U.S. patent application number 10/942378 was filed with the patent office on 2005-02-10 for serialized system for image replacement documents.
This patent application is currently assigned to NCR Corporation. Invention is credited to Kallin, Fredrik L.N..
Application Number | 20050033696 10/942378 |
Document ID | / |
Family ID | 32593741 |
Filed Date | 2005-02-10 |
United States Patent
Application |
20050033696 |
Kind Code |
A1 |
Kallin, Fredrik L.N. |
February 10, 2005 |
Serialized system for image replacement documents
Abstract
An improved process for clearing bank checks. Paper bank checks
are digitized, and the paper checks are placed into storage. The
digitized versions are used in the check-clearing process. When
paper versions of the checks are required, as when a check is
needed for evidence in a lawsuit, a paper version is printed from
the corresponding digitized version, each paper version bearing a
unique serial number, wherein no two serial numbers are alike. At
that time, selected data from the printed check is stored in a
database. A recipient of the printed check is allowed access to the
database, to verify authenticity of the printed check.
Inventors: |
Kallin, Fredrik L.N.;
(Waterloo, CA) |
Correspondence
Address: |
MICHAEL CHAN
NCR CORPORATION
1700 SOUTH PATTERSON BLVD
DAYTON
OH
45479-0001
US
|
Assignee: |
NCR Corporation
|
Family ID: |
32593741 |
Appl. No.: |
10/942378 |
Filed: |
September 16, 2004 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
|
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10942378 |
Sep 16, 2004 |
|
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10325341 |
Dec 19, 2002 |
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Current U.S.
Class: |
705/45 |
Current CPC
Class: |
G06Q 40/02 20130101;
G06Q 20/023 20130101; G06Q 20/042 20130101; G06Q 20/02 20130101;
G06Q 20/389 20130101 |
Class at
Publication: |
705/045 |
International
Class: |
G06F 017/60 |
Claims
1-16. (canceled)
17. A method of processing a paper bank check in which the paper
check is digitized and the digitized check is transferred for
clearing, the method comprising: transferring a printed IRD version
of the digitized check if returned for insufficient funds, the IRD
version being verifiable by access to a database; and providing
access to the database to allow the IRD version to be verified.
18. A method according to claim 17, wherein the IRD version bears a
serial number by which other information on the check may be
retrieved from the database.
19. A method of processing a paper bank check in which the paper
check is digitized and the digitized check is transferred for
clearing, the method comprising: receiving a printed IRD version of
the digitized check if returned for insufficient funds, the IRD
version being verifiable by access to a database; and receiving
access to the database to allow the IRD version to be verified.
20. A method according to claim 19, wherein the IRD version bears a
serial number by which other information on the check may be
retrieved from the database.
21. A method of processing a paper bank check, the method
comprising: having the check digitized; having the digitized check
presented to its drawee bank for clearing; having a printed IRD
version of the digitized check if returned for insufficient funds,
the IRD version being verifiable by access to a database; and
having access to the database for the recipient of the IRD version
to allow the IRD version to be verified.
22. A method according to claim 21, wherein the IRD version bears a
serial number by which other information on the check may be
retrieved from the database.
23. A method of processing a paper bank check in which the paper
check is digitized and the digitized check is transferred for
clearing, the method comprising: transferring a printed IRD version
of the digitized check with a statement from a drawee bank, the IRD
version being verifiable by access to a database; and providing
access to the database to allow the IRD version to be verified.
24. A method according to claim 23, wherein the IRD version bears a
serial number by which other information on the check may be
retrieved from the database.
25. A method of processing a paper bank check in which the paper
check is digitized and the digitized check is transferred for
clearing, the method comprising: receiving a printed IRD version of
the digitized check with a statement from a drawee bank, the IRD
version being verifiable by access to a database; and receiving
access to the database to allow the IRD version to be verified.
26. A method according to claim 25, wherein the IRD version bears a
serial number by which other information on the check may be
retrieved from the database.
27. A method of processing a paper bank check, the method
comprising: having the check digitized; having the digitized check
presented to its drawee bank for clearing; having a printed IRD
version of the digitized check with a statement from the bank, the
IRD version being verifiable by access to a database; and having
access to the database for the recipient of the IRD version to
allow the IRD version to be verified.
28. A method according to claim 27, wherein the IRD version bears a
serial number by which other information on the check may be
retrieved from the database.
Description
BACKGROUND OF THE INVENTION
[0001] The invention concerns a clearing system for bank checks,
wherein electronic versions of the checks, rather than the checks
themselves, are transferred among banks. When paper versions are
required, they are printed on-demand from the electronic versions.
