U.S. patent application number 09/884005 was filed with the patent office on 2002-03-14 for method and apparatus for making payments and delivering payment information.
Invention is credited to Embrey, Mark C..
Application Number | 20020032651 09/884005 |
Document ID | / |
Family ID | 26709371 |
Filed Date | 2002-03-14 |
United States Patent
Application |
20020032651 |
Kind Code |
A1 |
Embrey, Mark C. |
March 14, 2002 |
Method and apparatus for making payments and delivering payment
information
Abstract
When characterized as an improved method of making payments from
a plurality of payor entities to a plurality of payee entities
through a service provider, the invention consists of a number of
method steps which will now be described. First, authorization is
obtained from a plurality of payor entities which allows a service
provider to make payments, on behalf of the plurality of payor
entities, to a plurality of payee entities. Then at least one
trusted intermediary financial institution is selected. The trusted
intermediary financial institution periodically receives payment
information and payment authorization from the plurality of payor
entities. The trusted intermediary financial institution
automatically transfers funds, in amounts only consistent with at
least the payment information, to the service provider. Preferably,
the payment information includes at least (1) an identification of
each of the plurality of payee entities; (2) an identification of
payment amounts for each of the plurality of payee entities; (3) a
payment record identifier which is uniquely associated with each
payment; and (4) an authorization code which is uniquely associated
with each payment record identifier.
Inventors: |
Embrey, Mark C.;
(Steubenville, OH) |
Correspondence
Address: |
Melvin A. Hunn, Esq.
HILL & HUNN LLP
Suite 1440
201 Main Street
Fort Worth
TX
76102
US
|
Family ID: |
26709371 |
Appl. No.: |
09/884005 |
Filed: |
June 19, 2001 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
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09884005 |
Jun 19, 2001 |
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08984282 |
Dec 3, 1997 |
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6311170 |
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60033165 |
Dec 4, 1996 |
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Current U.S.
Class: |
705/40 ;
705/42 |
Current CPC
Class: |
G06Q 20/02 20130101;
G06Q 20/04 20130101; H04M 15/00 20130101; G06Q 20/10 20130101; H04M
2215/0196 20130101; G06Q 20/108 20130101; G06Q 20/102 20130101;
H04M 15/68 20130101 |
Class at
Publication: |
705/40 ;
705/42 |
International
Class: |
G06F 017/60 |
Claims
What is claimed is:
1. An improved method of making payments from a plurality of payor
entities to a plurality of payee entities through the coordinated
operation of a service provider and a trusted intermediary
financial institution, comprising the method steps of: utilizing at
least one data processing system to sort and format payment
information separately for each of said plurality of payor entities
concerning a plurality of payment obligations; communicating said
payment information separately from each of said plurality of payor
entities to said service provider and said trusted intermediary
financial institution; utilizing at least one data processing
system under control of said service provider to consolidate said
plurality of payment obligations from said plurality of payor
entities in accordance with at least one predetermined
consolidation criterion; directing a plurality of negotiable
instruments from said service provider to said plurality of payees
in order to satisfy said plurality of payment obligations;
utilizing at least one data processing system under control of said
trusted intermediary financial institution to transfer
automatically funds in order to honor said plurality of negotiable
instruments.
2. An improved method of making payments according to claim 1,
wherein said at least one consolidation criterion comprises
grouping said plurality of payment obligations by payee identity in
order to minimize the number of negotiable instruments
generated.
3. An improved method of making payments according to claim 1
further comprising the method steps of: communicating data
processing system readable payment authorization information from
said plurality of payor entities to said trusted intermediary
financial institution; and utilizing said at least one data
processing system under control of said trusted intermediary
financial institution to verify said data processing system
readable payment authorization information from said plurality of
payor entities prior to honoring said plurality of negotiable
instruments.
4. An improved method of making payments according to claim 3,
wherein said data processing system readable payment authorization
information includes: (a) a payment record identifier for each
payment obligation of said plurality of payment obligations; (b) an
identification of payment amount for each payment obligation of
said plurality of payment obligations; and (c) an authorization
code uniquely associated with each payment record identifier.
5. An improved method of making payments according to claim 1,
further comprising: communicating data processing system readable
payment verification information from said service provider to said
trusted intermediary financial institution; utilizing said at least
one data processing system under control of said trusted
intermediary financial institution to verify said plurality of
negotiable instruments utilizing at least said data processing
system readable payment verification information from said service
provider.
6. An improved method of making payments according to claim 1,
wherein said data processing system readable payment verification
information includes: (a) an identification of each of said
plurality of negotiable instruments; (b) an identification of the
payment amount of each of said plurality of negotiable instruments;
and (c) an identification of each payment obligation satisfied by
each of said plurality of negotiable instruments.
7. An improved method of making payments according to claim 1,
further comprising the method steps of: communicating data
processing system readable payment authorization information from
said plurality of payor entities to said trusted intermediary
financial institution; communicating data processing system
readable payment verification information from said service
provider to said trusted intermediary financial institution;
utilizing said at least one data processing system under control of
said trusted intermediary financial institution to verify said
plurality of negotiable instruments utilizing both of (1) said data
processing system readable payment authorization information from
said plurality of payor entities, and (2) said data processing
system readable payment verification information from said service
provider.
8. An improved method of making payments according to claim 1,
further comprising the method step of: communicating data
processing system readable payment confirmation information from at
least one of (1) said service provider and (2) said trusted
intermediary financial institution to said plurality of payors.
9. An improved method of making payments according to claim 8,
wherein said data processing system readable payment information
includes: (a) a payment record identifier for each payment
obligation of said plurality of payment obligations which has been
satisfied; (b) an identification of each negotiable instrument
utilized by said service provider to satisfy said plurality of
payment obligations.
10. An improved method of making payments according to claim 1,
further comprising the method steps of: establishing a payor
banking account for each of said plurality of payors; allowing
predefined access to said payor banking account for each of said
plurality of payors by said trusted intermediary financial
institution; establishing a service provider banking account;
allowing predefined access to said service provider banking account
by said trusted intermediary financial institution; utilizing at
least one data processing system under control of said trusted
intermediary financial institution to transfer automatically funds
between particular ones of said payor banking accounts for each of
said plurality of payors and said service provider banking account
in order to honor verified ones of said plurality of negotiable
instruments.
11. An improved method of making payments according to claim 10,
wherein said step of utilizing at least one data processing system
under control of said trusted intermediary financial institution to
transfer automatically funds comprises: utilizing at least one data
processing system under control of said trusted intermediary
financial institution to transfer automatically funds between
particular ones of said payor banking accounts for each of said
plurality of payors and said service provider banking account
utilizing electronic funds transfers in order to honor verified
ones of said plurality of negotiable instruments.
12. An improved method of making payments according to claim 11,
further comprising: grouping electronic funds transfer operations
for a predefined time interval for particular ones of said payor
banking accounts in order to minimize the number of electronic
funds transfers.
13. An improved method of making payments according to claim 1,
further comprising: providing with each of said plurality of
negotiable instruments a report which provides detailed information
relating to each of said plurality of payment obligations satisfied
by said negotiable instruments.
14. A means for making payments from a plurality of payor entities
to a plurality of payee entities through the coordinated operation
of said plurality of payor entities, a service provider, and a
trusted intermediary financial institution, comprising: means for
utilizing at least one data processing system to sort and format
payment information separately for each of said plurality of payor
entities concerning a plurality of payment obligation; means for
communicating said payment information separately from each of said
plurality of payor entities to said service provider and said
trusted intermediary financial institution; means for utilizing at
least one data processing system under control of said service
provider to consolidate said plurality of payment obligations from
said plurality of payor entities in accordance with at least one
predetermined consolidation criterion; means for directing a
plurality of negotiable instruments from said service provider to
said plurality of payees in order to satisfy said plurality of
payment obligations; means for utilizing at least one data
processing system under control of said trusted intermediary
financial institution to transfer funds automatically in order to
honor said plurality of negotiable instruments.
15. A means for payments according to claim 14, wherein said at
least one consolidation criterion comprises grouping said plurality
of payment obligations by payee identity in order to minimize the
number of negotiable instruments generated.
16. A means for making payments according to claim 14 further
comprising: means for communicating data processing system readable
payment authorization information from said plurality of payor
entities to said trusted intermediary financial institution; and
means for utilizing said at least one data processing system under
control of said trusted intermediary financial institution to
verify said data processing system readable payment authorization
information from said plurality of payor entities.
17. A means for making payments according to claim 14, wherein said
data processing system readable payment authorization information
includes: (a) a payment record identifier for each payment
obligation of said plurality of payment obligations; (b) an
identification of payment amounts for each payment obligation of
said plurality of payment obligations; and (c) an authorization
code uniquely associated with each payment record identifier.
18. A means for payments according to claim 14, further comprising:
means for communicating data processing system readable payment
verification information from said service provider to said trusted
intermediary financial institution; means for utilizing said at
least one data processing system under control of said trusted
intermediary financial institution to verify said plurality of
negotiable instruments utilizing at least said data processing
system readable payment verification information from said service
provider.
19. A means for making payments according to claim 14, wherein said
data processing system readable payment verification information
includes: (a) an identification of each of said plurality of
negotiable instruments; (b) an identification of the payment amount
of each of said plurality of negotiable instruments; and (c) an
identification of each payment obligations satisfied by each of
said plurality of negotiable instruments.
20. A means for making payments according to claim 14, further
comprising: means for communicating data processing system readable
payment authorization information from said plurality of payor
entities to said trusted intermediary financial institution; means
for communicating data processing system readable payment
verification information from said service provider to said trusted
intermediary financial institution; means for utilizing said at
least one data processing system under control of said trusted
intermediary financial institution to verify said plurality of
negotiable instruments utilizing both of (1) said data processing
system readable payment authorization information from said
plurality of payor entities, and (2) said data processing system
readable payment verification information from said service
provider.
21. A means for making payments according to claim 14, further
comprising: means for communicating data processing system readable
payment confirmation information from at least one of (1) said
service provider and (2) said trusted intermediary financial
institution to said plurality of payors.
22. A means for making payments according to claim 21, wherein said
data processing system readable payment information includes: (a) a
payment record identifier for each payment obligation of said
plurality of payment obligations which has been satisfied; (b) an
identification of each negotiable instrument utilized by said
service provider to satisfy said plurality of payment
obligation.
23. A means for making payments according to claim 14, further
comprising: establishing a payor banking account for each of said
plurality of payors; allowing predefined access to said payor
banking account for each of said plurality of payors by said
trusted intermediary financial institution; establishing a service
provider banking account; allowing predefined access to said
service provider banking account by said trusted intermediary
financial institution; utilizing at least one data processing
system under control of said trusted intermediary financial
institution to transfer automatically funds between particular ones
of said payor banking accounts for each of said plurality of payors
and said service provider banking account in order to honor
verified ones of said plurality of negotiable instruments.
24. A means for making payments according to claim 23, wherein said
step of utilizing at least one data processing system under control
of said trusted intermediary financial institution to transfer
automatically funds comprises: means for utilizing at least one
data processing system under control of said trusted intermediary
financial institution to transfer automatically funds between
particular ones of said payor banking accounts for each of said
plurality of payors and said service provider banking account
utilizing electronic funds transfers in order to honor verified
ones of said plurality of negotiable instruments.
25. A means for making payments according to claim 24, further
comprising: means for grouping electronic funds transfer operations
for a predefined time interval for particular ones of said payor
banking accounts in order to minimize the number of electronic
funds transfers.
26. A means for making payments according to claim 24, further
comprising: means for providing with each of said plurality of
negotiable instruments a report which provides detailed information
relating to each payment obligation satisfied by said negotiable
instruments.
27. An improved method of making payments from a plurality of payor
entities to a plurality of payee entities through the coordinated
operation of said plurality of payor entities, a service provider,
and a trusted intermediary financial institution, comprising the
method steps of: utilizing at least one data processing system to
sort and format payment information from said plurality of payor
entities concerning a plurality of payment obligations;
communicating said payment information to said service provider and
said trusted intermediary financial institution; utilizing at least
one data processing system under control of said service provider
to consolidate said plurality of payment obligations from said
plurality of payor entities in accordance with at least one
predetermined consolidation criterion; directing a plurality of
negotiable instruments from said service provider to said plurality
of payees in order to satisfy said plurality of payment
obligations; utilizing at least one data processing system under
control of said trusted intermediary financial institution to (1)
verify said plurality of negotiable instruments, and (2)
automatically transfer funds in order to honor verified ones of
said plurality of negotiable instruments.
28. An improved method of making payments according to claim 27,
wherein said at least one consolidation criterion comprises
grouping said plurality of payment obligations by payee identity in
order to minimize the number of negotiable instruments
generated.
29. An improved method of making payments according to claim 27
further comprising the method steps of: communicating data
processing system readable payment authorization information from
said plurality of payor entities to said trusted intermediary
financial institution; and utilizing said at least one data
processing system under control of said trusted intermediary
financial institution to verify said plurality of said payment
authorization information from said plurality of payor
entities.
30. An improved method of making payments according to claim 29,
wherein said data processing system readable payment authorization
information includes: (a) a payment record identifier for each
payment obligation of said plurality of payment obligations; (b) an
identification of payment amounts for each payment obligation of
said plurality of payment obligations; and (c) an authorization
code uniquely associated with each payment record identifier.
31. An improved method of making payments according to claim 27,
further comprising: communicating data processing system readable
payment verification information from said service provider to said
trusted intermediary financial institution; utilizing said at least
one data processing system under control of said trusted
intermediary financial institution to verify said plurality of
negotiable instruments utilizing at least said data processing
system readable payment verification information from said service
provider.
32. An improved method of making payments according to claim 27,
wherein said data processing system readable payment verification
information includes: (a) an identification of each of said
plurality of negotiable instruments; (b) an identification of the
payment amount of each of said plurality of negotiable instruments;
and (c) an identification of each payment obligation satisfied by
each of said plurality of negotiable instruments.
33. An improved method of making payments according to claim 27,
further comprising the method steps of: communicating data
processing system readable payment authorization information from
said plurality of payor entities to said trusted intermediary
financial institution; communicating data processing system
readable payment verification information from said service
provider to said trusted intermediary financial institution;
utilizing said at least one data processing system under control of
said trusted intermediary financial institution to verify said
plurality of negotiable instruments utilizing both of (1) said data
processing system readable payment authorization information from
said plurality of payor entities, and (2) said data processing
system readable payment verification information from said service
provider.
34. An improved method of making payments according to claim 27,
further comprising the method step of: communicating data
processing system readable payment confirmation information from at
least one of (1) said service provider and (2) said trusted
intermediary financial institution to said plurality of payors.
35. An improved method of making payments according to claim 34,
wherein said data processing system readable payment information
includes: (a) a payment record identifier for each payment
obligation of said plurality of payment obligations which has been
satisfied; (b) an identification of each negotiable instrument
utilized by said service provider to satisfy said plurality of
payment obligations.
