System and method for linked account having sweep feature

• US 8,326,766 B2
• Filed: 04/06/2007
• Issued: 12/04/2012
• 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: Hirka, Jeffrey L., Fox, Steven J.
• Primary Examiner(s): Kyle, Charles
• Application Number:
  US11/697,440
• Publication Number:
  US 20070198404A1
• Time in Patent Office: 2,069 Days
• Field of Search: 705/39, 705/75, 705/235
• US Class Current: 705/75
• 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 computer-implemented method for facilitating electronic funds transactions is disclosed. According to one embodiment, the method may comprise the steps of: issuing a transaction card to a cardholder by associating the transaction card with a demand deposit account from which the cardholder is authorized to electronically disburse funds; receiving an authorization request for an attempted transaction between a merchant and the cardholder, the authorization request containing information associated with the transaction card and the attempted transaction; processing the authorization request based on one or more predetermined business rules; authorizing the transaction without immediately settling the transaction against the demand deposit account of the cardholder; and settling the transaction, at a time subsequent to the execution of the transaction, through automated clearing house (ACH) from funds retained within the demand deposit account of the cardholder.

Claims

1. A system for facilitating electronic transactions, the system comprising:

a transaction card containing point-of-sale readable information, the transaction card being issued by an issuer to a qualified consumer, wherein the qualified consumer becomes a cardholder having a privilege to execute purchase transactions with the transaction card at a plurality of merchants by submitting valid demand deposit account (DDA) information for a checking account of the cardholder, and wherein the checking account is provided by a financial institution other than the issuer of the transaction card;

an authorization server adapted for communication, through a payment network, with point-of-sale transaction terminals; and

programming associated with the authorization server for;

receiving transaction information, through the payment network, from one of the point-of-sale transaction terminals in response to an attempted transaction by the cardholder using the transaction card,

issuing a declined message and terminating card processing if the transaction card is invalid or the attempted transaction falls outside limits of card usage,

authorizing the transaction by generating a debit transaction for the checking account of the cardholder utilizing an automated clearing house (ACH) network, and

settling the transaction at a time subsequent to the execution of the transaction by sweeping funds from the checking account of the cardholder.

6. The system according to claim 1, wherein the issuer of the transaction card is a financial institution.

7. The system according to claim 1, wherein the issuer of the transaction card is not a financial institution.

2. A computer-implemented method for executing electronic funds transactions, the method comprising:

issuing, by a card-issuing institution, a transaction card to a cardholder, the transaction card being linked to a checking account held by the cardholder at a financial institution different from the card-issuing institution, wherein the cardholder qualifies for the transaction card by submitting valid demand deposit account (DDA) information of the checking account, the transaction card account data and the DDA information of the checking account being stored by the card-issuing institution in one or more storage media;

receiving, by a merchant, the transaction card as a form of payment from the cardholder desiring to execute a transaction with the merchant, wherein information associated with the transaction card is extracted from the transaction card and information associated with the transaction is generated;

receiving, at an authorization server, the information associated with the transaction card and the transaction, the authorization server having access to a storage medium containing the transaction card account data of the cardholder;

issuing, by the authorization server, a declined message and terminating card processing if the transaction card is invalid or if the requested transaction falls outside limits of card usage;

authorizing, by the authorization server, the transaction without immediately settling the transaction against the checking account of the cardholder if the transaction card is valid and the requested transaction falls within the limits of card usage; and

settling the transaction, at a time subsequent to the execution of the transaction, through automated clearing house (ACH) from funds retained within the checking account of the cardholder based at least in part on the DDA information of the checking account.

8. The method according to claim 2, wherein the card-issuing institution is a financial institution.

9. The method according to claim 2, wherein the card-issuing institution is not a financial institution.

3. A computer-implemented method for facilitating electronic funds transactions, the method comprising:

issuing, by a card-issuing institution, a transaction card to a cardholder by associating the transaction card with a demand deposit account from which the cardholder is authorized to electronically disburse funds, the demand deposit account being held by the cardholder at a financial institution different from the card-issuing institution, the card-issuing institution storing the transaction card account data and the demand deposit account information in one or more storage media;

receiving, at an authorization server having access to a storage medium containing the transaction card account data of the cardholder, an authorization request for an attempted transaction between a merchant and the cardholder, the authorization request containing information associated with the transaction card and the attempted transaction;

processing, by the authorization server, the authorization request based on one or more predetermined business rules;

authorizing, by the authorization server, the transaction without immediately settling the transaction against the demand deposit account of the cardholder; and

settling the transaction, at a time subsequent to the execution of the transaction, through automated clearing house (ACH) from funds retained within the demand deposit account of the cardholder based at least in part on the demand deposit account information.

4. The method according to claim 3, wherein the cardholder becomes qualified for the transaction card by providing a personal identification, an account number and a routing number associated with the demand deposit account.

5. The method according to claim 3, wherein the step of processing the authorization request further comprises evaluating the attempted transaction in relation to one or more predetermined account limitations.

10. The method according to claim 3, wherein the card-issuing institution is a financial institution.

11. The method according to claim 3, wherein the card-issuing institution is not a financial institution.