Merchant category code (“MCC”) based acceptance cost recovery

• US 9,576,282 B2
• Filed: 10/15/2012
• Issued: 02/21/2017
• Est. Priority Date: 10/15/2012
• Status: Active Grant

• Current Assignee: Bank of America Corp.
• Original Assignee: Bank of America Corp.
• Inventors: Murphy, Matthew D., Weigman, Scott A.
• Primary Examiner(s): Chein, Allen
• Application Number:
  US13/651,584
• Publication Number:
  US 20140108166A1
• Time in Patent Office: 1,590 Days
• Field of Search: None
• US Class Current: 1/1
• CPC Class Codes: G06Q 20/08 Payment architectures
• CPC Class Codes: G06Q 20/0855 involving a third party
• CPC Class Codes: G06Q 20/20 Point-of-sale [POS] network systems
• CPC Class Codes: G06Q 20/207 Tax processing
• CPC Class Codes: G06Q 20/3274 using a pictured code, e.g. barcode or QR-code, being displayed on the M-device
• CPC Class Codes: G06Q 30/0213 Consumer transaction fees
• 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 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03

Abstract

Methods and apparatus for recovering a transaction cost in connection with a transaction between a customer and a merchant are provided. The transaction cost may be recovered from a transaction that originates at a merchant location associated with a merchant category code. The transaction cost may be recovered from a low-value purchase. A recovery amount associated with the low-value purchase may include a fixed amount. The recovery amount associated with the low-value purchase may include a percentage of the acceptance cost. The recovery amount may be shared among two or more transaction participant. The recovery amount may be dynamically adjusted. Methods and apparatus may include providing adequate notice of changes in the recovery amount. The transaction cost may be recovered utilizing central control over network of merchant locations.

Claims

1. A point-of-sale (“

POS”

) system for recovering at least a portion of an interchange fee imposed by a credit card issuer on a merchant, the interchange fee imposed on a customer credit card transaction executed using a payment instrument at a location of the merchant, the POS system comprising;

a first POS terminal at the location of the merchant;

a second POS terminal at the location of the merchant;

an issuer transaction processing system;

a POS controller in electronic communication with the first POS terminal and with the second POS terminal; and

a payment instrument comprising;

a processor;

a mobile application controlled by the processor and configured to receive instructions from the POS controller over a wireless communication channel; and

a display controlled by the mobile application;

wherein;

the POS controller comprises a non-transitory computer usable medium having computer readable program code embodied therein, the computer readable program code when executed by a processor on a computer system, perform a computer-implemented method for dynamically activating the mobile application of the payment instrument and controlling the display of the payment instrument during a plurality of time-sensitive windows;

the first POS terminal is configured to capture a first customer credit card transaction executed using the payment instrument at the location;

the POS controller is configured to;

receive the first credit card transaction from the first POS terminal;

associate the first credit card transaction executed using the payment instrument with a first merchant category code (“

MCC”

);

determine a current sales volume at the merchant location associated with the first MCC; and

access the issuer transaction processing system and determine an interchange fee imposed by the credit card issuer on the first credit card transaction;

if the current sales volume at the merchant location associated with the first MCC exceeds a target sales volume, the POS controller is configured to;

determine a first surcharge based on;

the interchange fee; and

a transaction attribute selected from a group consisting of;

the first MCC; and

a zip code associated with the payment instrument;

determine a first start time for imposing the first surcharge on credit card transactions associated with the first MCC received by the POS controller after the first start time;

determine a first notice time based on the first surcharge, wherein the first notice time is;

a period of time during which the POS controller is configured to activate the mobile application on the payment instrument and instruct the mobile application to show, on the display of the payment instrument, an intent of the merchant to impose the first surcharge; and

earlier than the first start time;

during the first notice time;

detect a presence of the payment instrument within a pre-determined distance of the POS controller;

activate the wireless communication channel to communicate with the processor of the payment instrument;

transmit a first notification to the payment instrument during a first time-sensitive window between the first notice time and the first start time; and

in response to receiving the first notification, the processor of the payment instrument activates the mobile application and instructs the mobile application to show, on the display of the payment instrument;

the first surcharge that will be imposed by the POS controller after the first start time; and

the first MCC associated with the first surcharge;

after the first start time;

detect that the payment instrument has been used to execute a surcharged credit card transaction associated with the first MCC;

activate the mobile application and show, on the display of the payment instrument;

the imposed first surcharge; and

the first MCC associated with the first surcharge; and

instruct the first POS terminal to impose the first surcharge on the first credit card transaction to offset at least a portion of the interchange fee imposed on the merchant by the credit card issuer;

if the current sales volume at the merchant location associated with the first MCC is less than or equal to the target sales volume, the POS controller is configured to;

instruct the first POS terminal to process the first credit card transaction without imposing the first surcharge; and