36. An improved method of making payments according to claim 27,
further comprising the method steps of: establishing a payor
banking account for each of said plurality of payors; allowing
predefined access to said payor banking account for each of said
plurality of payors by said trusted intermediary financial
institution; establishing a service provider banking account;
allowing predefined access to said service provider banking account
by said trusted intermediary financial institution; utilizing at
least one data processing system under control of said trusted
intermediary financial institution to transfer automatically funds
between particular ones of said payor banking accounts for each of
said plurality of payors and said service provider banking account
in order to honor verified ones of said plurality of negotiable
instruments.
37. An improved method of making payments according to claim 36,
wherein said step of utilizing at least one data processing system
under control of said trusted intermediary financial institution to
transfer automatically funds comprises: utilizing at least one data
processing system under control of said trusted intermediary
financial institution to transfer automatically funds between
particular ones of said payor banking accounts for each of said
plurality of payors and said service provider banking account
utilizing electronic funds transfers in order to honor verified
ones of said plurality of negotiable instruments.
38. An improved method of making payments according to claim 37,
further comprising: grouping electronic funds transfer operations
for a predefined time interval for particular ones of said payor
banking accounts in order to minimize the number of electronic
funds transfers.
39. An improved method of making payments according to claim 27,
further comprising: providing with each of said plurality of
negotiable instruments a printed report which provides detailed
information relating to each of said plurality of payment
obligations satisfied by said negotiable instruments.
40. An improved method of making payments from a plurality of payor
entities to a plurality of payee entities through a service
provider, comprising the method steps of: (a) obtaining
authorization from said plurality of payor entities which allows
said service provider to make payments on behalf of said plurality
of payor entities to said plurality of payee entities; (b)
arranging for at least one trusted intermediary financial
institution to periodically receive data processing system readable
payment information and payment authorization from said plurality
of payor entities, and to transfer automatically funds in amounts
consistent with at least said payment information to said service
provider; (c) said payment information and payment authorization
including at least: (1) a payment record identifier uniquely
associated with each payment obligation; (2) an identification of
payment amounts for each of said plurality of payment obligations;
and (3) an authorization code uniquely associated with each payment
record identifier. (d) periodically communicating data processing
system readable payment instructions from said plurality of payor
entities to said service provider; (e) said data processing system
readable payment instructions including at least: (1) an
identification of each of said plurality of payee entities; (2) an
identification of payment amounts for each of said plurality of
payee entities; and (3) a payment record identifier uniquely
associated with payment obligation; (f) utilizing said service
provider to (1) consolidate payment instructions from said
plurality of payor entities utilizing at least one data processing
system, (2) direct a negotiable instrument to each of said
plurality of payee entities, (3) generate payment verification
information for said negotiable instruments, and (4) communicate
said payment verification information to said trusted intermediary
financial institution; and (g) upon receipt of a negotiable
instrument from any of said plurality of payee entities, utilizing
said trusted intermediary financial institution to (1) verify said
request for payment, and (2) transfer funds between said plurality
of payor entities and said service provider to effect payment.
41. An improved method of making payments according to claim 40,
wherein said verification of said request for payment includes
utilizing at least said payment verification information.
42. An improved method of making payments according to claim 40,
wherein verification of said request for payment includes utilizing
at least said payment information and payment authorization.
43. An improved method of making payments according to claim 40,
wherein said step of obtaining authorization comprises: obtaining
authorization from said plurality of payor entities, which allows
said service provider to make payments on behalf of said payor
entities to said plurality of payee entities, substantially
concurrently with said step of periodically communicating payment
instructions from said plurality of payor entities to said service
provider.
44. An improved method of making payments according to claim 40,
wherein said step of arranging comprises: arranging for at least
one trusted intermediary financial institution to (1) periodically
receive payment information and payment authorization from said
plurality of payor entities, with said payment information and
payment authorization comprising an electronic record which is
transmittable within a distributed data processing system, and (2)
automatically transfer funds in amounts consistent with at least
said payment information to said service provider.
45. An improved method of making payments according to claim 40,
wherein each of said payment record identifiers comprise a
transaction identifier established by a particular one of said
plurality of payor entities to represent a particular payment
transaction.
46. An improved method of making payments according to claim 40,
wherein said payment information is arranged in a data block with a
plurality of predefined data fields provided to define at least:
(1) a payment record identifier uniquely associated with each
payment obligation; (2) an identification of payment amounts for
each of said plurality of payment obligations; and (3) an
authorization code uniquely associated with each payment record
identifier.
47. An improved method of making payments, according to claim 40:
wherein payment obligations arise from relationships monitored at
least by said plurality of payor entities; said method further
including: for each of said plurality of payor entities: (1)
searching at least one data base for at least one particular
payment obligation for a preselected time interval; and (2)
grouping payment obligations by at least identity of said plurality
of payee entities.
48. An improved method of making payments according to claim 40,
further including: (h) automatically generating a summary of
payment information for said plurality of payor entities; and (i)
periodically communicating said summary of payment information from
said plurality of payor entities to said service provider.
49. An improved method of making payments according to claim 48,
further including: (j) utilizing said summary of payment to
automatically perform a data integrity verification operation.
50. An improved method of making payments, according to claim 40,
wherein said trusted intermediary financial institution is utilized
to verify a request for payment by comparing information from said
negotiable instrument with positive pay reports provided by said
service provider, and then verifying payments with payment
information and payment authorization data communicated by said
plurality of payors.
51. An improved means for making payments from a plurality of payor
entities to a plurality of payee entities through a service
provider, comprising: (a) means for obtaining authorization from
said plurality of payor entities which allows said service provider
to make payments on behalf of said plurality of payor entities to
said plurality of payee entities; (b) means for periodically
communicating payment information and payment authorization from
said plurality of payor entities to at least one trusted
intermediary financial institution, (c) means for automatically
transferring funds in amounts only consistent with said payment
information to said service provider; (d) said payment information
including at least: (1) a payment record identifier uniquely
associated with each payment obligation; and (2) an identification
of payment amounts for each of said plurality of payment
obligations; and (3) an authorization code uniquely associated with
each payment record identifier; (e) means for periodically
communicating payment instructions from said plurality of payor
entities to said service provider; (f) said payment instructions
including at least: (1) an identification of each of said plurality
of payee entities; (2) an identification of payment amounts for
each of said plurality of payee entities; and (3) a payment record
identifier uniquely associated with each payment obligation; (g)
means for utilizing said service provider to (1) consolidate
payment instructions from said plurality of payor entities, (2)
direct a negotiable instrument to each of said plurality of payee
entities, (3) generate payment verification information for said
negotiable instruments, and (4) communicate said payment
verification information to said trusted intermediary financial
institution; and (h) means for receiving a negotiable instrument
from any of said plurality of payee entities, and utilizing said
trusted intermediary financial institution to (1) verify said
request for payment, and (2) automatically transfer funds between
said plurality of payor entities and said service provider in
amounts necessary to allow payment.
52. An improved means for making payments according to claim 51,
wherein said means for obtaining authorization comprises: means for
obtaining authorization from said plurality of payor entities,
which allows said service provider to make payments on behalf of
said payor entities to said plurality of payee entities,
substantially concurrently with said step of periodically
communicating payment instructions from said plurality of payor
entities to said service provider.
53. An improved means for making payments according to claim 51,
wherein each of said payment record identifiers comprises a payment
record identifier established by a particular one of said plurality
of payor entities to represent a particular payment
transaction.
54. An improved means for making payments according to claim 51,
wherein said payment information is arranged in a data block with a
plurality of predefined data fields provided to define at least:
(1) a payment record identifier uniquely associated with each
record payment; (2) an identification of payment amounts for each
of said plurality of payee entities; and (3) an authorization code
uniquely associated with each payment record identifier.
55. An improved means for making payments, according to claim 51:
wherein payment obligations arise from relationships monitored at
least by said plurality of payor entities; said improved means for
making payments further including: (i) means for searching at least
one data base for at least one particular relationship for a
preselected time interval; and (j) grouping payment obligations by
at least identity of said plurality of payee entities.
56. An improved means for making payments according to claim 51,
further including: (i) means for automatically generating a summary
of payment information for each of said plurality of payor
entities; and (j) means for periodically communicating said summary
of payment information from said plurality of payor entities to
said service provider.
57. An improved means for making payments according to claim 56,
further including: (k) means for utilizing said summary of payment
to perform automatically a data integrity verification
operation.
58. An improved method of making payments, according claim 51,
wherein said trusted intermediary financial institution is utilized
to verify a request for payment by comparing information from said
negotiable instrument with payment authorization data communicated
by said service provider.
59. An improved means for making payments from a plurality of payor
entities to a plurality of payee entities through a service
provider, comprising: (a) means for obtaining authorization from
said plurality of payor entities which allows said service provider
to make payments on behalf of said plurality of payor entities to
said plurality of payee entities; (b) means for periodically
communicating payment information and payment authorization from
said plurality of payor entities to at least one trusted
intermediary financial institution, (c) data processing implemented
means for automatically transferring funds in amounts only
consistent with said payment information to said service provider;
(d) said payment information and payment authorization including at
least: (1) a payment record identifier uniquely associated with
each payment obligation; (2) an identification of payment amounts
for each of said plurality of payment obligations; and (3) an
authorization code uniquely associated with each payment record
identifier; (e) means for periodically communicating payment
instructions from said plurality of payor entities to said service
provider; (f) said payment instructions including at least: (1) an
identification of each of said plurality of payee entities; (2) an
identification of payment amounts for each of said plurality of
payee entities; and (3) a payment record identifier uniquely
associated with each payment obligation; (g) data processing
implemented means for utilizing said service provider to (1)
consolidate payment instructions from said plurality of payor
entities, (2) direct a negotiable instrument to each of said
plurality of payee entities, (3) generate payment verification
information for said negotiable instruments, and (4) communicate
said payment verification information to said trusted intermediary
financial institution; and (h) data processing implemented means
for receiving a negotiable instrument from any of said plurality of
payee entities, and utilizing said trusted intermediary financial
institution to (1) verify said request for payment, and (2) support
the automatic transfer of funds between said plurality of payor
entities and said service provider in amounts necessary to allow
payment.
60. An improved means for making payments according to claim 59,
wherein said means for obtaining authorization comprises: means for
obtaining authorization from said plurality of payor entities,
which allows said service provider to make payments on behalf of
said payor entities to said plurality of payee entities,
substantially concurrently with said step of periodically
communicating payment instructions from said plurality of payor
entities to said service provider.
61. An improved means for making payments according to claim 59,
wherein each of said payment record identifier comprises a payment
record identifier established by a particular one of said plurality
of payor entities to represent a particular payment
transaction.
62. An improved means for making payments according to claim 59,
wherein said payment information is arranged in a data block with a
plurality of predefined data fields provided to define at least:
(1) a payment record identifier uniquely associated with each
payment obligation; (2) an identification of payment amounts for
each of said payment obligations; and (3) an authorization code
uniquely associated with each payment record identifier.
63. An improved means for making payments, according to claim 59:
wherein payment obligations arise from relationships monitored at
least by said plurality of payor entities; said improved means for
making payments further including: (i) data processing implemented
means for searching at least one data base for at least one
particular payment for a preselected time interval; and (j)
grouping payment obligations by at least identity of said plurality
of payee entities.
64. An improved means for making payments according to claim 59,
further including: (i) data processing implemented means for
automatically generating a summary of payment information for each
of said plurality of payor entities; and (j) data processing
implemented means for periodically communicating said summary of
payment information from said plurality of payor entities to said
service provider.
65. An improved means for making payments according to claim 64,
further including: (k) data processing implemented means for
utilizing said summary of payment information to perform
automatically a data integrity verification operation.
66. An improved method of making payments, according to claim 59,
wherein said trusted intermediary financial institution utilizes a
data processing system to compare payment verification information
with said negotiable instrument, and then verify a request for
payment by comparing information from said negotiable instrument
with payment information and payment authorization data
communicated by said plurality of payor entities.
67. An improved means for making payments according to claim 59,
further including: data processing implemented means for
correlating said negotiable instruments generated by said service
provider and said payment information and payment authorization
which was communicated by said plurality of payors to said at least
one trusted intermediary financial institution.
68. An improved method in a distributed data processing system of
making payments from a plurality of payor entities to a plurality
of payee entities through a service provider, comprising the method
steps of: (a) obtaining authorization from said plurality of payor
entities which allows said service provider to make payments on
behalf of said plurality of payor entities to said plurality of
payee entities; (b) arranging for at least one trusted intermediary
financial institution to periodically receive through said
distributed data processing system (1) payment identification
information (2) payment information and (3) payment authorization
and payment information from said plurality of payor entities, and
automatically transfer funds through said distributed data
processing system in amounts only consistent with said payment
information to said service provider; (c) said payment information
including at least: (1) a payment record identifier uniquely
associated with payment obligation; (2) an identification of
payment amounts for each of said payment obligations; and (3) an
authorization code uniquely associated with each payment record
identifier; (d) periodically communicating through said distributed
data processing system payment instructions from said plurality of
payor entities to said service provider; (e) said payment
instructions including at least: (1) an identification of each of
said plurality of payee entities; (2) an identification of payment
amounts for each payment obligation; and (3) a payment record
identifier uniquely associated with each payment amount; (f)
utilizing said service provider to (1) consolidate payment
instructions from said plurality of payor entities, (2) direct a
negotiable instrument to each of said plurality of payee entities,
(3) generate payment verification information for said negotiable
instruments, and (4) communicate said payment verification
information to said trusted intermediary financial institution
through said distributed data processing system; and (g) upon
receipt of a negotiable instrument from any of said plurality of
payee entities, utilizing said trusted intermediary financial
institution to (1) verify said request for payment, and (2)
automatically transfer funds through said distributed data
processing system between said plurality of payor entities and said
service provider, necessary to allow payment.
69. An improved method of making payments according to claim 68,
wherein said payment information is arranged in a data block with a
plurality of predefined data fields provided to define at least:
(1) a payment record identifier uniquely associated with each
payment obligation; (2) an identification of payment amounts for
each of said payment obligations; and (3) an authorization code
uniquely associated with each payment record identifier.
70. An improved method of making payments, according to claim 68:
wherein payment obligations arise from relationships monitored at
least by said plurality of payor entities; said improved method of
making payments further including: for each of said plurality of
payor entities: (1) utilizing said distributed data processing
system for searching at least one data base for at least one
particular payment obligation for a preselected time interval; and
(2) utilizing said distributed data processing system for grouping
payment obligations by at least identity of said plurality of payee
entities.
71. An improved method of making payments according to claim 68,
further including: (h) utilizing said distributed data processing
system for automatically generating a summary of payment
information for each of said plurality of payor entities; and (i)
utilizing said distributed data processing system for periodically
communicating said summary of payment information from said
plurality of payor entities to said service provider.
