Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
1999-03-25
2001-05-01
Swann, Tod R. (Department: 2767)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
C705S002000, C705S038000
Reexamination Certificate
active
06226624
ABSTRACT:
BACKGROUND OF THE INVENTION
1. The Field of the Invention
The present invention relates to electronic authorization of financial transactions, and in particular, to electronic authorization of specific predetermined transactions. More particularly, the present invention relates to specific authorization of individual transactions otherwise inhibited or prohibited.
2. Present State of the Art
Modernly, more and more transactions in commerce have come to rely upon the convenience of utilizing a transaction card such as a credit card for the purchasing of goods and services. As credit cards have become more ubiquitous, so also has the infrastructure supporting the use of credit cards in commerce. At one point, what was a simple relationship between a card issuer and a cardholder has evolved to include intermediaries providing authorization services and financial distribution services. Such an expansive infrastructure has come to facilitate on-line or near real-time transaction authorization.
Furthermore, because of the extensive nature of the credit card infrastructure, additional users, not necessarily relying upon credit, also utilize the existing infrastructure in carrying out commerce. For example, businesses or corporations may establish a series of accounts with a card issuer and distribute transaction cards to their members for use in executing cashless transactions. To minimize fraud and abuse in the purchasing of goods and services, authorization standards have been established.
FIG. 1
represents a standardized authorization process for transaction verification. An account manager, such as a fleet manager or other entity, desiring cashless transaction privileges contacts a card issuer
114
to request the extension of transaction privileges through an established account request
116
. Typically, when establishing a credit account, card issuer
114
places restrictions such as transaction amount limitations upon the card user. However when establishing accounts for business or other like users, account manager
102
may request that card issuer
114
deny certain transactions and strictly enforce other limitations on transactions.
Exemplary desired account limitations include restrictions on the types of services and goods that may be procured by an account user
104
as directed by account manager
102
. Industry standards have been established for the partitioning of goods and services into categories designated by a standard industrial code (SIC). A merchant
106
is assigned a specific standard industrial code corresponding to their predominate business function. For business transactions that adhere to the SIC coding, transactions originating at a point of sale terminal having a restricted SIC identifier may be unable to obtain proper authorization to complete a transaction with an account user. Other limitations frequently desired by account managers include transactional limits. Transactional limits may include single transaction limits or aggregate limitations upon successive transactions.
Card issuer
114
upon the establishment of an account may employ a third party authorizing agent to provide authorization services and strictly enforce transaction limitations as agreed upon between account manager
102
and card issuer
114
. Card issuer
114
through an establish authorization request
118
informs authorizing agent
112
of the transaction terms under which transaction authorization may be granted.
Once an account has been established account manager
102
provides the account information necessary to enable account user
104
to engage in commerce transactions. Such account information generally includes an account number as assigned by card issuer
114
. The predominate form of providing account information to account user
104
is to provide account user
104
with a transaction card generally taking the form of a credit card-like card bearing the account number thereon. Account user
104
upon initiating a transaction with a merchant
106
engages in a payment presentment step
120
by providing the requisite account information to merchant
106
. Merchant
106
engages in an authorization process to verify that the transaction parameters of the present transaction are within the boundaries or limitations placed upon the account as requested by account manager
102
or imposed by card issuer
114
. An authorization request
122
issued by merchant
106
is comprised of an account number, a transaction amount and other parameters such as a standard industrial code (SIC), a merchant identifier (MID) and an acquiring bank identification number (BIN).
A merchant
106
typically associates with an acquiring bank
108
which provides funding services of merchant transactions. Authorization requests may electronically pass through acquiring bank
108
as designated by the BIN of the authorization request and additionally may route through a card company
110
(e.g., MasterCard®, VISA®, Discover Card® or American Express®) prior to reaching authorizing agent
112
for comparison of account parameters. Authorizing agent
112
compares the transaction parameters for conformance with account limitations. Authorizing agent
112
issues an authorization response
124
comprising an acceptance or denial indicator.
During general authorization processing, funds generally do not transfer at that time. A settlement generally occurs at a periodic time such as evenings or nights when a merchant re-initiates communication with an authorizing agent and presents a series of accepted and authorized transactions occurring throughout the previous period and requests financial settlement of such transactions. Merchant
106
initiates a settlement request
126
with authorizing agent
112
which generally comprises the account number to be debited, the amount of the debit and other information such as SIC, MID and BIN designators. As part of the settlement process, authorizing agent
112
issues a settlement request
128
to card issuer
114
. Frequently a settlement request
128
includes less cryptic merchant information (i.e., merchant name and city/state address instead of MID) for later presentment to an account manager. Card issuer
114
in a payment settlement response step
130
passes payment information on to merchant's acquiring bank
108
with the appropriate funds transferring in a step
131
.
At yet another periodic point in time, card issuer
114
provides a billing account
132
to account manager
102
for notification of payment due or for other record keeping purposes. Such billing account information may be presented in
18
various forms including printed statements as well as electronic reporting. In such generic authorization processing as described above, billing account information contains relatively little and non-descriptive information such as an account number, a transaction amount and merchant information.
At least three particular shortcomings of the authorization process as described in
FIG. 1
should be pointed out. First, authorization performed by authorizing agent
112
provides a regulation of transactions by either proscribing transactions originating at a merchant having a proscribed SIC goods/services designator, or withholding authorization from transactions that exceed transactional limits. Such an authorization process approves transactions of values less than the transactional limits transpiring at non-proscribed merchant point of sale terminals having a non-barred SIC goods/services designator. Prior art authorization techniques do not provide a method or system for enforcing strict transaction parameters prior to authorization of restricted transaction types on a transaction by transaction basis. Additionally prior art techniques do not permit an account manager to create transaction authorization parameters without re-initiating account establishment procedures.
A second shortcoming of the authorization processing in the prior art relates to billing account information sent from card issuer
114
for evaluation by account m
Burke Brad
Watson Craig J.
Myhre James W.
Swann Tod R.
Workman & Nydegger & Seeley
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