Financial instrument having credit and pre-paid characteristics

• US 8,751,376 B1
• Filed: 09/15/2009
• Issued: 06/10/2014
• Est. Priority Date: 09/15/2008
• Status: Active Grant

• Current Assignee: Galileo Financial Technologies LLC (SoFi Technologies, Inc.)
• Original Assignee: Galileo Processing Incorporated
• Inventors: Wilkes, T. Clay
• Primary Examiner(s): RANKINS, WILLIAM E
• Application Number:
  US12/560,072
• Time in Patent Office: 1,729 Days
• Field of Search: 705/35, 705/39
• US Class Current: 705/38
• CPC Class Codes: G06Q 20/24 Credit schemes, i.e. "pay after"
• CPC Class Codes: G06Q 20/28 Pre-payment schemes, e.g. "pay before"
• CPC Class Codes: G06Q 20/405 Establishing or using transaction specific rules
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03

Abstract

Embodiments of the present invention provide for methods and systems for providing a financial instrument that possesses both credit features (secured and unsecured) and prepaid features. When a purchase is made using a financial instrument linked to an account, funds are first drawn from a line of credit until a credit limit is reached. Any additional funds required to make the purchase are then drawn from a secured account, such as a prepaid cash balance. In some embodiments, the additional funds are automatically drawn form the prepaid cash balance while in other embodiments an account holder manually transfers funds from the prepaid cash balance to the credit balance.

Claims

1. In a system that includes a financial instrument, the financial instrument tied to a single financial account comprising a credit portion and a prepaid portion that may be accessed by an account holder in a financial transaction, a method for processing the financial transaction, the method comprising:

funding the financial account with a cash balance provided by the account holder, an amount of the cash balance comprising the prepaid portion of the financial account;

providing the financial instrument enabling the account holder to access the credit portion and the prepaid portion of the financial account, the credit portion linked to the prepaid portion in a single physical storage media;

receiving at a computing system a purchase authorization for the financial transaction initiated by the account holder, the purchase authorization comprising a purchase amount and an identifier for the financial account;

determining at the computing system an available balance of the credit portion of the financial account;

if the purchase amount exceeds the available balance of the credit portion, funding the financial transaction with an amount less than or equal to the available balance of the credit portion;

funding a remaining portion of the purchase amount with the prepaid portion of the financial account;

receiving a prepaid cash deposit from an account holder; and

applying the prepaid cash deposit to the prepaid cash balance portion until the prepaid cash balance satisfies a minimum amount and any amount of the prepaid cash deposit not applied to the prepaid cash balance is applied to at least partially pay an amount of the credit limit that has been used by the account holder.

2. The method of claim 1, wherein funding a remaining portion of the purchase amount with the prepaid portion of the financial account comprises automatically funding the remaining portion of the purchase amount with available cash from the prepaid portion such that the prepaid portion functions as a security for the credit portion.

3. The method of claim 1, further comprising enabling the account holder to manually move an amount greater than or equal to the remaining portion of the purchase amount from the prepaid portion to the credit portion if the purchase amount exceeds the available balance of the credit portion.

4. The method of claim 1, further comprising:

prior to funding a remaining portion of the purchase amount with the prepaid portion of the financial account, determining if the cash balance has been previously allocated for a different financial transaction; and

if the cash balance has been previously allocated, denying the transaction if other funds in the prepaid portion are not available for use in the financial transaction.

5. The method of claim 1, further comprising:

prior to funding a remaining portion of the purchase amount with the prepaid portion of the account, determining if the cash balance remaining after being applied will satisfy a minimum amount specified by the financial institution; and

if the cash balance remaining after being applied will not satisfy a minimum amount specified by the financial institution, denying the transaction.

6. An account system comprising:

one or more processors;

a single storage media for maintaining each of;

a credit portion having a credit limit associated with an account; and

a prepaid cash balance portion associated with the account, wherein the credit portion and the prepaid cash balance portion are each tied to a financial instrument that enables access to the credit portion and the prepaid cash balance portion in making purchases;

wherein the account system is configured to perform the following;

receive a purchase authorization for a transaction initiated by an account owner, the purchase authorization including an account identifier and a purchase amount;

determine if the credit portion is sufficient to cover the purchase amount;

if the purchase amount exceeds the available balance of the credit portion, fund the financial transaction with an amount less than or equal to the available balance of the credit portion;

fund a remaining portion of the purchase amount with the prepaid cash balance portion of the account;

receive a prepaid cash deposit from an account holder; and

apply the prepaid cash deposit to the prepaid cash balance portion until the prepaid cash balance satisfies a minimum amount and any amount of the prepaid cash deposit not applied to the prepaid cash balance is applied to at least partially pay an amount of the credit limit that has been used by the account holder.

7. The account system of claim 6, wherein the remaining portion of the purchase amount not funded with the credit portion is automatically funded by the prepaid cash balance portion such that the prepaid cash balance portion acts a security for the credit portion.

8. The account system of claim 6, wherein the remaining portion of the purchase amount not funded with the credit portion is manually moved from the prepaid cash portion to the credit portion prior to being applied by the account owner.

9. The account system of claim 6, wherein the minimum amount is a required minimum account balance for the prepaid cash balance portion as specified by a financial institution associated with the account system.

10. The account system of claim 6, wherein the account system is configured to further perform the following:

prior to funding the remaining portion of the purchase amount with the prepaid cash balance portion, determining if the prepaid cash balance portion remaining after the funding will satisfy a minimum amount specified by a financial institution providing the account; and

if the cash balance remaining after the funding will not satisfy the minimum amount specified by the financial institution, denying the purchase authorization for the transaction.