72. An improved method of making payments according to claim 71,
further including: (j) utilizing said distributed data processing
system for utilizing said summary of payment to automatically
perform a data integrity verification operation.
73. An improved method of delivering payment information from a
plurality of payor entities to a plurality of payee entities
through the coordinated operation of the plurality of payor
entities and a service provider comprising the method steps of:
utilizing at least one data processing system to sort and format
payment information from said plurality of payor entities
concerning a plurality of payment obligations; communicating said
payment information to said service provider; utilizing at least
one data processing system under control of said service provider
to consolidate said payment information concerning said plurality
of payment obligations from said plurality of payor entities in
accordance with at least one predetermined consolidation criterion;
directing payments to said plurality of payees in order to satisfy
said plurality of payment obligations; directing consolidated
payment information, independently of said payments, from said
service provided to said plurality of payees.
74. An improved method of delivering payment information according
to claim 73, wherein said at least one consolidation criterion
comprises grouping said payment information by payee identity.
75. An improved method of delivering payment information according
to claim 73, wherein said step of directing payments comprises:
initiating electronic funds transfers from said plurality of payor
entities to said plurality of payee entities.
76. An improved method of delivering payment information according
to claim 73, wherein said step of directing payments comprises:
directing negotiable instruments from said plurality of payor
entities to said plurality of payee entities.
77. An improved method of delivering payment information according
to claim 73, wherein said step of directing payments comprises:
utilizing a payment service provider to direct negotiable
instruments to said plurality of payee entities on behalf a said
plurality of payor entities.
78. An improved method of delivering payment information according
to claim 73, wherein said step of directing payments comprises:
utilizing a payment service provider to consolidate payment
obligations and to direct negotiable instruments to said plurality
of payee entities on behalf a said plurality of payor entities.
79. An improved method of delivering payment information according
to claim 73, wherein said step of directing payments comprises:
utilizing a payment service provider to initiate electronic funds
transfers to said plurality of payee entities on behalf a said
plurality of payor entities.
80. A method of delivering payment information according to claim
73, wherein said step of communicating comprises: communicating
electronically said payment information to said service
provider.
81. A method of delivering payment information according to claim
73, wherein said step of directing consolidated payment information
comprises: communicating electronically said consolidated payment
information, independently of said payments, from said service
provider to said plurality of payees.
82. A method of delivering payment information according to claim
73, wherein said step of utilizing said at least one data
processing system to sort and format includes: utilizing at least
one data processing system to sort said payment information by at
least one of (1) payee identity and (2) a preselected time
interval.
83. A method of delivering payment information according to claim
73, wherein said step of utilizing said at least one data
processing system to sort and format includes: utilizing at least
one data processing system to sort said payment information by at
least one of (1) payee identity and (2) a preselected time
interval; and utilizing at least one data processing system to
format said payment information by performing at least one of (1)
arranging said payment information, and (2) encoding said payment
information.
84. A method of delivering payment information according to claim
73, wherein said step of directing consolidated payment information
comprises: communicating electronically consolidated payment
information, independently of said payments, from said information
service provider to said plurality of payees, without requiring
active interaction between said information service provider and
said plurality of payees.
85. A method of delivering payment information according to claim
73, wherein said step of directing consolidated payment information
comprises: communicating printed consolidated payment information,
independently of said payments, from said information service
provider to said plurality of payees, without requiring active
interaction between said information service provider and said
plurality of payees.
Description
BACKGROUND OF THE INVENTION
[0001] 1. Field of the Invention
[0002] The present invention in general relates to automated
techniques for making payments, and in particular relates to
systems for consolidating and streamlining payment activities
through the utilization of a third party payment service provider.
The present invention also relates to a system which allows for the
delivery of payment information independent of the payment
activity.
[0003] 2. Description of the Prior Art
[0004] Accounting and disbursement procedures for oil and gas
activities are rather complicated. Typically, the oil and/or gas
producing properties have royalty and working interest payments
which are due many times throughout the year to a large number of
individuals. As time passes, the number of individuals and
companies who expect, and do, receive payment from the party
responsible for the payment of funds increases, while the amounts
due to them decreases. An increase in the number of payees occurs
as royalty and working interests are passed down through the
generations and amounts due to the payees decreases, both due both
to this division of ownership, and declining production from the
properties. In some cases, the payments are so small that the
transaction costs associated with making the distributions are
disproportionately and uneconomically large. Sometimes, the
printing, postage and administrative costs are significant when
compared to the payment due to those individuals having a marginal
or negligible interest in the property.
[0005] A similar problem occurs in the accounting and payment
activities for governmental entitlement programs. This is
especially true since typically each entitlement program has an
associated accounting and disbursement burden. The standards for
eligibility to the available entitlement programs include common
factors such as income level, age, and disability status. A citizen
that is entitled to benefits under one entitlement program is
generally eligible for entitlement benefits from other types of
entitlement programs. Therefore, there is considerable duplication
of efforts in the accounting and disbursement systems for
governmental entitlement programs.
[0006] Similar problems arise for the accounting and disbursement
systems for investment instruments such as stocks and bonds.
Payments, such as dividends, are typically made at least once a
year for such financial instruments. If a company's economic
performance is poor, the dividends may be small or negligible in
value. Additionally, over the last decade, an increase in
investment activities by relatively small unsophisticated
investment entities, (e.g., individuals) has resulted in smaller
and smaller blocks of stock being held for long intervals by such
entities. The cost and burden associated with the reporting and
payment of dividends to such small investors are significant. In
some instances, the printing, postage and administrative costs are
significant when compared to the dividend amounts actually
paid.
[0007] The three specific examples discussed above (the oil and gas
industry, government entitlement programs, and the investment
industry) share common features. First, a payment obligation exists
for a multitude of payor entities. A relatively large number of
payee entities expect regular payments from the payors. Secondly,
it is likely that any particular payee entity expects payments from
multiple payor entities. For example, an individual who actively
invests in oil and gas exploration projects is likely to expect
payments from several payor entities. Likewise an unemployed,
disabled, or impoverished individual is likely to expect multiple
payments from governmental entities under a variety of entitlement
programs. Likewise, an investor is likely to expect regular
dividends from multiple payor entities. Third, the payments being
made from the payor entities to the payee entities is frequently
disproportionately small in comparison with the administrative and
direct expenses associated with making such payment. For example,
in the oil and gas industry, it is common for an investor to
receive relatively small (and frequently decreasing) royalty or
working interest payments from payor entities. Likewise, as
governmental entitlement programs are reduced in size and scope due
to budget constraints, the payments which are made from the payor
entities to the payee entities are decreasing in amount, while the
expense associated with administering and making payments increases
at least in an amount comparable to inflation. Likewise, in
economic downturns, it is not uncommon for an investor to receive
rather insignificant dividends from a variety of payor entities.
Fourth, while the expense associated with making such payments may
be large in comparison to the amount of the payments, such payments
must nevertheless be made with regularity in order to prevent the
loss of investor confidence (in the case of the oil and gas or
investment industries) and in order to fulfill statutory and
regulatory obligations (in the case of the oil and gas industry and
entitlement programs). Fifth, independently of how payments are
made, a relatively large number of entities may expect from the
payors periodic reporting relating to the payments which are
mandated by contract, statute, or regulation.
[0008] Numerous other commercial and financial arrangements exist
which present similar problems, insofar as the administrative and
expense burden associated with an accounting and distribution
system is frequently disproportionately large in comparison with
the amount of the payments being made. These other examples will
not be discussed in this present application, in order to simplify
this description, but can nonetheless be improved through the
present invention.
SUMMARY OF THE INVENTION
[0009] It is one objective of the present invention to provide an
improved method and apparatus for making payments which allows a
service provider to make payments, on behalf of a plurality of
payor entities, to a plurality of payee entities, in a manner which
greatly reduces the operating and administrative costs for
accounting and disbursement activities, and which greatly
streamlines and consolidates the payment activities and provides
highly organized and consolidated information to the plurality of
payee entities.
[0010] It is another objective of the present invention to provide
an improved method of making payments which allows the service
provider to achieve the foregoing efficiencies in coordinated
activity with at least one trusted intermediary financial
institution, which transfers funds between the plurality of payor
entities, the service provider, and the plurality of payee entities
in a manner which maximizes security and accountability, and which
in particular minimizes the opportunity for fraudulent activities
by either the service provider or by payee entities (or individuals
falsely presenting themselves as payee entities).
[0011] It is another objective of the present invention to attain
the foregoing objectives in a highly automated manner, and in
particular in a manner which relies heavily upon the electronic
communication of data and the electronic transferring of funds.
[0012] These and other objectives are achieved as is now described.
When characterized as an improved method of making payments from a
plurality of payor entities to a plurality of payee entities
through a service provider, the invention consists of a number of
method steps which will now be described. First, authorization is
obtained from a plurality of payor entities which allows a service
provider to make payments, on behalf of the plurality of payor
entities, to a plurality of payee entities. Then at least one
trusted intermediary financial institution is selected. The trusted
intermediary financial institution periodically receives payment
information and payment authorization from the plurality of payor
entities. The trusted intermediary financial institution
automatically transfers funds, in amounts only consistent with the
payment information, to the service provider upon verification of
payment authorization. Preferably, the payment information includes
at least (1) an identification of each of the plurality of payee
entities; (2) an identification of payment amounts for each of the
plurality of payee entities; (3) a payment record identifier (also
referred to as a "virtual check number") which is uniquely
associated with each payment; and (4) an authorization code which
is uniquely associated with each payment record identifier.
[0013] Additionally, payment instructions are periodically
communicated from the plurality of payor entities to the service
provider. The payment information includes at least (1) an
identification of each of the plurality of payee entities, (2) an
identification of payment amounts for each of the plurality of
payee entities; and (3) a payment record identifier which is
uniquely associated with each payment amount such as a "virtual
check number".
[0014] Then, the service provider is utilized to (1) consolidate
payment instructions from the plurality of payor entities, (2)
direct a negotiable instrument, in an amount equal to the
consolidated payments, to each of the plurality of payee entities,
(3) generate payment verification information for the negotiable
instruments (such as "positive pay" data), and (4) communicate the
payment verification information to the trusted intermediary
financial institution. Upon receipt of the negotiable instrument
from any of the plurality of payee entities, the trusted
intermediary financial institution is utilized to (1) verify the
request for payment, and (2) automatically transfer funds between
the plurality of payor entities and the service provider in amounts
necessary to allow payment (or "honoring of") the negotiable
instrument.
[0015] This improved method of making payments is highly
advantageous for at least the following reasons:
[0016] (1) The present invention increases efficiency and decreases
cost in accordance with economy-of-scale principles. The service
provider is utilized to consolidate payment information and
payments, from any number of payor entities, in a manner which
eliminates the duplication of effort and expenses inherent in the
uncoordinated operation of the payors' accounting and disbursement
systems. Additionally, the cost benefits associated with the
outsourcing of services can be obtained.
[0017] (2) The present invention increases efficiency and decreases
cost without introducing any increased business risk. While the
service provider acts as a payment agent for the plurality of payor
entities, the trusted intermediary financial institution is able to
tightly control the flow of funds, so that the service provider
need not be trusted with large sums; the trusted intermediary
financial institution may be a well known and trusted financial
institution, such as a bank, so the funds for the payments are not
exposed to any unnecessary or unusual commercial risks;
alternatively, the trusted intermediary financial institution may
be any trusted institution that will direct the transfer of funds
from one or more banks.
[0018] (3) The present invention enhances the communication of
information to the payee entities. A substantial amount of payment
information can be passed from the payor entities, through the
service provider, to the payee entities; this information may be
arranged in a manner which renders the information more useful to
the payee entities, making it easier to keep accurate financial
records for internal accounting, reporting, and tax filing
activities.
[0019] (4) The present invention allows the payor entities to
maintain general control over the payment process. The payment
information and payment authorization which is communicated from
the plurality of payor entities to the trusted intermediary
financial institution includes an authorization code which is
uniquely associated with each payment; however, this authorization
code is not communicated or revealed to the service provider, and
provides a means for allowing secure communication between a
particular payor entity and the trusted intermediary financial
institution.
[0020] (5) The present invention increases security of a payment
system by minimizing the opportunity for alteration of the
negotiable instruments. The service provider consolidates payments
and generates a negotiable instrument which is either communicated
electronically or through conventional postal services to the
plurality of payee entities. For each negotiable instrument
(whether in electronic form or in printed check form) the service
provider generates payment verification information (such as
"positive pay" information) which is communicated to the trusted
intermediary financial institution. When the negotiable instruments
are presented to the trusted intermediary financial institution,
the payment verification information is utilized to verify the
request for payment, to minimize the opportunity for fraudulent
manipulation or reconstruction of a negotiable instrument with an
altered payment amount or altered check number; therefore, the
payment verification information typically includes an
identification of the negotiable instrument and an identification
of the amount of the negotiable instrument. The service provider
can compare a presented negotiable instrument for both the
identification of the payee for the instrument and the amount of
the instrument in order to avoid making payment on a negotiable
instrument which has been fraudulently manipulated or reconstructed
to alter the identity of the payee or the check number or the
amount due. This greatly increases the security of the payment
system.
[0021] (6) The present invention allows the payor entities maximum
control and use of the funds set aside for the payments. Upon
presentation of a negotiable instrument, the trusted intermediary
financial institution will make automatic funds transfers to move
funds between the bank accounts of particular ones of the plurality
of payor entities and the service provider. This is advantageous
insofar as it allows the plurality of payor entities to maintain
control of the funds and obtain, where permissible, interest on, or
otherwise use, the funds which have been set aside for the payments
up until the time that the negotiable instrument is actually
presented to the trusted intermediary financial institution in a
demand for payment. Typically, the payor entities are sufficiently
large and sophisticated to maximize the use of capital, even for
relatively short intervals. It is advantageous that the present
invention does not require that funds be deposited with, or held
by, the service provider; consequently, the payor entities have the
benefit of an interval of use of these funds which is comparable to
the "float" that can be obtained by utilizing negotiable
instruments.
[0022] (7) The present invention allows for the maximum use of data
processing systems in effecting payment. Payment information and
payment instructions may be retrieved and organized utilizing data
processing implemented instructions. The payment information and
payment instructions may be provided to the service provider in
digital form, and may be communicated over a distributed data
processing system. Likewise, the payment authorization and payment
instructions may be communicated electronically to the at least one
trusted intermediary financial institution. The payment
verification information may be communicated electronically to the
at least one trusted intermediary financial institution.
Additionally, the funds transfers may be accomplished utilizing
conventional electronic funds transfers, such as E.F.T. or
E.D.I.B.A.N.X.
