Processing non-traditional transactions on a traditional payment network

• US 9,940,619 B2
• Filed: 07/13/2010
• Issued: 04/10/2018
• Est. Priority Date: 07/13/2010
• Status: Active Grant

• Current Assignee: DFS Services LLC (Discover Financial Services)
• Original Assignee: DFS Services LLC (Discover Financial Services)
• Inventors: Ahmad, Farhan, Siljamaki, Meeri
• Primary Examiner(s): Kanervo, Virpi H
• Application Number:
  US12/835,517
• Publication Number:
  US 20120016728A1
• Time in Patent Office: 2,828 Days
• 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 20/12 specially adapted for electronic shopping systems
• 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 30/0222 During e-commerce, i.e. online transactions
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

A system for and methods of processing non-traditional payment transactions on a traditional payment network is disclosed. More specifically, a payments system includes one or more payment program managers (PPMs), which are the providers of alternative payment products, in combination with one or more payment program processors (PPPs), which serve as processors for the PPMs. The PPMs and PPPs operate on a payment network, such as a traditional payment network. The payments system includes the utilization of traditional bank identification numbers (BINS) in order to process non-traditional transactions on a traditional payment network. Surrogate numbers are issued on BIN ranges to the non-traditional transactions in order to process them on the traditional payment network. Additionally, the payments system includes pricing structures that are associated with alternative payment products. These pricing structures are implemented and processed on the payment network, alongside the pricing structures of traditional payment products.

Claims

1. A method of processing a financial transaction between a payer and a merchant through an electronic financial transaction processing system using a first non-traditional payment mechanism, the method comprising:

electronically receiving by a second operator of a traditional payment network, from an electronic device associated with the merchant, a request to authenticate the transaction, the request to authenticate the transaction comprising indicia for the payer and the first non-traditional payment mechanism;

authenticating the payer with a first operator of the first non-traditional payment mechanism;

determining, by an electronic device associated with the second operator of the traditional payment network, a surrogate number for association with the transaction, the surrogate number being a payment number for use on the traditional payment network and having been allocated by the second operator of the traditional payment network;

associating, by said electronic device associated with the second operator of the traditional payment network, the surrogate number with the transaction in a mapping database;

electronically transmitting, by said electronic device associated with the second operator of the traditional payment network, the surrogate number to the merchant;

receiving from the merchant, by said electronic device associated with the second operator of the traditional payment network, a request to authorize the transaction via the traditional payment network, the request to authorize the transaction comprising indicia for the associated surrogate number and a dollar amount for authorization;

transmitting, by the second operator of the traditional payment network, the request to authorize the transaction to the first operator of the first non-traditional payment mechanism; and

transmitting, by said electronic device associated with the second operator of the traditional payment network, in response to the request to authorize the transaction, an authorization approval or decline indication to the merchant.

2. The method of claim 1, wherein the determining the surrogate number further comprises:

querying a surrogate number database for an available surrogate number; and

receiving the available surrogate number, the available surrogate number being within a subrange of surrogate numbers corresponding to the first non-traditional payment mechanism.

3. The method of claim 1, further comprising:

receiving a settlement file from the second operator of the traditional payment network comprising a plurality of transactions at the merchant for a plurality of non-traditional payment mechanisms including the first non-traditional payment mechanism, each of the plurality of transactions associated with a surrogate number;

identifying each transaction among the plurality of transactions that are associated with the first non-traditional payment mechanism;

determining, for the identified associated transactions, associated indicia for the payer and the first non-traditional payment mechanism, and dollar amounts of the transactions;

sending the settlement file to the first operator of the first non-traditional payment mechanism for settlement of funds with the second operator of the traditional payment network in an amount corresponding to the dollar amounts of the identified associated transactions.

4. The method of claim 3, the determining the associated indicia for the payer further comprising:

performing a reverse-lookup of the surrogate number for the transaction in a surrogate number database.

5. A method of processing a financial transaction between a payer and a merchant through an electronic financial transaction processing system using a first non-traditional payment mechanism, comprising:

authenticating the payer with a first operator of the first non-traditional payment mechanism;

electronically receiving by a second operator of a traditional payment network, from an electronic device associated with the merchant, an authorization request for the transaction via the traditional payment network, the authorization request including a surrogate number previously associated with the transaction and indicia for use with the first non-traditional payment mechanism, the surrogate number being a payment number for use on the traditional payment network and having been allocated by a second operator of the traditional payment network;

transmitting, by an electronic device associated with the second operator of the traditional payment network, the authorization request to a processor of the first non-traditional payment mechanism via the traditional payment network, the processor of the first non-traditional payment mechanism being identifiable by at least a portion of the surrogate number;

determining, by said electronic device associated with the second operator of the traditional payment network, based on the surrogate number, a price to charge for processing the transaction; and

electronically transmitting, by said electronic device associated with the second operator of the traditional payment network, a response to the authorization request to the merchant.

