Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
1999-12-29
2002-12-03
Millin, Vincent (Department: 3624)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
C705S038000
Reexamination Certificate
active
06490568
ABSTRACT:
TECHNICAL FIELD
This invention relates to an automated system and method for monitoring financial transactions.
BACKGROUND ART
With the advent of computerized systems and the internet, commercial transactions have experienced a significant increase. Credit cards, debit cards and other financial account cards, as part of the entire process, are popular means to transact business. Accordingly, credit cards, debit cards and other cards have gained widespread acceptance as a method of paying for goods and services. These cards collectively may be referred to as “data cards.” Data cards in use today typically include a magnetic stripe containing account and other information, and most often include an account number and other information in embossed or raised characters.
Two elements must be present before a credit card transaction can be completed successfully. First, the consumer or cardholder must possess a valid credit card. Second, the merchant must be authorized to accept the card as payment for the goods or services and to receive payment from the organization that issued the credit card. The card issuing organization subsequently receives payment from the cardholder.
Credit cards are issued by banks and other financial organizations, generally as members and under the regulations of a credit card issuing association or entity. VISA®, MASTERCARD®, DISCOVER CARD®, and AMERICAN EXPRESS® are examples of credit card issuing associations or entities for particular brands of data cards. When a credit card is issued, the issuer is, in effect, granting a line of credit to the cardholder. Because the issuer is granting a line of credit, a credit card will be issued only after the issuer has conducted a credit background check and is satisfied as to the cardholder's ability and willingness to repay the debts incurred. The issuer's confidence is reflected in the amount of credit granted, which may range from a few hundred dollars to tens of thousands of dollars.
Many data card transactions involve third-party credit card transaction processors in addition to the merchant and credit card issuer. Transaction processors, which are sometimes independent business institutions, provide merchants with data processing services that facilitate the flow of credit card transaction data and the corresponding payments of monies between the merchants and card issuers. The flow of transaction data from the merchant to the issuer via a transaction processor is commonly referred to as “processing” or “clearing” the transactions. The flow of money from the issuer to the merchant via a processor is known as “settlement.” The term “transaction processor”, as used herein, generally means a third-party institution that processes card transactions independently of a card issuer, but can also include card issuers and card issuing associations that process their own transactions.
In a typical credit card transaction, a card holder presents a credit card to a merchant, who records transaction data by using either an electronic terminal or a manually imprinted sales draft. The recorded data includes the amount of the purchase, the cardholder's account number, the card's expiration date, the merchant identification number, and the date of the transaction. In most cases, the cardholder is also required to sign a copy of the receipt.
At the end of each day, the merchant determines the total dollar volume of the credit card transactions completed and prepares a deposit slip indicating that amount. All of the transaction data is then transferred to the merchant's credit card transaction processor and entered into the transaction processor's computers. This transfer may be electronic, in which case a data capture terminal transfers the data directly to the processor's computer. Alternatively, the transfer may involve the deposit of imprinted paper sales drafts and subsequent entry of the data into the computers by the processor's data entry personnel.
Once the data is received by the transaction processor, the amount of the merchant's “deposit” is verified and recorded. At that point, the transactions are separated according to the type of credit card used to complete the transaction. The transaction processor then transfers the corresponding transaction data to the appropriate credit card issuer or card issuing association. After the data is transferred to the issuer, the issuer posts the individual transactions to the appropriate cardholder's account.
In most cases, settlement occurs very soon after the data is cleared. For example, after a transaction processor receives a merchant's daily transaction data, the balance due the merchant is calculated and paid to the merchant via check, direct deposit, or wire transfer. The transaction processor issues the check out of the individual merchant account held with the transaction processor. Transaction processors perform the task of maintaining the individual merchant accounts manually. In addition to maintaining merchant accounts, the transaction processor sorts the transaction data from all of its client merchants according to the type of card used and forwards that data to the appropriate card issuer. Because transaction processors perform these functions manually, processing and account maintenance accordingly becomes extremely time-consuming and costly.
Once the transaction processor has sorted the transactions and forwarded the information to the appropriate card issuer, the issuer or card association then determines the balance due the transaction processor and transfers that amount to the transaction processor. As a part of a transaction settlement, transaction processors and issuers assess fees for processing the credit card transaction. These fees are commonly referred to as the “discount rate” and are usually calculated as a percentage of the face value of the credit card transaction. The issuer deducts its fee as percentage from the total amount due the transaction processor.
As noted above, in performing its tasks, the transaction processor must maintain an account for each merchant. Where the merchant is a high risk, the transaction processor may require a minimum account balance or reserve. The reserve or minimum balance serves as collateral for future debits. Transaction processors must monitor the cash flow into and out of the account. Given that monitoring the accounts is performed manually, transaction processors incur great cost. Consequently, a need has developed whereby transaction processors may have an automated system and method which monitors the cash flow of the merchant account and maintains a minimum balance for each merchant account based upon allowable delays.
DISCLOSURE OF INVENTION
In view of the above problems associated with the related art, it is an object of the present invention to provide an automated system which monitors the cash flow of an account.
It is also an objective of the invention to provide a system which maintains a minimum balance for each merchant account based upon allowable delays.
In view of the above problems associated with the related art, it is an object of the present invention to provide a method which automatically monitors the cash flow of an account.
It is also an objective of the invention to provide a method which maintains a minimum balance for each merchant account.
In carrying out the above objects and other objects and features, an automated system and method for monitoring the cash flow and maintaining a minimum balance is provided. The automated system/method includes a point of sale device and data files for transactional activity. The point of sale device resides at the merchant's premises and is used for commercial transactions between a credit card holder and a merchant. The data files are comprised of the net transactional activity between the credit card holder and the merchant. The system further includes a merchant credit card transaction processor for processing data files at the merchant premises and a merchant database. The syst
Luna-Victoria Margot
O'Mara Timothy L.
Spalt Daniel B.
Brooks & Kushman P.C.
First Data Corporation
Kyle Charles R.
Millin Vincent
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