[0023] In one particular embodiment of the present invention, a
service provider may be utilized to consolidate and deliver payment
information from a plurality of payor entities to a plurality of
payee entities, even though the service provider may not perform
payment activities on behalf of the plurality of payor entities.
This provides a significant advantage over the prior art, insofar
as it allows the plurality of payor entities to satisfy financial
obligations, without personally satisfying the associated reporting
obligation. This minimizes the administrative and other costs
associated with making of payments, and thus allowing the payor
entities to efficiently "outsource" the reporting obligations,
while maintaining tight control over the satisfaction of the
payment obligations.
[0024] These objectives may be obtained by the improved method of
delivering payment information according to the present invention.
To characterize this method, the invention is directed to an
improved method of delivering payment information from a plurality
of payor entities to a plurality of payee entities coordinated in
operation of the plurality of payor entities in the information
service provider. At least one data processing system is utilized
to sort and format payment information of the plurality of entities
concerning the plurality of payment obligations. Payment
information is communicated to the information service provider. At
least one data processing system is utilized, which is under the
control of the information service provider, to consolidate the
payment information concerning the plurality of payment obligations
from a plurality of payor entities in accordance with at least one
predetermined consolidation criterion. Preferably, the
predetermined consolidation criterion comprises grouping the
payment information by for each payee identity, in order to obtain
efficiencies in reporting information due a plurality of payees.
Then, the payments are directed to the plurality of payees by the
plurality of payors in order to satisfy the plurality of payment
obligations. The information service provider operates
independently of the plurality of payors to direct consolidated
payment information to the plurality of payees, without requiring
active interaction between the information service provide and the
plurality of payees. Preferably, the consolidated payment
information is communicated either electronically or in printed
format from the information service provider to the plurality of
payees. The plurality of payees are not required to interact,
electronically, or otherwise, with the information service provider
in order to obtain this information. In alternative embodiments,
the plurality of payor entities may utilize one service provider to
direct negotiable instruments to the plurality of payees, while
using another service provider to direct consolidated financial
information (such as payment information) to the plurality of
payees, with each of the service providers operating independently
of one another.
[0025] Additional objectives, features and advantages will be
apparent in the written description which follows.
BRIEF DESCRIPTION OF THE DRAWINGS
[0026] The novel features believed characteristic of the invention
are set forth in the appended claims. The invention itself,
however, as well as a preferred mode of use, further objectives and
advantages thereof, will best be understood by reference to the
following detailed description of an illustrative embodiment when
read in conjunction with the accompanying drawings, wherein:
[0027] FIG. 1 is a schematic depiction of the improved payment
system of the present invention;
[0028] FIG. 2 is a schematic depiction of a distributed data
processing system which may be utilized to effect the improved
payment system of the present invention;
[0029] FIG. 3 is a pictorial representation of a data processing
system which may be utilized to implement the improved payment
system of the present invention;
[0030] FIG. 4 is a pictorial representation in broad overview of
the steps of the preferred improved payment system of the present
invention;
[0031] FIGS. 5, 6, and 7 are pictorial representations of
authorizations for payment in accordance with the preferred
embodiment of the improved payment system of the present
invention;
[0032] FIG. 8 is a flowchart representation of one technique for
generating payment information for a particular one of a plurality
of payor entities, in accordance with the improved payment system
of the present invention, for oil and gas payment activities;
[0033] FIG. 9 is a pictorial representation of a format report for
a check summary report, in accordance with one preferred embodiment
of the present invention, which arranges payment information in a
data block which facilitates the electronic communication of
information from a particular payor entity to a service
provider;
[0034] FIG. 10 is a flowchart representation of a data processing
implemented generation of the data blocks for a check summary
report in accordance with FIG. 9;
[0035] FIG. 11 is a pictorial representation of a format report for
a check detail report for oil and gas revenue distributions, in
accordance with one embodiment of the present invention;
[0036] FIG. 12 is a pictorial representation of a format report for
a check detail report for government agency distributions, in
accordance with one embodiment of the present invention;
[0037] FIG. 13 is a pictorial representation of a format report for
a check detail report for stock dividend distribution, in
accordance with one embodiment of the present invention;
[0038] FIG. 14 is a flowchart representation of a data processing
implemented compilation of payment obligation records.
[0039] FIG. 15 is a pictorial representation of a format report for
an end record report, which may be utilized for data communications
integrity verification, in accordance with one particular
embodiment of the present invention;
[0040] FIG. 16 is a flowchart representation of a data processing
implementation of the automatic generation of an end record report
in accordance with FIG. 15;
[0041] FIGS. 17, 18, 19, and 20 depict and describe a data block
which is generated in accordance with one preferred embodiment of
the present invention, which is utilized to communicate payment
information to a service provider;
[0042] FIG. 21 is a pictorial representation of a format report for
an approved pay sheet which is communicated from a particular payor
entity to a particular trusted intermediary financial
institution;
[0043] FIG. 22 is a flowchart representation of a data processing
implemented generation and utilization of an approved pay sheet in
accordance with FIG. 21;
[0044] FIGS. 23A, 23B, and 23C are pictorial representation of a
format report for a positive pay report which is provided by a
service provider to a trusted intermediary financial institution,
and which is utilized to verify a demand for payment when a
negotiable instrument is presented to the trusted intermediary
financial institution by a payee;
[0045] FIG. 24 is a flowchart representation of the data processing
implemented generation of a positive pay report in accordance with
FIG. 23;
[0046] FIG. 25 is a pictorial representation of an exemplary
positive pay transmission from a service provider to a trusted
intermediary financial institution, in accordance with one
particular embodiment of the present invention;
[0047] FIG. 26 is a pictorial representation of a data dictionary
which may be utilized in conjunction with several of the foregoing
figures to define particular data fields;
[0048] FIG. 27 is a pictorial representation of an exemplary report
which may be provided by a service provider in accordance with the
present invention to a particular payee, for the oil and gas
industry;
[0049] FIG. 28 is a pictorial representation of an exemplary report
which may be provided by a service provider in accordance with the
present invention to a particular payee, for government entitlement
and other programs;
[0050] FIG. 29 is a pictorial representation of an exemplary report
which may be provided by a service provider in accordance with the
present invention to a particular payee, for stock dividend
payments;
[0051] FIG. 30 is a flowchart depiction of a data processing
implemented verification of positive pay and authorization
information, in accordance with one particular embodiment of the
present invention;
[0052] FIG. 31 is a flowchart depiction of a data processing
implemented confirmation of payment activities which is provided to
the plurality of payor entities; and
[0053] FIG. 32 is a pictorial representation of the preferred
improved information reporting system of the present invention;
[0054] FIG. 33 is a flowchart representation of the steps which
must be implemented in order to perform the information reporting
activities; and
[0055] FIG. 34 is a pictorial representation of an exemplary
informational report.
DETAILED DESCRIPTION OF THE INVENTION
[0056] FIG. 1 is a pictorial representation of an improved method
and apparatus of making payments in accordance with the present
invention. A plurality of payor entities 15 (including subscribers
19, 21, 23, and 25) have obligations to a plurality of payee
entities 17 (including payees 27, 29, 31, and 33). In accordance
with the present invention a service provider 11 operates to make
those payments on behalf of the plurality of payor entities 15 to
the plurality of payee entities 17. The activities of service
provider 11 are coordinated with at least one trusted intermediary
financial institution 13. In accordance with the present invention,
service provider 11 obtains authorization from the plurality of
payor entities 15, which allows the service provider 11 to make
payments on behalf of the plurality of payor entities 15 to the
plurality of payee entities 17. Preferably, service provider 11
generates negotiable instruments and directs them to the plurality
of payee entities 17. The plurality of payee entities 17 utilize
the payee banks 47, 49, 51, and 53 (collectively 37) to make a
series of presentments of the negotiable instruments, in order to
obtain payment. The negotiable instruments are typically routed for
collection, for example, through automated clearing houses such as
automated clearing house 55. Preferably, the negotiable instruments
generated by service provider 11 are drawn on one or more accounts
set up with trusted intermediary financial institution 13.
Accordingly, those negotiable instruments are ultimately presented
through automated clearing house 55 (and other automated clearing
houses) to trusted intermediary financial institution 13, for
payment. In accordance with the present invention, arrangements are
made for the trusted intermediary financial institution 13 to
periodically receive payment information and payment authorization
from the plurality of payor entities 15. Additionally, the trusted
intermediary financial institution 13 is authorized to
automatically transfer funds to the service provider's 11
disbursement account in amounts consistent with the payment
information and payment authorization (that is, not a greater or
lesser amount).
[0057] Preferably, the payment information includes an
identification of payment amounts for each of the plurality of
payee entities 17, a payment record identifier (such as a "virtual
check number") which is uniquely associated with each payment
amount, and an authorization code which is associated with each
payment identifier. The payment information may optionally include
an identification of each of the plurality of payee entities 17.
The authorization code can be a preestablished character string
which is uniquely associated with each payment identifier, or it
can be a character string generated by a random number generator or
similar algorithm. The authorization code can serve as a password
which allows secure verbal communication between the trusted
intermediary financial institution(s) and the plurality of
payor(s), since the trusted intermediary can request that a
purported payor correctly identify the authorization code prior to
revealing confidential information.
[0058] Also, in accordance with the present invention, payment
instructions are periodically communicated from the plurality of
payor entities 15 to service provider 11. The payment instructions
include at least (1) an identification of each of the plurality of
payee entities 17; (2) an identification of payment amounts for
each of the plurality of payee entities 17; and (3) a payment
record identifier uniquely associated with each payee entity.
[0059] In accordance with the present invention, the service
provider 11 is utilized to (1) consolidate payment instructions
from the plurality of payor entities 15; (2) direct a negotiable
instrument to each of the plurality of payee entities 17; (3)
generate payment verification information (such as, for example,
"positive pay" information) for the negotiable instruments; and (4)
communicate the payment verification information to the trusted
intermediary financial institution 13. In accordance with the
present invention, the payment verification information contains
the information which is necessary to minimize the risk associated
with altered or fraudulent negotiable instruments. In particular,
at least the payment amount of a negotiable instrument is
communicated from service provider 11 to trusted intermediary
financial institution 13. When a negotiable instrument is
ultimately presented to trusted intermediary financial institution
13, the trusted intermediary financial institution 13 may compare a
negotiable instrument with the payment verification information in
order to verify the payment amount. For each negotiable instrument,
upon receipt thereof, trusted intermediary financial institution 13
is utilized to verify the request for payment and automatically
transfer funds between accounts for the plurality of payor entities
15 and service provider 11, in amounts necessary to effect payment.
Preferably, these automatic transfers are accomplished utilizing
conventional electronic funds transfer technology or E.D.I.B.A.N.X.
transfer technology which are hereinafter collectively referred to
as "electronic fund transfer(s)". In this manner, the disbursement
account or accounts of service provider 11 with trusted
intermediary financial institution 13 need not be funded in any
amount whatsoever. Upon presentation of the negotiable instrument
(typically, the instrument is passed through one or more banks
including payee banks 37 and automated clearing house 55, trusted
intermediary financial institution can perform conventional and
automatic electronic funds transfers or E. D. B.A.N.X. transfers,
typically by batch process at predetermined time intervals, (once
the request for payment is validated) in order to fund the
transaction and allow payment.
[0060] In the preferred embodiment of the present invention, a
distributed data processing system is utilized to perform many or
all of the above identified functions. This greatly increases the
speed and efficiency of operation and reduces the possibility of
human error. A distributed data processing system is depicted in
FIG. 2, and a personal computer is depicted in FIG. 3. The
distributed data processing system and the personal computer can be
utilized in accordance with the present invention to automate many
or all of the significant operations of the improved method of
making payments of the present invention.
[0061] With reference now to the figures and in particular with
reference to FIG. 2, there is depicted a pictorial representation
of a distributed data processing system 108 which may be utilized
to implement the method and system of the present invention. As may
be seen, distributed data processing system 108 may include a
plurality of networks, such as Local Area Networks (LAN) 110 and
132, each of which preferably includes a plurality of individual
computers 112 and 130, respectively. Of course, those skilled in
the art will appreciate that a plurality of Intelligent Work
Stations (IWS) coupled to a host processor may be utilized for each
such network.
[0062] As is common in such data processing systems, each
individual computer may be coupled to a storage device 114 and/or a
printer/output device 116. One or more such storage devices 114 may
be utilized, in accordance with the method of the present
invention, to store the various data objects or documents which may
be periodically accessed and processed by a user within distributed
data processing system 108, in accordance with the method and
system of the present invention. In a manner well known in the
prior art, each such data processing procedure or document may be
stored within a storage device 114 which is associated with a
Resource Manager or Library Service, which is responsible for
maintaining and updating all resource objects associated
therewith.
[0063] Still referring to FIG. 2, it may be seen that distributed
data processing system 108 may also include multiple mainframe
computers, such as mainframe computer 118, which may be preferably
coupled to Local Area Network (LAN) 110 by means of communications
link 122. Mainframe computer 118 may also be coupled to a storage
device 120 which may serve as remote storage for Local Area Network
(LAN) 110. Other Local Area Networks (LAN) 132 may be coupled to
Local Area Network (LAN) 110 via communications controllers 126 and
communications links 134 to gateway servers 128. Gateway server 128
is preferably an individual computer or Intelligent Work Station
(IWS) which serves to link Local Area Network (LAN) 132 to Local
Area Network (LAN) 110.
[0064] As discussed above with respect to Local Area Network (LAN)
132 and Local Area Network (LAN) 110, a plurality of data
processing procedures or documents may be stored within storage
device 120 and controlled by mainframe computer 118, as Resource
Manager or Library Service for the data processing procedures and
documents thus stored.
[0065] Of course, those skilled in the art will appreciate that
mainframe computer 118 may be located a great geographical distance
from Local Area Network (LAN) 110 and similarly Local Area Network
(LAN) 110 may be located a substantial distance from Local Area
Network (LAN) 132. That is, Local Area Network (LAN) 132 may be
located in California while Local Area Network (LAN) 110 may be
located within Texas and mainframe computer 118 may be located in
New York. In the view of FIG. 2, payor 15, service provider 11, and
trusted intermediary financial institution 13 may be in possession
and/or control of various local area networks, and in either
continuous or intermittent communication with one another in order
to accomplish the objectives of the present invention.
[0066] With reference to FIG. 3, there is depicted a pictorial
representation of data processing system 210 which may be
programmed in accordance with the present invention. As may be
seen, data processing system 210 includes processor 212 which
preferably includes a graphics processor, memory device and central
processor (not shown). Coupled to processor 212 is video display
214 which may be implemented utilizing either a color or
monochromatic monitor, in a manner well known in the art. Also
coupled to processor 212 is keyboard 216. Keyboard 216 preferably
comprises a standard computer keyboard which is coupled to the
processor by means of cable 218.