6. The method of claim 5, wherein the price comprises one or both of a percentage of a transaction amount and a flat fee, to be charged to the merchant and payable to the first operator of the first non-traditional payment mechanism.

7. The method of claim 5, wherein the price further comprises additional fees payable to or by the second operator of the traditional payment network.

8. The method of claim 5, further comprising:

electronically receiving, from the merchant, a request to authenticate the transaction, the request to authenticate the transaction comprising indicia for the payer and the first non-traditional payment mechanism;

forwarding the request to authenticate the transaction to the processor of the first non-traditional payment mechanism;

receiving, from the processor of the first non-traditional payment mechanism, a response to the request to authenticate the transaction the response comprising the surrogate number; and

transmitting the surrogate number to the merchant.

9. The method of claim 5, further comprising:

receiving a settlement file comprising a plurality of transactions at the merchant, each of the plurality of transactions associated with a traditional payment number, a portion of the plurality of transactions associated with one or more non-traditional payment mechanisms and a portion of the plurality of transactions associated with a traditional payment mechanism;

identifying a subset of transactions from the plurality of transactions that are associated with at least said first operator of the non-traditional payment mechanism; and

transmitting, to the processor of the first non-traditional payment mechanism, the settlement file comprising information for the identified subset of transactions.

10. The method of claim 9, wherein the settlement file comprises indicia of fees to be paid to or collected from said first operator of the first non-traditional payment mechanism.

11. The method of claim 5, wherein determining the price to charge for the transaction comprises calculating the price from a plurality of pricing options based on a portion of the surrogate number.

12. A method of processing a financial transaction for a payer through an electronic financial transaction processing system using a non-traditional payment mechanism, comprising:

electronically receiving, by a second operator of a traditional payment network, from the payer and via an electronic device, purchase information for a transaction comprising indicia for the payer and the non-traditional payment mechanism;

transmitting an authentication request comprising the indicia for the payer to a processor of the non-traditional payment mechanism, wherein the payer is authenticated with the processor of the non-traditional payment mechanism;

receiving, by an electronic device associated with the second operator of the traditional payment network, in response to the transmission, a surrogate number for the transaction, the surrogate number having been associated with the transaction and the indicia for the payer and the surrogate number being a payment number for use on the traditional payment network and having been allocated by the second operator of the traditional payment network;

transmitting, by said electronic device associated with the second operator of the traditional payment network, an authorization request, via the traditional payment network, to the processor of the non-traditional payment mechanism, the authorization request comprising the surrogate number and a dollar amount for the financial transaction;

electronically submitting, by said electronic device associated with the second operator of the traditional payment network, to the first operator of the non-traditional payment mechanism, either directly or indirectly, a settlement file comprising the surrogate number; and

receiving an electronic transfer of funds, from the second operator for the traditional payment network, for the transaction.

13. The method of claim 12, wherein compensation received for the transaction differs from the dollar amount for the purchase by a discount rate, the discount rate having been determined based on the surrogate number.

14. The method of claim 13, wherein the discount rate comprises one or more of a percentage rate of the purchase and a per transaction fee.

15. The method of claim 12, further comprising:

receiving a consolidated report from the second operator of the traditional payment network, the report comprising at least one summary of transactions made through the traditional payment mechanism, and at least one summary of transactions made through the non-traditional payment mechanism.

16. A system for processing a financial transaction between a payer and a merchant using a traditional payment network and a non-traditional payment mechanism, comprising:

an input device, controlled by the merchant, configured to input indicia for the payer, the transaction and the non-traditional payment mechanism, wherein the indicia for the payer is authenticated with a first operator of the non-traditional payment mechanism;

a non-traditional payment routing processor, in connection over an electronic financial transaction network with the input device, configured to determine that the transaction is to be performed in part through the non-traditional payment mechanism; and

a non-traditional payment numbering system configured to associate a traditional payment number with the transaction, wherein the traditional payment number is allocated by a second operator of the traditional payment network, the non-traditional payment numbering system comprising;

a first database configured to store traditional payment numbers available for association with the transaction;

a number association engine configured to determine one of the available traditional payment numbers from the first database to associate with the transaction based upon stored determination criteria; and

a mapping database configured to store information related to the association between the transaction and the traditional payment number;

a pricing database configured to store pricing information corresponding to the traditional payment number; and

a pricing engine configured to determine a price to charge for the transaction based upon stored information in the pricing database,

wherein an electronic device associated with the second operator of the traditional payment network is configured to receive from the merchant a request to authorize the transaction, to transmit the request to authorize the transaction to the first operator of the first non-traditional payment mechanism and to transmit, in response to the request to authorize an authorization approval or decline indication to the merchant.

17. The system of claim 16, further comprising a non-traditional payment processing system, in connection with the mapping database, configured to determine from transaction information an associated non-traditional payment account, and configured to transmit the transaction information to a manager of the determined non-traditional payment account.