instruct the processor of the payment instrument to activate the mobile application and show, on the display of the payment instrument;

a zero surcharge; and

the first MCC associated with the zero surcharge;

the second POS terminal is configured to capture a second credit card transaction executed using the payment instrument;

the POS controller is further configured to;

receive the second credit card transaction from the second POS terminal;

associate the second credit card transaction executed using the payment instrument with a second MCC; and

determine a current sales volume at the merchant location associated with the second MCC;

if the current sales volume at the merchant location associated with the second MCC exceeds the target sales volume, the POS controller is configured to;

determine a second surcharge based on;

the interchange fee; and

a transaction attribute selected from a group consisting of;

the second MCC; and

a zip code associated with the payment instrument;

determine a second start time for imposing the second surcharge on credit card transactions associated with the second MCC received by the POS controller after the second start time;

determine a second notice time based on the second surcharge, wherein the second notice time is;

a period of time during which the POS controller is configured to activate the mobile application on the payment instrument and instruct the mobile application to show, on the display of the payment instrument, an intent of the merchant to impose the second surcharge; and

earlier than the second start time;

during the second notice time;

detect a presence of the payment instrument within a pre-determined distance of the POS controller;

activate the wireless communication channel to communicate with the processor of the payment instrument;

transmit a second notification to the payment instrument during a second time-sensitive window between the second notice time and the second start time; and

in response to receiving the second notification, the processor of the payment instrument activates the mobile application and instructs the mobile application to show, on the display of the payment instrument;

the second surcharge that will be imposed by the POS controller beginning after the second start time; and

the second MCC;

after the second start time;

detect that the payment instrument has been used to execute a surcharged credit card transaction associated with the second MCC;

activate the mobile application and show, on the display of the payment instrument;

the imposed second surcharge; and

the second MCC associated with the second surcharge; and

impose the second surcharge on the second credit card transaction to offset at least a portion of the interchange fee imposed on the merchant by the credit card issuer;

if the current sales volume at the merchant location associated with the second MCC is less than or equal to the target sales volume, the POS controller is configured to;

instruct the second POS controller to process the second credit card transaction without imposing the second surcharge; and

instruct the processor of the payment instrument to activate the mobile application and show, on the display of the payment instrument;

a zero surcharge; and

the second MCC associated with the zero surcharge.

2. The apparatus of claim 1, wherein the POS controller is further configured to determine the first or second surcharge based on the first or second MCC and a geographic value associated with the location of the merchant.

3. The apparatus of claim 2 wherein the first MCC is one of a plurality of MCCs associated with the geographic value.

4. The apparatus of claim 2, wherein, the geographic value comprises a map coordinate.

5. The apparatus of claim 4, wherein the map coordinate is one of a plurality of map coordinates.

6. The apparatus of claim 4, wherein, the geographic value comprises a radius extending from the map coordinate.

7. The apparatus of claim 1, wherein the POS controller is further configured to determine the first surcharge based on the first MCC and the first start time associated with the first MCC.

8. The apparatus of claim 1, wherein the POS controller is further configured to determine the first surcharge based on the first MCC and an end time associated with the first MCC.

9. The apparatus of claim 1, wherein the POS controller is further configured to determine the first surcharge based on a channel of commerce associated with the first or the second credit card transactions.

10. The apparatus of claim 1, wherein the POS controller is further configured to determine the first surcharge based on a taxation status associated with the first MCC.

11. The apparatus of claim 1, wherein the POS controller is further configured to determine the first surcharge based on a plurality of performance metric quantities that is associated with the first MCC.

12. The apparatus of claim 11 wherein the POS controller is further configured to:

determine a first performance metric threshold;

obtain a second performance metric threshold from the issuer transaction processing system; and

identify, for the first MCC, the first surcharge that corresponds to a set of the performance metric quantities that are not less than the first or second performance metric thresholds.

13. The apparatus of claim 12 wherein the POS controller is further configured to identify, for the first MCC and a geographic value, the first surcharge that corresponds to the set of the performance metric quantities that are not less than the first or second performance metric thresholds.

14. The apparatus of claim 11, the POS controller further configured to:

adjust the first surcharge;

measure an effect of the first surcharge on the plurality of performance metric quantities; and

re-adjust the first surcharge based on the effect of the first surcharge on the plurality of performance metric quantities.

15. The apparatus of claim 1, the POS controller is further configured to transmit, to the issuer transaction processing system, an authorization request to charge the payment instrument an amount that is not less than a sum of the first surcharge and a purchase amount.

16. The apparatus of claim 1, wherein the first surcharge is a fractional portion of the interchange fee;

and

the fractional portion corresponds to a product of a surcharge fraction (“

SF”

) and the interchange fee, wherein 0≦

SF≦

1.