[0067] Also coupled to processor 212 is a graphical pointing
device, such as mouse 220. Mouse 220 is coupled to processor 212,
in a manner well known in the art, via cable 222. As is shown,
mouse 220 may include left button 224, and right button 226, each
of which may be depressed, or "clicked", to provide command and
control signals to data processing system 210. While the disclosed
embodiment of the present invention utilizes a mouse, those skilled
in the art will appreciate that any graphical pointing device such
as a light pen or touch sensitive screen may be utilized to
implement the method and apparatus of the present invention. Upon
reference to the foregoing, those skilled in the art will
appreciate that data processing system 210 may be implemented
utilizing a so-called personal computer.
[0068] FIG. 4 is a flow representation of the preferred method and
apparatus of making payments, in accordance with a preferred
embodiment of the present invention. As is shown, there is
interaction between service provider 11, payors 19, 21, 23, trusted
intermediary financial institution 13, and payees 27, 29, 31.
Preferably, the interaction between service provider 11, payors 19,
21, 23, and trusted intermediary financial institution 13 is
accomplished utilizing data processing implemented steps.
Interaction between those entities and payees 27, 29, 31 may or may
not be conducted utilizing data processing implemented steps. The
flow of FIG. 4 provides considerable detail regarding the
relationship between service provider 11, payor 19, trusted
intermediary financial institution 13, and payee 27. Payors 21, 23,
and payees 29, 31 have similar relationships which are represented
generally by the flow arrows 28, 30, 32, 34, 36, 38, 40, and 42.
The following textual discussion will deal exclusively with the
relationship between payor 19, payee 27, service provider 11, and
trusted intermediary financial institution 13. Where appropriate,
the other relationships with the other payors and/or payees will be
mentioned.
[0069] STEP ONE: In this step, payor 19 and service provider 11
enter into a contractual relationship regarding the payment of
obligations by service provider 11 on behalf of payor 19 to a
plurality of payee entities which is preferably communicated
electronically between payor 19 and service provider 11, and which
provides authorization to service provider 11 to perform the
payment services which will be described below.
[0070] STEP TWO: In this step, payor 19 and trusted intermediary
financial institution 13 enter into a contractual relationship
which allows trusted intermediary financial institution 13 to
withdraw and otherwise handle funds of payor 19 in a manner which
is consistent with the contractual obligations between payor 19,
trusted intermediary financial institution 13, and service provider
11.
[0071] STEP THREE: In this step, payor 19 establishes an account 82
with trusted intermediary financial institution 13 which will be
utilized to pass funds to trusted intermediary financial
institution 13 when pre-authorized requests for payment are
received by trusted intermediary financial institution 13. In
alternative embodiments, the trusted intermediary financial
institution may comprise a trusted entity which directs and
controls the actions of one or more banks for the purpose of
effecting payment. In one particular alternative embodiment, no new
account need be established; instead, electronic funds transfers
from preexisting accounts are utilized to pass funds.
[0072] STEP FOUR: In this step, service provider 11 establishes an
account 84 with trusted intermediary financial institution 13;
preferably, such account would be contractually restricted to
prevent the service provider from making withdrawals. This account
will be managed in a coordinated manner with the account
established by payor 19.
[0073] STEPS FIVE, SIX AND SEVEN: In Step Five, payor 19 reviews
its internal accounting records by performing an automatic data
processing implemented search in order to determine what payment
obligations will be passed to service provider 11 and trusted
intermediary financial institution 13 for satisfaction. FIG. 14
provides one example of a flowchart representation of a data
processing implemented assembly of payment records. In Step Six,
all the payments in the time interval of in question, the data
processing system of payor 19 is then utilized to create a check
summary. An example of the format utilized for a check summary is
depicted in FIG. 9. FIG. 10 is a flowchart representation of a data
processing implemented generation of a check summary. Each payment
obligation will contain payment information which is maintained in
a pre-selected data format. FIGS. 11, 12, and 13 provide format
reports for the payment details which are characterized in those
figures as a "check detail report." In Step Seven, payor 19
utilizes the data processing system to generate an end record
report, which serves a "check sum" function. FIG. 15 is a picture
representation of a format for a record report.
[0074] STEP EIGHT: In this step, payor 19 transmits payment
instructions to service provider 11. In the preferred embodiment of
the present invention, payor 19 and service provider 11 are either
intermittently or continuously connected via distributed data
processing system (or a simple modem or the like) in a manner which
allows for the communication of the large blocks of highly
formatted data. Where electronic communication over telephone
lines, cellular telephone connections, satellite connections, or
microwave connections is not possible, the payment instructions may
be copied to magnetic tape and couriered or mailed from payor 19 to
service provider 11. FIGS. 17, 18, 19, and 20 depict exemplary data
transmissions. Note that the data is arranged utilizing the
preselected formats, thus a large amount of data may be transmitted
in relatively short, but extensively formatted, communications.
FIG. 17 depicts an exemplary data transmission from an oil and gas
company. FIG. 19 depicts an exemplary communication from a
governmental agency. FIG. 20 depicts an exemplary communication
from a publicly traded company. FIG. 18 relates the format of the
data to particular bits in the data communication.
[0075] STEP NINE: In this step, payor 19 communicates payment
information substantially contemporaneously to trusted intermediary
financial institution 13. In accordance with the present invention,
the transmission is preferably communicated over a distributed data
processing system, but may also be communicated utilizing a simple
modem or the like. When telephone, cellular, satellite, or
microwave communication is not possible, a magnetic tape may be
couriered or mailed from payor 19 to trusted intermediary financial
institution 13. Specifically, the information communicated by payor
19 to trusted intermediary financial institution 13 is an approved
pay sheet. FIG. 21 is a picture representation of a report format
for an approved pay sheet which is communicated by payor 19 to
trusted intermediary financial institution 13. FIG. 22 is a
flowchart depiction of data processing implemented steps of
generating and utilizing the approved pay sheet information.
[0076] STEPS TEN AND ELEVEN: In these steps, service provider 11
receives payment instructions from a plurality of payors (such as
payor 19, payor 21, payor 23). Service provider 11 utilizes its
data processing system to sort the records of payment obligations
in order to aggregate all of the payments due to a particular payee
(such as payee 29) even though those obligations originate from
different payors. In other words, service provider 11 may
accumulate the payment obligations of dozens or hundreds of payors,
and sort them in a manner which arranges the payment obligations by
the identity of the payees. There may be thousands of payees. The
payment information can be consolidated in this manner to obtain
significant economies of scale and other business efficiencies
which are not present when individual payors attempt to meet there
individual payment obligations.
[0077] STEP TWELVE: In this step, service provider 11 generates a
positive pay report which is directed to trusted intermediary
financial institution 13, preferably electronically, utilizing
either a distributed data processing system or intermittent
connection like that available with conventional modems. If such
intermittent or continuous electronic communication is not
possible, a magnetic tape may be couriered or mailed from service
provider 11 to trusted intermediary financial institution 13. FIG.
23 is a picture representation of a format report for the positive
pay report. FIG. 24 is a flowchart representation of the data
processing implemented steps of generating and utilizing a positive
pay report.
[0078] STEP THIRTEEN: In this step, service provider 11 generates
and communicates negotiable instruments (such as checks) to the
plurality of payees, including payee 27. Each negotiable instrument
or check includes a printed record of the payment obligations being
satisfied by the single negotiable instrument. FIGS. 27, 28, and 29
provide examples of the types of check reports or "check stubs"
which can be generated in accordance with the present invention,
and which consolidate payment information from a variety of
different payor entities, while simultaneously directing a
negotiable instrument to a single payee, such as payee 27.
[0079] STEP FOURTEEN: In this step, payee 27 tenders the negotiable
instrument received from serviced provider 11 to its bank 47 .
[0080] STEP FIFTEEN: In this step, the bank 47 presents the
negotiable instrument to trusted intermediary financial institution
13 in a conventional manner. This is typically accomplished
utilizing automated clearing houses, which are not shown, to
simplify the description.
[0081] STEPS SIXTEEN AND SEVENTEEN: In these steps, throughout a
business day, trusted intermediary financial institution 13
utilizes its own data processing system to record and accumulate
the presentations of negotiable instruments for payment. In Step
Sixteen, the trusted intermediary financial institution 13 compares
each presentment against the positive pay records provided by
service provider 11. Then, utilizing the virtual check numbers,
trusted intermediary financial institution 13 compares each portion
of a negotiable instrument presented for payment with the approved
pay sheets provided by the payors. Of course, a single negotiable
instrument likely represents payment from a plurality of payors,
and thus requires that the trusted intermediary financial
institution be able to quickly and efficiently compare the virtual
check numbers and amounts with all the approved pay sheets provided
by the payor entities for the time interval in question. Once each
negotiable instrument has been cleared with both the positive pay
sheet and the approved pay sheets, the transaction is recorded in
memory, in accordance with Step Seventeen, for reporting to the
payors.
[0082] STEPS EIGHTEEN, NINETEEN, TWENTY, and TWENTY-ONE: In these
steps, trusted intermediary financial institution 13 utilizes
conventional electronic funds transfers or E.D.I.B.A.N.X. transfers
in order to pull funds from the accounts of the payor entities (in
accordance with Step Eighteen), and deposit funds in the
disbursement account of service provider 11 (in accordance with
Step Nineteen). As an alternative, funds may be transferred
directly from the accounts of the payees, so that funds are never
passed through the account of the service provider, thus maximizing
security. The negotiable instruments are then honored by the
trusted intermediary financial institution. In accordance with Step
Twenty, the disbursement account of service provider 11 is debited
by trusted intermediary financial institution for the appropriate
amount necessary to cover the authorized payment. Then, in
accordance with Step Twenty-One, trusted intermediary financial
institution transfers funds to the payee's bank in a conventional
manner, through a conventional automated clearing house. In
accordance with the present invention, Steps Nineteen and Twenty
occur substantially simultaneously. In this manner, service
provider 11 has only momentary possession of the funds which are
utilized to satisfy the payment obligations represented by many
negotiable instruments which have been presented to trusted
intermediary financial institution 13 throughout the course of a
business day. In essence, the account of service provider 11 is a
mere shell which allows for payment activities to push and pull
funds to and from it in order to satisfy the payment obligations
which have been cleared with both the positive pay sheet and the
approved pay sheets.
[0083] STEP TWENTY-TWO: In this step, the data which has been
recorded by the data processing system of trusted intermediary
financial institution 13 is communicated (preferably
electronically) to payor 19. The payors are then able to confirm
that payments have been made. Additionally, the payors are in a
position to answer questions from the payees concerning the
payments.
[0084] FIGS. 5, 6, and 7 are pictorial representations of exemplary
authorizations which may be obtained from the plurality of payor
entities 15 by service provider 11, which allows service provider
11 to make payments on behalf of the plurality of payor entities 15
to a plurality of payee entities 17. FIG. 5 depicts an exemplary
authorization for the oil and gas industry. FIG. 6 depicts an
exemplary authorization for governmental entities. FIG. 7 depicts
an exemplary authorization for dividend payments. The authorization
pages of FIGS. 5, 6, and 7 may be generated as an electronic
document in a particular data processing system, such as data
processing system 210 of FIG. 3, and then may be communicated
electronically through a distributed data processing system, such
as that depicted in FIG. 2 from service provider 11 to a particular
one of the plurality of payor entities 15 to service provider 11.
The authorization document grants the authorization to make
payments of a particular kind, in accordance with payment
instructions which are provided by the payor entity. In the context
of oil and gas revenue distribution, which is depicted in FIG. 5,
the authorization document 311 includes a title 313, and a
statement of purpose 315. Additionally, a textual authorization 317
is provided which authorizes the service provider 11 to make
payments on behalf of a particular payor (Exxon Company, USA) in
accordance with an approved pay sheet. The authorization document
311 includes a signature block 319, plus bank account information.
If authorization document 311 is communicated electronically via a
distributed data processing system, the signature portion and date
portion of signature block 319 will include an electronic signature
and a computer-generated time-and-date stamp, using conventional
technologies.
[0085] The authorization document 321 of FIG. 6 pertains to the
disbursement of funds from government entities, and may be
particularly useful for the authorization of the disbursement of
funds for entitlement programs. As is shown in FIG. 6, the
authorization document 321 includes a title portion 313, a
statement of purpose 315, a detailed authorization 317, plus bank
account information, and a signature block 319.
[0086] FIG. 7 depicts the utilization of the present invention for
the payment of corporate dividends on investment instruments such
as stocks. Authorization document 23 includes title portion 313, a
brief statement of purpose 315, a detailed authorization 317, plus
bank account information and a signature block 319.
[0087] The approved pay sheet identified in the exemplary documents
of FIGS. 5, 6, and 7 corresponds to the "payment instructions"
which are communicated from a particular one of the plurality of
payor entities 15 to the service provider 11. Preferably, such
payment instructions include at least (1) an identification of each
of the plurality of payee entities 17; (2) an identification of
payment amounts for each of the plurality of payee entities; and
(3) a payment record identifier which is uniquely associated with
each payment amount and which essentially serves as a "virtual
check number". Such payment instructions may be generated in an
automated fashion at each particular payor entity utilizing a data
processing system, such as data processing system 210 which is
depicted in FIG. 3.
[0088] FIG. 8 is a flowchart representation of a computer program
which may be utilized in assembling payment information for oil and
gas revenue distribution, and provides one example of an automated
technique for generating the payment information from a particular
type of payor. In oil and gas revenue distribution, the payor
entity is typically an oil and gas producing or purchasing company.
This company has payment obligations to royalty and working
interest owners in predetermined fractional amounts of the total
revenue. The amounts due vary over time based upon: (1) the amount
of oil and/or gas sold or purchased by the payor, (2) the prices
obtained for the oil and/or gas products which were sold during a
period of interest, and (3) the operating or marketing costs
experienced by the payor. An automated technique for developing the
payment information is depicted in FIG. 8. The process begins at
software block 325, and continues at software block 327, wherein
the product sales database is sorted for sales of oil and/or gas in
a time interval between T.sub.1 and T.sub.2. Then, in accordance
with software block 329, product sales for each property are
totaled. Next, in accordance with software block 331, a data
processing system is utilized to search and sort the record owners
for each property. Typically, these record owners include royalty
interest owners, overriding interest owners, and working interest
owners. Then, in accordance with software block 333, the record
owner's individual accounts are credited in an amount corresponding
to the amount of oil and/or gas sold for the time interval in
question. Then, in accordance with software block 335, the data
processing system is utilized to sort the credits by record owners.
Next, in accordance with software block 337, data processing system
210 is utilized to create a check detail for each record owner.
FIG. 11 is a pictorial representation of an exemplary format for a
check detail, in which the information necessary to identify the
property or properties for which payment is being made is arranged
in an efficient manner which allows for automated handling in
accordance with the present invention. Returning now to FIG. 8, in
accordance with software block 341, data processing system 210 is
utilized to create an end record for the foregoing information.
