merchant location identifier identifying each location of each private label participating merchant included on the list;

receive an authorization request for the transaction involving the payment card, the authorization request including a data field for storing a merchant location identifier for the merchant location where the transaction occurred;

perform a merchant screening process on the transaction including validating the transaction as originating at a private label participating merchant location by comparing the received merchant location identifier to the list of private label participating merchants stored within the memory;

manipulate the authorization request to include a private label identifier when the transaction is determined to have originated at one of the participating merchants; and

transmit the manipulated authorization request with the private label identifier to the issuer for processing as a private label transaction.

23. A computer according to claim 22 wherein said computer is programmed to:

store account data within the memory, the account data including each account number registered with the interchange network for receiving the merchant screening process.

24. A computer according to claim 23 wherein said computer is programmed to:

receive the authorization request including the account number associated with the payment card used in the transaction; and

determine whether to apply the merchant screening process to the transaction by comparing the received account number to the account numbers stored within the memory.

25. A computer according to claim 23 wherein said computer is programmed to:

assign a range of account numbers to the issuer, the range of account numbers designated for receiving the merchant screening process;

associate an account number from the range of account numbers with the payment card;

store the range of account numbers in the memory;

receive the authorization request including the account number associated with the payment card used in the transaction; and

apply the merchant screening process to the transaction based on the received account number.

26. A computer according to claim 25 wherein said computer is programmed to:

determine whether the account number associated with the payment card is registered as a private label account number;

if the account number is registered as a private label account number, determine whether the transaction originated at a private label participating merchant location before transmitting the authorization request to the issuer as a private label transaction; and

if the account number is not registered as a private label account number, transmit the authorization request to the issuer as a business-as-usual transaction.

27. A computer according to claim 22 wherein said computer is programmed to:

determine that the payment card is associated with a private label account;

determine whether the authorization request includes at least one of a card acceptor identifier and a third-party processor identifier; and

deny the authorization request if the authorization request does not include the at lease one of the card acceptor identifier and the third-party processor identifier.

28. A computer according to claim 22 wherein said computer is programmed to:

determine that the payment card is associated with a private label account;

determine that the authorization request includes a merchant location identifier, the merchant location identifier including at least one of a card acceptor identifier and a third-party processor identifier; and

validate the transaction as originating at a private label participating merchant location by comparing the received merchant location identifier to the list of private label participating merchants stored within the memory.

29. A computer according to claim 22 wherein said computer is programmed to:

populate a product code data field included within the authorization request with the private label identifier after determining the transaction originated at one of the participating merchants.

30. A computer according to claim 22 wherein said computer is programmed to:

receive an authorization response generated by the issuer, the authorization response including the private label identifier and approval data, wherein the approval data includes confirmation from the issuer that the cardholder has sufficient funds to settle the transaction.

31. A computer according to claim 30 wherein the merchant is in communication with an acquirer, and the acquirer is in communication with said computer, and said computer is programmed to:

transmit the authorization response with the private label identifier to the acquirer, wherein the authorization response is further transmitted to the participating merchant to approve the transaction, and wherein the authorization response instructs the acquirer to designate the transaction as a private label transaction.

32. A computer according to claim 22 wherein the merchant is in communication with an acquirer, and the acquirer is in communication with said computer, and said computer is programmed to:

receive settlement data from the acquirer corresponding to the transaction, the settlement data including the private label identifier for identifying the settlement data for processing as a private label transaction, wherein the settlement data represents monetary funds being transferred between the issuer, the acquirer and the participating merchant for completing the transaction.

33. A computer according to claim 32 wherein said computer is programmed to:

determine that the settlement data received from the acquirer is identified as being associated with a private label transaction;

determine a private label interchange rate for the private label transaction; and

process the private label transaction at the private label interchange rate.

34. A computer program embodied on a non-transitory computer readable medium for processing a financial transaction using a payment card and a third-party interchange network computer, the financial transaction initiated by a cardholder at a merchant location, the payment card issued by an issuer to the cardholder, said program is executed by the interchange network computer and comprises at least one code segment that:

stores within a database a list of private label participating merchants including a merchant location identifier identifying each location of each private label participating merchant included on the list;

receives an authorization request for the transaction involving the payment card, the authorization request including a data field for storing a merchant location identifier for the merchant location where the transaction occurred;

performs a merchant screening process on the transaction including validating the transaction as originating at a private label participating merchant location by comparing the received merchant location identifier to the list of private label participating merchants stored within the database;

manipulates the authorization request to include a private label identifier when the transaction is determined to have originated at one of the participating merchants; and

transmits the manipulated authorization request with the private label identifier to the issuer for processing as a private label transaction.

35. A computer program according to claim 34 further comprising at least one code segment that:

assigns a range of account numbers to the issuer, the range of account numbers designated for receiving the merchant screening process;

associates an account number from the range of account numbers with the payment card;

stores the range of account numbers in the database;

receives the authorization request including the account number associated with the payment card used in the transaction;

applies the merchant screening process to the transaction based on the received account number including determining whether the account number associated with the payment card is registered as a private label account number;

if the account number is registered as a private label account number, determines whether the transaction originated at a private label participating merchant location before transmitting the authorization request to the issuer as a private label transaction; and

if the account number is not registered as a private label account number, transmits the authorization request to the issuer as a business-as-usual transaction.