FIG. 15 is a pictorial representation of the data format for an end
record. The end record summarizes payment information in a manner
which allows the recipient of information to utilize the end record
to perform a "check sum operation" or alternatively a "hash
routine" upon the data transmission. For example, the end record of
FIG. 15 includes an identification of the number of "checks" (that
is, payment obligations) and the distribution total. The recipient
of this electronic payment information can calculate a distribution
total and a number of "checks" in order to verify the accuracy of
the data transmission. Next, in accordance with software block 339,
a check summary is created for each record owner. Preferably, the
check summary includes the identifying information for each oil
and/or gas property from which a payment is due. For example, a
particular individual may be due payments for the sale of oil
and/or gas from multiple properties for which the payor entity has
payment obligation which are operated by the payor entity.
Preferably, all of these amounts due are organized together in an
efficient manner. FIG. 9 is a pictorial representation of a format
report for an exemplary format for a check summary. The check
summary formatted in accordance with FIG. 9 contains the essential
information which allows a payor to communicate payment
instructions to service provider 11.
[0089] Returning now to FIG. 8, data processing system 210 is
utilized to transfer the data in accordance with software block
343, preferably utilizing the distributed data processing system
depicted in FIG. 2. The process ends at software block 345 wherein
service provider 11 has received and confirmed the accuracy of the
payment information received from a particular one of the plurality
of payor entities 15. Of course, service provider 11 will receive
regular communications of payment information from all of the
plurality of payor entities in a prearranged periodic fashion.
[0090] The data which is communicated from the plurality of payors
15 to service provider 11 is in the form of either an alphanumeric
or a numeric block of data. FIG. 17 is a pictorial representation
of a sample data transmission from Exxon Company, USA. The data
communication 801 includes a data block 805. Within this data block
805, particular fields are dedicated for particular types of data,
as will be explained in greater detail with reference to FIG. 17
and FIG. 18. FIG. 19 is a pictorial representation of a data
communication 831 from a governmental entity payor to a service
provider, and includes a data block 837. Likewise, a plurality of
fields are defined within the data block and are dedicated to
particular types of data. FIG. 20 is a pictorial representation of
a data block from Ford Motor Company. Data communication 861
includes a data block 865. Likewise, this data block includes a
plurality of fields which are dedicated for particular types of
data.
[0091] With reference again to FIG. 8, the check summary for each
payment in the payment instructions includes data which is arranged
in accordance with the fields which are set forth in FIG. 9. The
format report 401 of FIG. 9 includes a title section 403, a page
field 405, a date field 407, date of creation fields 409, 411, and
date of last change fields 413, 415. The check summary includes
alphanumeric characters which represent particular information in
accordance with the pre-defined convention.
[0092] The data block of the check summary report is defined by the
table displayed in FIG. 9. Each data field can be defined by its
position, length, and content in accordance with this tabular
display. "Position" column 417 defines the position of the data
fields, and "length" column 419 defines the length of the data
fields. The "data element" column 421 defines the type of data
contained within the field, and the "data type" column 423 defines
whether the field is numeric or alphanumeric. The "notes" column
425 provides miscellaneous information relating to the field. As
can be seen from this tabular display, the first data field is an
"industry code" which is located in the first and second characters
of the data block, and which has a field length of two characters.
As can be seen from the "data type" column 423, these characters
may be alphanumeric. Utilization of an industry code allows the
service provider to service a variety of industries, yet maintain
the data in a manner which can be searched easily by industry
types. The next piece of information is a "record type" which is in
the third and fourth character positions, and which is two
characters long. As can be seen from FIG. 9, the "record type"
typically will include alphanumeric data. The next piece of
information is a "company code" which is kept in the fifth, sixth,
and seventh character positions, and which is three characters in
length. As can be seen from FIG. 9, the "company code" is an
alphanumeric representation of a company.
[0093] The next piece of information is a "serial number" which is
maintained in the eighth through twenty-second character position
in the data block, and which is fifteen characters in length. As
can be seen from FIG. 9, the "serial number" is alphanumeric. The
"serial number" serves the same function as a "virtual check
number". In other words, the serial number identifies a payment
obligation which would have ordinarily resulted in the generation
of a printed check which would have been mailed to a particular
payee. Since the primary objective of the present invention is to
consolidate payment obligations and to tender fewer, and better
organized, payments, the serial number serves now to represent a
payment obligation which will be, or which has been, satisfied, but
which is not likely to be separately identifiable as a negotiable
instrument. In other words, when multiple payment obligations are
grouped together and a single negotiable instrument is generated, a
plurality of serial numbers may be represented by the negotiable
instrument.
[0094] The next piece of information contained in the check summary
is a "payee code" which is located in character positions
twenty-three through thirty-two, and which is ten characters in
length. As can be seen from FIG. 9, the "payee code" is
alphanumeric data. The "payee code" identifies the particular payee
in a pre-defined manner. Preferably, a directory is established
with "company codes" and "payee codes" mapped to a full
identification of either a payor or a payee. The next piece of
information in the data block is a "check amount" which is
maintained in character positions thirty-three through forty-seven,
and which is fifteen characters in length. The "check amount" will
ordinarily be numeric data only. The check amount represents a
payment obligation which would have ordinarily resulted in the
generation of a negotiable instrument. In accordance with the
present invention, this particular check amount may be grouped with
other payment obligations and tendered to a particular payee in a
single negotiable instrument. Like the "serial number" information,
the "check amount" information allows the payor entity to maintain
good and accurate internal records about the payment obligations
and the satisfaction of those payment obligations. Other types of
fields containing other types of information may be included in the
check summary. The exemplary check summary of FIG. 9 provides some
of the most basic and essential components of the payment
information. FIG. 26 is a data dictionary which more carefully
defines the meaning and content of the data elements of the check
summary (and other) reports.
[0095] FIG. 10 is a flow chart depiction of a data processing
implemented generation of a check summary. The process begins at
software block 431 and continues as at software block 433, wherein
a particular check summary format is selected. It is important to
bear in mind that the check summary depicted in FIG. 9 is merely
exemplary, and that other types of check summary reports could be
utilized to convey the essential information necessary for a
payment instruction. Next, in accordance with software block 435,
the date and change records are retrieved to allow proper dating
and version control of the electronic documents created in
accordance with this technique. Then, in accordance with software
block 437, an initial serial number is retrieved. This serial
number represents the "virtual check number" which is associated
with each payment obligation which is communicated from a
particular payor to the service provider. Next, in accordance with
software block 439, the data processing system is utilized to
perform the following operations for each subscriber or payor:
[0096] 1. generate an industry code for the payor;
[0097] 2. generate a record type for the record;
[0098] 3. generate or retrieve the company code which identifies
the payor;
[0099] 4. load or record the serial number to the serial number
field (this corresponds to the virtual check number);
[0100] 5. retrieve the payee code (which is preferably, but not
necessarily, at least a tax identification number) which identifies
the particular payee associated with the particular payment
obligation; and
[0101] 6. record the check amount to the check amount field.
[0102] In accordance with step 441, the serial number (or virtual
check number) is incremented. Next, in accordance with software
block 443, the data processing system determines if there are other
payees that have not yet been processed. If so, the process returns
to software block 439; if not, the process continues as software
block 445, wherein the data is saved to a file. The data that is
saved is a highly condensed record of the information necessary to
make the payments. In this format, the information can be
communicated efficiently, quickly, and at a low cost from the payor
entities to the service provider. Since the information is
maintained in dedicated fields, instruction operations are greatly
facilitated, and the service provider can efficiently organize and
manipulate data in a manner which facilitates its internal
operations. For example, the service provider may be a "virtual
entity" with facilities distributed in a variety of geographic
locations. The data processing and check printing operations can be
performed at a number of locations in a coordinated manner to allow
the service provider to avail itself of low cost operations in
rural or remotely located regions.
[0103] FIGS. 11, 12, and 13 are pictorial representations of a
format report which is suitable for generating a check detail for
oil and gas revenue
distributions,governmentagencydistributions,andstockdividenddistr-
ibutions, respectively. These formats define blocks of data which
can be rapidly and easily transmitted via telephone lines or a
distributed data processing system. Alternatively, the blocks of
data can be recorded to a magnetic or optical memory media and
physically transported.
[0104] Referring first to FIG. 11, the format report 501 includes a
title field 503, page and date fields 505, 507, creation fields
509, 511, and change record fields 513, 515. The format report 501
includes a tabular display of data elements and includes
information about the relative position of the data elements, the
lengths of the data elements, the content of the data elements, the
types of characters present in particular fields, and miscellaneous
notes. This information is organized in column form in format
report 501. The columns include a "position" column 517, a "length"
column 519, a "data element" column 521, a "data type" column 523,
and a "notes" column 525. Position column 517 defines the position
of the data fields, and the length column 519 defines the length of
the data fields. The data element column 521 defines the type of
data contained within the field, and the data type column 523
defines whether the field is numeric or alphanumeric. The notes
column 525 provides miscellaneous information relating to the
field.
[0105] As can be seen from this tabular display, data field 529 is
an "industry code" field which is two characters of alphanumeric
data in the first and second field position which identifies the
particular industry. As identified in the notes column 525, for oil
and gas revenue distributions, this industry code is "OG". Data
element 531 is a "record type" data element which is two characters
long, and which occupies the third and fourth character positions
in the data block. The data is alphanumeric. For oil and gas
revenue distributions, the record type must be identified as "CD".
Data element 533 is a "company code" which is three characters long
and which occupies character positions 5-7. The company code is
preferably alphanumeric. Data element 535 is a "serial number"
which identifies the payment obligation, and which is fifteen
characters in length and which occupies character positions 8-22 in
the data block. Data element 537 is a "payee code" which occupies
the ten characters in positions 23-32. Data element 539 is a
"property code" which occupies the fifteen characters in the data
block in positions 33-47. The data element 541 is a "sales start
date" which occupies the four characters in positions 48-51. Data
element 543 is a "sales end date" which occupies the four
characters in positions 52-55. Data element 545 is a "product code"
which occupies the two characters 56-57. Data element 547 is a
"transaction code" which occupies the two characters in positions
58-59. Data element 549 is a "owner decimal" which occupies the ten
characters in positions 60-69. Data element 551 is an "interest
type" which occupies two characters in positions 70-71. Data
element 553 is a "detail amount" which occupies fifteen characters
in positions 72-86.
[0106] FIG. 12 depicts a format report 557 for a check detail for
utilization in the satisfaction of government agency obligations.
Format report 557 includes title field 559, page and date fields
561, 563, date of creation fields 565, 567, and. change record
fields 569, 571. As is shown, position column 573, length column
575, data element column 577, data type 579, and notes column 581
are provided to display in tabular form a format which may be
utilized to rapidly and easily transmit details necessary for the
satisfaction of governmental agency obligations. As is shown, data
element 585 is dedicated to identify an industry code. For federal
governmental distributions, the alphanumeric designators "US" must
be utilized. Data element 587 is dedicated to identify a record
type. Data element 589 is dedicated for identification of an agency
code. The agency code may be an alphanumeric designation of a
governmental agency. Data element 591 is dedicated to identify a
serial number for the transaction. Data element 593 is dedicated to
identify a payee code. Data element 595 is dedicated to identify a
reference code. Data element 597 is dedicated to identify a payment
start date. Data element 599 is dedicated to identify a payment in
date. Data element 601 is dedicated to identify the transaction.
Data element 603 is dedicated to identify a detail amount.
[0107] FIG. 13 is a pictorial representation of format report 605
for a check detail for utilization in stock dividend distributions.
Format report 605 includes title field 607, page and date fields
609, 611, date of creation fields 613, 615, change record fields
617, 619. Additionally, format report 605 includes position column
621, length column 623, and data element column 625, data type
column 627, and notes column 629. Data element 631 identifies an
industry code. For stock dividend distributions, an alphanumeric
character of "WS" may be utilized to identify "wallstreet"
transactions. Data element 533 identifies a record type. Data
element 535 identifies a company code. Data element 537 identifies
a serial number which corresponds to the payment obligation, which
would have ordinarily resulted in the generation of a printed
check. Data element 639 identifies a payee code. Data element 641
identifies a reference code. Data element 643 identifies start
date. Data element 645 identifies an end date. Data element 647
identifies detail amount. It is important to bear in mind that the
check detail depicted in FIG. 9 is merely exemplary, and that other
types of check summary reports could be utilized to convey the
essential information necessary for a payment instruction.
[0108] FIG. 14 is a flowchart representation of a computer program
utilized to generate data for the check detail in accordance with
the format reports 501, 557, or 605 of FIGS. 11, 12, and 13. The
process commences at software block 651, and continues at software
block 653, wherein the computer program prompts the operator to
select either a regular run or an irregular run. In the context of
the present invention, a regular run constitutes the usual and
customary accounting interval. For example, for governmental agency
distributions, the customary accounting period may be calendar
months, while for stock dividend distributions, the regular
accounting period may constitute financial quarters, which may or
may not coincide with calendar quarters. In accordance with the
present invention, the operator is allowed to initiate payments in
cycles other than the usual customary cycles by selecting the
"irregular run" option in step 653. Next, in accordance with
software block 655, the operator is prompted to select a particular
report format. Then, in accordance with software block 657, the
operator is prompted to define the accounting interval question
from a beginning time point T.sub.B to an ending time point
T.sub.E. Then, in accordance with software block 661, the data
processing system compiles payment records for the selected
accounting interval, and saves those payment records in accordance
with software block 663. The process ends at software block
665.
[0109] FIGS. 17, 18, 19, and 20 depict and describe sample data
transmissions which include the data blocks generated in accordance
with the format reports of FIGS. 11, 12, and 13, as well as the
flowchart representation of the computer software implemented to
generation of the data blocks of FIG. 14. FIG. 17 is a sample data
transmission 801 from Exxon Company, USA for oil and gas revenue
distributions. FIG. 18 provides a detail view of the first ten bits
in the sample data transmission of FIG. 17. As is shown, bits 1 and
2 are dedicated for the industry code. Since this is an oil and gas
distribution, the industry code is "OG". Bits 3 and 4 are dedicated
to identify the record type. In this particular instance, the
record type "CD" indicates that the data transmitted in this line
are check detail data. Bits 5, 6, and 7 are dedicated to identify
the company code. As is shown, the letters "XON" are utilized to
identify "Exxon Company, USA". Bits 8, 9, and 10 are the first
three bits of a serial number which is utilized to identify the
payment transaction to be made on behalf of Exxon Company, USA
through the collaborative efforts of a service provider 11 and a
trusted intermediary financial institution 13.
[0110] FIG. 19 is a sample data transmission 831 from the United
States Department of Health and Human Services. As is shown, sample
data transmission 831 includes a data block 837 which identifies
the payments to be made by the coordinated efforts of service
provider 11 and trusted intermediary financial institution 13 on
behalf of the Department of Human Services. FIG. 20 is a sample
data transmission 861 from Ford Motor Company. A data block 865 is
defined by the format report 605 of FIG. 13 for stock dividend
distributions as well as the software of FIG. 14.
[0111] In accordance with the present invention, each of the data
blocks is concluded by an end record report which can be utilized
in the manner of a "check sum" to verify the accuracy of the
transmission. FIG. 15 is a pictorial representation of a format
report 701 for an end record, which may be utilized in oil and gas
revenue distributions, governmental and entitlements distributions,
or stock dividend distributions. As is shown in FIG. 15, the format
report 701 includes a title field 703, page and date fields 705,
707, a date of creation fields 709, 711, and change record fields
713, 715. As is shown, the data elements which make up an end
record are defined by the tabular display of format report 701. The
table includes position column 717, length column 721, data element
column 723, data type column 725, and notes column 727. Data
element 727 is a two-bit alphanumeric industry code. Data element
731 is a two-bit alphanumeric record type. Data element 731 is a
three-bit alphanumeric company code. Data element 733 is a ten-bit
numeric indicator of the total number of "checks" represented by
the data transmission. In other words, data element 733 identifies
the total number of payment obligations which would be satisfied by
payment in accordance with the instructions contained within the
data block. Data element 735 is a fifteen-bit numeric total of the
distribution total of all the payments identified and authorized by
the transmission. Data element 737 is a six-bit numeric
transmission date. Data element 739 is a six-bit numeric
transmission time.
[0112] FIG. 16 is a flowchart representation of the software
utilized to generate an end record like that defined by the format
report 701 of FIG. 15. The process begins at software block 751,
and continues at software block 753, wherein a particular end
record format is selected by an operator; however, in alternative
embodiments, this may not be explicitly or interactively selected.
Then, in step 755, a compiled data set is selected for end record
generation. Then, in accordance with software block 757, for each
compiled data set, an industry code is generated, a record type is
generated, a company code is retrieved, the number of "virtual
checks" (that is, payment obligations) is recorded, the numeric
total of the payment obligations is calculated and recorded, and
the time and date are recorded from a time-and-date clock resident
in the data processing system. Then, in accordance with software
block 759, the compiled data set is combined with the end record.
Preferably, in accordance with software block 761 a cryptographic
routine is selected, and, in accordance with software block 763, is
performed upon the compiled data set and end record. Then, in
accordance with software block 765, the encrypted record is
recorded, and the software routine ends at software block 767.
[0113] In accordance with the present invention, the plurality of
payor entities 15 (of FIG. 1) provide to the trusted intermediary
financial institution 13 a report which identifies approved
payments. This document or electronic communication may be
characterized as an "approved pay sheet", and includes an
authorization code which authorizes the trusted intermediary
financial institution 13 to honor negotiable instruments or
initiate electronic fund transfers. FIG. 21 is a pictorial
representation of a format report 901 for an approved pay sheet
which is communicated by any particular one of the plurality of
payor entities 15 to the trusted intermediary financial institution
13. As is shown, the format report includes title field 903, page
and date fields 905, 907, date of creation fields 909, 911, and
change record fields 913, 915. The data elements contained in the
approved pay communication are defined with respect to the table
set forth in format report 901, and in particular with reference to
the following columns: position column 917, length column 919, data
element column 921, data type column 923, and notes column 924.
Data element 927 is a two-bit alphanumeric industry code. Data
element 927 is a two-bit alphanumeric record type. Utilization of
the code "AP" identifies this record as an approved pay record.
Data element 929 is a three-bit alphanumeric company code which
identifies the company making the payment. Data element 931 is a
fifteen-bit alphanumeric serial number which identifies the payment
or payments being made on behalf of the company. Data element 933
is a fifteen-bit alphanumeric authorization code which is known
only by the payor entity and the trusted intermediary financial
institution, and which is not known by the service provider. Data
element 935 is a ten-bit alphanumeric payee code which identifies
the payee entity, preferably by tax identification number. Data
element 937 is a fifteen-bit numeric payment amount which
represents the total of the payments made on behalf of the payor
entity to the payee entity.
[0114] FIG. 22 is a flowchart representation of a computer program
which may be utilized to generate an approved pay sheet like that
described by the format report of FIG. 21. The process begins at
software block 951, and continues at software block 953, wherein a
particular subscriber (the sender of the approved pay sheet) and
the trusted intermediary financial institution interface or
interact to select an approved pay format. Next, in accordance with
software block 955, at defined intervals, the subscriber transmits
an approved pay sheet, and for each payment provides:
[0115] (1) identification of the record type;
[0116] (2) identification of the company by utilization of a
company code;
[0117] (3) identification of the payment obligation by utilization
of a virtual check number which is also known as a "serial
number";
[0118] (4) a confidential authorization code which is known only by
the subscriber and the trusted intermediary financial institution,
and which is not known by the service provider;
[0119] (5) a payee code which uniquely identifies the recipient of
the payment or payments; and
[0120] (6) the payment amount.
[0121] Next, in accordance with software block 957, the approved
paysheet is held by the trusted intermediary financial institution
until a "presentment" of a negotiable instrument occurs. The
process ends at step 959. accordance with software block 961, a
payment record is developed and recorded for each transaction.
Then, an electronic funds transfer is initiated with the payment
record appended, for all electronic funds transfers requested
during that banking day.
[0122] In order to minimize the occurrence of fraud through the
alteration of identification of payees or of payment amounts, a
positive pay report may be communicated from service provider 11
(of FIG. 1) to trusted intermediary financial institution 13 (also
FIG. 1). FIG. 23 is a format report 1001 for a positive pay report.
As is shown, the format report 1001 includes title field 1003, page
and date fields 1005, 1007, date of creation fields 1009, 1011,
change record fields 1013, 1015. The information of the positive
pay report is formatted in accordance with the table of format
report 1001. The table includes position column 1017, length column
1019, data element column 1021, data type column 1023, and notes
column 1025. Data element 1029 is an eight-bit alphanumeric check
number, which identifies the negotiable instrument provided by
service provider 11. Data element 1031 is a fifteen-bit numeric
check amount which identifies the total amount of the payment being
made by service provider 11 to a particular one of the plurality of
payees 17. Data element 1033 is a sixty-bit alphanumeric payee
identifier, which identifies the name of the entity receiving the
payment. Data element 1035 is a three-bit alphanumeric company code
which identifies the company making the payment. Data element 1037
is a fifteen-bit alphanumeric serial number which elements found in
FIG. 23A, so the same reference numerals are utilized. The check
detail record 1008 includes data element 1029 which is a two-bit
alphanumeric report code, and data element 1031 which is a two-bit
alphanumeric record type code. Furthermore, the format report 1008
includes data element 1039 which is an eight-bit numeric check
number, data element 1041 which is a three-bit alphanumeric company
code, data element 1043 which is a fifteen-bit alphanumeric serial
number, and data element 1045 which is a fifteen-bit numeric check
sub amount. This data represents the individual payment obligations
which are added together to represent the check amount of the
report of FIG. 23A. Of course, a variety of payment obligations may
be represented in a single check, so the data elements are
repeating to identify all further payment obligations which have
associated company codes, serial numbers (virtual check numbers),
and check sub amounts.
[0123] FIG. 23C is similar to FIGS. 23A and 23B and provides a
format report 1018 for positive pay end records. Since many of the
data elements are similar to those found in FIGS. 23A and 23B,
similar reference numerals are utilized. The format report for the
positive pay end record includes data element 1029 which is a
two-bit alphanumeric report code, data element 1031 which is a
two-bit alphanumeric record type, data element 1047 which is a
ten-bit numeric number of checks indicator, data element 1049 which
is a fifteen-bit numeric distribution total, data element 1051
which is a six-bit numeric transmission date, and data element 1053
which is a six-bit numeric transmission time. As with the other
format reports, additional end records may be communicated at the
same time and are likewise identified by the number of checks,
distribution total, transmission date, and transmission time.
[0124] Together, the reports of FIGS. 23A, 23B, and 23C maximize
security in the payment system of the present invention.
[0125] FIG. 24 is a flowchart representation of the utilization of
the positive pay report, in accordance with one preferred
embodiment of the present invention. The process begins at software
block 971, and continues at software block 973, wherein the service
provider 11 and trusted intermediary financial institution 13
interact to select a positive pay report format, such as the format
report 1001 of FIG. 23. Next, in accordance with software block
975, at defined intervals, the service provider 11 (of FIG. 1)
transmits a positive pay report to the trusted intermediary
financial institution 13 (of FIG. 1), including:
[0126] (1) a check number of a negotiable instrument;
[0127] (2) a check amount for the negotiable instrument;
[0128] (3) an identification of the payee;
[0129] (4) an identification of the payor; and
[0130] (5) for each negotiable instrument, payment obligation(s)
with serial number(s), and check sub amount(s), for each payment
obligation being satisfied.
[0131] The process ends at block 977. In this manner, a plurality
of payment obligations may be grouped together and represented by a
single negotiable instrument which is presented for payment, and
which satisfies a plurality of payment obligations. Service
provider 11 (of FIG. 1) provides the positive pay report to the
trusted intermediary financial institution 13 (of FIG. 1) since
service provider 11 is charged with the responsibility of combining
and coordinating the payment obligations in a manner which
efficiently satisfies the payment obligations. As requests for
payment are made, for each presentment, the trusted intermediary
financial institution verifies payment by comparing the serial
number, amount, and payee of the negotiable instrument with the
serial number, amount, and payee of approved payments on the
positive pay report.
[0132] Once a negotiable instrument is verified, it is honored, and
a payment record is developed and recorded. FIG. 25 is a pictorial
representation of an example of a positive pay transmission for an
oil and gas revenue distribution system. The lines which includes
"CD" correspond to check detail and serve to identify check
numbers, payors, virtual check numbers, and check sub-amounts (in
that order from left to right, with vertical lines utilized to
separate items). The line that includes "CS" corresponds to a check
summary and serves to identify check numbers and check amounts. The
line that includes "ER" corresponds to an end record and serves to
identify the number of checks, the number of virtual checks, and
the total of check amounts.
[0133] The negotiable instruments and electronic funds transfers
made by service provider 11 in coordinated operation with trusted
intermediary financial institution 13 may include a significant
amount of detailed and useful information which is either printed
on a check stub or communicated electronically to the data
processing system under the control of the payee entity. FIGS. 27,
28, and 29 are pictorial representations of the types of
information which may be included on the check stubs. Turning first
to FIG. 27, check stub 1101 includes a introductory header 1103
which identifies the enclosed (or referenced) check or checks as
being made on behalf of the companies listed below for the
particular properties and product sales dates. Preferably, the
payor entities' trademarks are utilized to provide maximum
orientation within the document. In FIG. 27, the document
identifies payments as being made on behalf of two payor entities:
GPM Gas Corporation and Philbro Energy USA, Inc. Exxon Company USA
The trademarks 1105, 1137 are utilized to identify those two payor
entities. Several payments are made by service provider 11 on
behalf of GPM Gas Corporation. The detail information for each
payment is set forth in tabular form. In FIG. 27 rows (1), (2), and
(3) define the three for which payment is being made. The column
items include item number field 1109, operator/lease name field
1111, county/state field 1113, lease ID/your decimal field 1115,
sales date/interest type field 1117, product/unit price field 1119,
lease volume/your volume field 1121, lease value/your value field
1123, lease tax/your tax field 1125, lease net/your net field 1126.
The check stub further includes total fields 1129, 1131, 1133, 1135
which provide an indication of the total of several of the columns.
The check stub further includes a question/complaint field 1107
which directs questions to the particular payor entity, and at
least provides an address for such entity.
[0134] In the example of FIG. 27, the payment made on behalf of
Philbro Energy USA, Inc. Exxon Company USA includes the Philbro
Exxon trademark 1137. The payment information is arranged in table
form with the item fields 1157 defining the two properties for
which payment is made. The properties and payments are identified
with reference to the columns including item field 1141,
operator/lease name field 1143, county/state field 1145, lease
ID/your decimal field 1147, sale date/interest type field 1149,
products/unit price field 1151, lease volume/your volume field
1153, lease value/your value field 1154, lease tax/your tax field
1155, lease net/your net field 1156. The check stub further
includes total fields 1160, 1159, 1161, 1163 which provide
appropriate totals. Additionally, the payment information includes
complaint/question statement 1139 which directs inquiries to
Philbro Energy USA, Inc. Exxon Company USA and provides at least an
address for such questions. As is shown also in FIG. 27, the
virtual check numbers associated with each payment may also be
provided.
[0135] FIG. 28 is a pictorial representation of check stub 1201 for
payments made on behalf of governmental entities. The header field
1203 identifies the enclosed checks as representing payment from
the governmental agencies listed below. The agency logos 1205,
1219, are utilized to provide maximum orientation within the
document. A header 1207 identifies the first payment as being made
on behalf of the United States Department of Health and Human
Services. The payment information is set forth in tabular form by
the account field 1209, payment period field 1211, description
field 1213, and amount field 1215. Typically, the account is
defined by a social security number or similar unique identifier.
The payment period is typically a statutory or regulated interval.
The description defines the purpose of the payment, and the amount
provides the total amount of the payment. In the example of FIG.
28, the second payment includes a header 1221 which identifies the
payment as being made on behalf of the United States Treasury, and
arranges the payment information under the account field 1223,
payment period field 1225, description field 1227, and amount field
1229. Multiple types of obligations may be satisfied by this
instrument, as demonstrated by the rows 1231 which are utilized to
distinguish a refund of overpayment and the interest on the refund
as separate amounts for the totals. The totals are identified by
total fields 1233, 1235.
[0136] FIG. 29 is a pictorial representation of a check stub
associated with the payment of stock dividends. The check stub 1301
includes a header 1303 which identifies the enclosed check as
satisfying the dividend obligations in connection with the
particular stock in companies identified below. The logo fields
1305, 1319 utilize company logos or names to identify the
particular payments. The payment fields 1307, 1321 provide a
textual description of the payment or payments. The payment
obligations are set forth in column form under the account field
1309, shares owned field 1311, dividend/share field 1313, and
amount field 1315, for Ford Motor Company. Likewise, the dividend
obligation for Texas Instruments shares is set forth under account
field 1323, shares owned field 1325, dividend/share field 1327, and
amount field 1329.
[0137] FIG. 30 is a flowchart representation of a data processing
implemented verification operation, wherein a negotiable instrument
is received and a determination is made whether or not to honor the
request for payment. The process begins at software block 1411, and
continues to software block 1413, wherein a negotiable instrument
is received by the trusted intermediary financial institution 13,
and the determination must be made whether or not to honor the
negotiable instrument. To begin with, the positive pay information
is retrieved for the negotiable instrument. The positive pay
information was provided by service provider 11, and includes at
least an identification of the check number and the amount of the
payment. In accordance with software block 1415, the positive pay
information is examined and compared to the information contained
on the face of the negotiable instrument to determine whether or
not to honor the instrument. If the positive pay information is
inconsistent with the information carried by the negotiable
instrument, the process continues at software block 1417, wherein
the negotiable instrument is dishonored, and the process continues
at software block 1419 by ending. However, if the operation of
software block 1415 determines that the positive pay information is
indeed satisfied by the negotiable instrument, the process
continues at software block 1421, wherein the payment record
identifiers associated with the particular negotiable instruments
are retrieved. As stated above, a particular negotiable instrument
is likely to represent payment for a number of payment obligations.
Each payment obligation has associated with it a payment record
identifier which identifies the payment, and which serves as a
"virtual check number". Each payment record identifier carries with
it at least the amount of the payment. The positive pay report
provided by service provider 11 will include identification of all
the payment record identifiers associated with the negotiable
instrument. Each one of these payment record identifiers is
retrieved from memory, and a comparison is made of the total of the
amounts represented by the payment record identifiers. In other
words, the total amount of the payment must also match. In
accordance with the present invention, the payment record
identifiers may be from a plurality of payor entities. Therefore,
the data processing system of the present invention must quickly
and efficiently retrieve the payment record identifiers from a
plurality of payment information and payment authorization
communications from the payors. If the totals also match, the
process continues. The comparison of the total of accumulated
amounts for the payment record identifiers is represented in
flowchart form at software block 1423. If the information is
consistent, the process continues at software block 1425. If the
information is inconsistent, the process continues at software
block 1417, wherein the negotiable instrument is dishonored. In
software block 1425, the data processing system is utilized to
determine whether electronic funds transfers have been authorized.
In accordance with the present invention, each payment record
identifier has associated with it an authorization code. Electronic
fund transfers can occur only if the authorization code is present.
The authorization code allows for the secure communication between
the trusted intermediary financial institution 13 and the plurality
of payor entities, should some question arise about payment. A
payment authorization is necessary for payment to be made. If in
step 1425, it is determined that there is no authorization, the
process continues at software block 1417, wherein the negotiable
instrument is dishonored; however, if it is determined in software
block 1425 that authorization is present, the process continues at
software block 1427, wherein the data processing system is utilized
to record and accumulate the transactions for a defined interval.
In accordance with the present invention, authorized electronics
funds transfers are accumulated for a business day. At the end of
the business day, a single electronics fund transfer occurs, thus
minimizing the costs associated with transferring funds
electronically. This process is depicted graphically in the
flowchart of FIG. 30 in software block 1429, wherein the data
processing system determines whether or not the transaction period
has ended; if the transaction period has not ended, the process
continues at software block 1427; however, if the transaction
period has ended, the process continues at software block 1431,
wherein the data processing system is utilized to perform a
conventional electronic funds transfer between each particular
payor and the service provider 11. A single electronic fund
transfer may represent several authorized transfers for a
particular payor. The process ends at software block 1433, wherein
the bank account for service provider 11 is funded in an amount
sufficient to satisfy the negotiable instruments presented during
the business day. In accordance with the present invention, the
bank account for the service provider is immediately debited for
the amount of the negotiable instruments, and payment is tendered
through the banking chain in a conventional manner. In accordance
with the present invention, the service provider 11 has only
momentary possession of the funds, so the possibility of fraudulent
or illegal activities is minimized. As an additional benefit, the
payors maintained possession and control of their funds until the
negotiable instruments must be honored. In this manor, the payors
may utilize the capital represented by these amounts in an
efficient manner.
[0138] FIG. 31 is a flowchart representation of a data processing
implemented confirmation report provided by trusted intermediary
financial institution 13 to each of the plurality of payor
entities. The process begins at software block 1511, and continues
at software block 1513, wherein the transaction records with the
interval in question are retrieved. In accordance with the present
invention, satisfaction of the payment obligations is preferably
reported in a predetermined periodic manner. For example, the
confirmation report may be submitted daily, weekly, or monthly from
the trusted intermediary financial institution 13 to each of the
plurality of payor entities. The process continues at software
block 1515, wherein trusted intermediary financial institution 13
utilizes its data processing system to sort the payment records by
payment record identifier. As identified above, the payment record
identifier represents the payors "virtual check number" for each
payment obligation. In accordance with software block 1517, the
trusted intermediary financial institution utilizes a data
processing system to relate the payment record identifiers to (1)
the negotiable instrument number; (2) the negotiable instrument
payment date; (3) the electronic funds transfer transaction
identifier, which identifies the particular electronic funds
transaction which satisfy the particular obligation; (4) the
negotiable instruments number; (5) the amount for each payment
record identifier; and, optionally, (6) payee identification. These
items are preferably formatted in an agreed upon manner
communicated to each of the plurality of payor entities in
accordance with software block 1519. The process ends at software
block 1521, wherein the plurality of payor entities receive the
electronic communication which confirms satisfaction of payment
obligations. The plurality of payor entities may update its
internal records utilizing the payment record identifiers in order
to indicate that the payment obligations have been satisfied. This
allows the plurality of payor entities to maintain accurate books,
even though the negotiable instruments were not generated by the
plurality of payor entities.
[0139] In an alternative embodiment of the present invention,
payment information may be consolidated and delivered by one or
more information service providers, while the payment obligations
are directly satisfied by the plurality of payor entities. The
service provider may be utilized to consolidate and deliver payment
information from a plurality of payor entities to a plurality of
payee entities, even though the service provider does not perform
payment activities on behalf of the plurality of payee entities.
This provides a significant advantage over the prior art, insofar
as it allows the plurality of payor entities to satisfy financial
obligations, without personally satisfying the associated reporting
obligation. This minimizes the administrative and other costs
associated with making of payments, and thus allowing the payor
entities to efficiently "outsource" the reporting obligations,
while maintaining tight control over the satisfaction of the
payment obligations.
[0140] These objectives may be obtained by the improved method of
delivering payment information according to the present invention.
The invention is directed to an improved method of delivering
payment information from a plurality of payor entities. At least
one data processing system is utilized to sort and format payment
information of the plurality of payor entities concerning the
plurality of payment obligations. Payment information is
communicated to the information service provider. At least one data
processing system is utilized, which is under the control of the
information service provider, to consolidate the payment
information concerning the plurality of payment obligations from a
plurality of payor entities in accordance with at least one
predetermined consolidation criterion. Preferably, the
predetermined consolidation criterion comprises grouping the
payment information by payee identity, in order to obtain
efficiencies in reporting information from a plurality of payors.
Then, the payments are directed to the plurality of payees in order
to satisfy the plurality of payment obligations. The information
service provider operates independently of others to direct
consolidated payment information to the plurality of payees,
without requiring active interaction between the information
service provide and the plurality of payees. Preferably, the
consolidated payment information is communicated either
electronically or in printed format from the information service
provider to the plurality of payees. The plurality of payees are
not required to interact, electronically, or otherwise, with the
information service provider in order to obtain this information,
but, otherwise, payees may elect to receive payment information
electronically. In alternative embodiments, the plurality of payor
entities may utilize one service provider to direct negotiable
instruments to the plurality of payees, while using another service
provider to direct consolidated financial information (such as
payment information) to the plurality of payees, with each of the
service providers operating independently of one another.
[0141] One particular embodiment of the consolidated payment
information reporting of the present invention is depicted in block
diagram, flowchart, and pictorial form in FIGS. 32, 33, and 34.
[0142] FIG. 32 is a pictorial representation of a plurality of
steps which are performed by a plurality of payor entities 19 and
21, service provider 11, a plurality of payee entities 29 and 31,
and trusted intermediary 13. For purposes of simplicity, the
interaction of only one payor entity 19 and one payee entity 29 is
described. The present invention contemplates that a plurality of
payor entities utilize the service provider in order to consolidate
and deliver payment information to a plurality of payee entities.
Preferably, the payment information is consolidated in accordance
with the identity of the payee entities. As is shown in FIG. 32,
only payor 19 and payee 29 will be discussed in detail; however,
the relationship between the other payors (such as payors 21) and
other payees (such as payee 31) is visually represented by arrows
28, 34, 42, 38. What follows is a step-by-step description of
preferred operation.
[0143] STEP ONE: In this step, payor 19 and service provider 11
enter into a contractual relationship regarding the delivery of
payment information to a plurality of payor entities on behalf of
payor 19. Preferably, this contractual relationship is communicated
electronically between payor 19 and service provider 11, and
provides authorization to service provider 11 to perform the
information delivery services which will be described below.
[0144] STEPS TWO and THREE: In these steps, payor 19 utilizes a
data processing system to first sort, and then format, payment
obligation and information. Preferably, the payment information is
formatted in a manner which facilitates the electronic
communication of the information to service provider 11.
[0145] STEP FOUR: In this step, payor 19 communicates the payment
information to service provider 11. The payment information may be
communicated to service provider 11 via a distributed data
processing system, through intermittent connection between payor 19
and service provider 11 utilizing a modem or the like, or by
delivering a magnetic or optical media from payor 19 to service
provider 11.
[0146] STEPS FIVE and SIX: In these steps, payor 19 directs payment
to payee 29 and the other payees. Payor 19 may communicate a
negotiable instrument to payee 29; this is identified in FIG. 32 as
step "5A". Alternatively, payor 19 may utilize an electronic funds
transfer to direct funds from the payor's bank 13 to the bank of
payee 29; this obligation is depicted in FIG. 32 as steps "5B" and
"6". The electronic funds transfer is supported by an electronic
funds transfer agreement which is visually represented in FIG. 32
as step "5C". The view of FIG. 32 is simplified, and does not
depict the use of automated or other clearing houses to simplify
the exposition.
[0147] STEPS SEVEN, EIGHT, and NINE: In these steps, service
provider 11 utilizes one or more data processing systems under its
control to sort and consolidate the payment information by the
identity of the payees. In the view of FIG. 32, step "7"
corresponds to the sorting activity, and step "8" corresponds to
the consolidation activity. Step "9" corresponds to the generation
of printed or electronic communication which includes consolidated
payment information.
[0148] STEP TEN: In step "10", the payment information which has
been consolidated in the foregoing steps is communicated to the
plurality of payees. There are two alternative techniques for
communicating the consolidated payment information to the plurality
of payees. One technique is to print a report and direct it to the
payees via conventional delivery services such as the United States
Postal Service. The alternative technique is to communicate the
consolidated payment information to the plurality of payees
utilizing an electronic format. In the view of FIG. 32, step "10A"
represents the conventional delivery of printed material. In
contrast, steps "10B" and "10C" represent the deliver of the
consolidated payment information in electronic format is a two step
process. In step "10B", the information is delivered to an
electronic mail address for payee 29. Once the electronic mail has
been opened and/or read by payee 29, a confirmation of receipt is
directed back to service provider 11. This confirmation of receipt
is represented in FIG. 32 as step "10C". Since not all e-mail
servers provide delivery receipts, alternatively service provider
may e-mail payee to notify of new data being available, and payee
logs on to service provider database and retrieves password
protected payee data.
[0149] STEPS ELEVEN, TWELVE, THIRTEEN, and FOURTEEN: In these
steps, payee 29 presents the negotiable instrument, in accordance
with step "11", to its bank. The bank in turn presents the
negotiable instrument through a clearinghouse to payor bank 13, in
accordance with step "12". The bank 13 honors the instrument, in
accordance with step "13", and the payees bank credits the payees
account, in accordance with step "14".
[0150] STEP FIFTEEN: In accordance with step fifteen, payor bank 13
confirms payment of the negotiable instruments to payor 19.
[0151] FIG. 33 is a flowchart representation of the steps utilized
in performing the information providing service. The process
commences at software block 1611, and continues at software block
1613, wherein a contractual arrangement for outsourcing of the
delivery of payment information is reached. This flowchart step
corresponds to step number one in FIG. 32. Then, the process
commences at software block 1615, wherein each payor sorts and
formats the payment information utilizing its own data processing
system. This corresponds to steps two and three of FIG. 32. The
formatted payment information is then communicated to service
provider 11, in accordance with software block 1617. This
corresponds to step four in FIG. 32. Then, in accordance with
software block 1619, payor 19 delivers the payment without
including the detailed payment information. This corresponds to
steps 5A, 5B, and 5C in FIG. 32. Then, in accordance with software
block 1621, service provider 11 sorts, consolidates, and prints the
payment information. This corresponds to steps seven, eight, and
nine of FIG. 32. Then, service provider 11 communicates the payment
information, in accordance with software block 1623. This
corresponds to steps 10A, 10B, and 10C. In accordance with software
block 1627, service provider 11 may optionally report delivery of
the payment information. The process ends at software block
1629.
[0152] FIG. 34 is a pictorial representation of printed information
which may be provided by service provider 11 to the particular one
of the plurality of payees. The payment information includes the
names of the payors, the amounts of the payments, and detailed
information regarding the payment. The printed material identifies
the source of the payment in as-detailed a manner as is desired by
the plurality of payors. The report is similar to the payment
information of FIG. 27, so the same reference numerals are
utilized.
[0153] A variety of alternative arrangements can be utilized to
deliver the payment information utilizing a service provider. As
stated above, the plurality of payors may direct negotiable
instruments to the plurality of payees. Alternatively, the
plurality of payors may utilize electronic funds transfer
operations in order to transfer funds from their accounts to the
payees accounts. Alternatively, the plurality of payor entities may
utilize a different service provider to direct negotiable
instruments to the plurality of payee entities on behalf of the
plurality of payor entities. In this way, the plurality of payors
may divide the services between an information service provider and
a payment service provider. The payment service provider may be
optionally utilized to consolidate payment obligations into a
single negotiable instrument, for each payee. Alternatively, the
payment service provider may initiate electronic funds transfers
which effect the transfer of funds between accounts under the
direct or indirect control of the plurality of payors and the
accounts under the direct or indirect control of the plurality of
payees. Optionally, the payment service provider may bundle the
electronic fund transfers together in order to minimize the total
number of electronic funds transfers needed in order to effect
payment for a plurality of payors. The service provider may utilize
one or more data processing systems under its control to sort the
payment information by at least one of (1) the payee identity, and
(2) a preselected time interval for the reporting. The reporting
interval may be defined by statute or by commercial practices in a
particular industry. For oil and gas transactions, that payment
interval may be as long as one year (when allowed by statute) or as
short as one month. Utilizing the information reporting system for
reporting payment information relating to government programs and
entitlements may allow longer or shorter intervals. The information
service provider may communicate the payment information either
electronically to the plurality of payees, or may communicate
printed consolidated payment information to the plurality of
payees.
[0154] While the invention has been shown in only one of its forms,
it is not thus limited but is susceptible to various changes and
modifications without departing from the spirit thereof.
* * * * *