The paper versions are called Image Replacement Documents, IRDs.
The invention provides an approach for preventing fraud or mistake
in connection with the IRDs, as could occur if a given IRD were
printed multiple times. Multiple printings are not desired, because
the IRDs are negotiable instruments.
BACKGROUND OF THE INVENTION
[0002] Paper bank checks are in widespread use. FIG. 1 illustrates
a typical bank check 3. After the payee 6 receives the check 3, the
payee 6 will take steps by which the check 3 enters a
check-clearing system, which in the United States is operated by
the Federal Reserve System.
[0003] A special case would occur if the check 3 is presented to
the bank 9 on which the check is drawn. In that case, the
drawee-bank 9 would simply (1) deduct the amount 12 of the check 3
from the account of the drawer 18, the account number being
contained in the MICR line 15, (2) pay the payee 6, (3) retain the
check 3 rather than entering it into the clearing system, and (4)
perhaps later deliver the check 3 to the drawer 18 in a monthly
statement.
[0004] But, in the general case, the check 3 will enter the
check-clearing system. The check-clearing system performs several
functions. One is that it sorts all the checks according to
drawee-bank, and delivers the checks to the respective
drawee-banks.
[0005] A second is that it handles money transfers, so that all
banks involved are properly charged and credited. For example, if
the payee 6 of the check 3 in FIG. 1 deposits the check 3 in the
payee's own bank, that bank will give a provisional credit to the
payee's account. That bank is called the bank-of-first-deposit,
BOFD.
[0006] The BOFD then enters the check 3 into the check-clearing
system, wherein (1) the physical check is transferred to the
drawee-bank 9, (2) a charge is levied against the drawee-bank 9 in
the amount 12 of the check, and (3) a credit is issued to the BOFD
in that amount.
[0007] The check-clearing system performs additional functions,
which will not be described in detail, but briefly mentioned. It
handles issues arising when the drawee bank 9 rejects the check 3,
as can occur if the account 15 lacks funds to pay the check 3, or
if the account 15 has been closed.
[0008] It also assures the credit-worthiness of the banks involved,
thereby minimizing the possibility that a bank will become
insolvent during the check-clearing process, and thereby default on
a charge which has been levied against it.
[0009] It also sets up procedural rules, such as specifying the
time limit within which a drawee-bank must reject a check drawn on
an account lacking funds. If the limit expires, the drawee-bank is
deemed to have accepted the check.
[0010] Therefore, the check-clearing system can be viewed as
performing three primary types of function. One is that it sorts
and distributes the paper checks to the drawee-banks. A second is
that it transfers money among the banks to settle accounts. The
third type of function can be viewed as a collection of
administrative procedures which enable the clearing system to
accomplish the first and second functions in a practical manner.
The particular methods in which the functions outlined above are
presently implemented have evolved for historical reasons,
primarily because the checks used always have been paper-based.
With the development of modern electronics and high-speed digital
computers, it may be possible to eliminate some of the steps
required in a paper-based check clearing system, to thereby
streamline the check-clearing process.
OBJECTS OF THE INVENTION
[0011] An object of the invention is to provide an improved
check-clearing system.
SUMMARY OF THE INVENTION
[0012] In one form of the invention, paper bank checks are
digitized into digital images during, or prior to, the
check-clearing process, and the paper checks are placed into
storage. The check-clearing is then accomplished using the digital
images.
[0013] Sometimes, paper versions of the checks are required. Paper
versions are then printed based on the digital images. To prevent
fraud and mistake, each paper version is assigned a unique serial
number. That serial number, together with information contained on
the check, is stored in a central database. The database is made
available to holders of the paper versions, to verify
authenticity.
BRIEF DESCRIPTION OF THE DRAWINGS
[0014] FIG. 1 illustrates some components of a bank check 3.
[0015] FIGS. 2-13 form flow charts, in pictorial format, which
illustrate processes undertaken by several forms of the
invention.
DETAILED DESCRIPTION OF THE INVENTION
[0016] FIGS. 2-10 collectively illustrate a flow chart, in
pictorial forms, which describe processes undertaken in Electronic
Check Presentment, ECP. In FIG. 2, a check CK is deposited into a
Bank of First Deposit, BOFD. For example, the payee "ELECTRIC
COMPANY" in FIG. 1 may deposit check 3 into an account which it
maintains in the BOFD of FIG. 2.
[0017] As indicated in FIG. 3, the BOFD generates a digitized image
DIG CK of the check, and places the actual paper check CK into
storage. Conceptually, the digitized image is a bitmap, possibly
compressed. In general, any process by which the visual information
on the check, front and back, can be (1) captured, (2) stored in a
computer, and (3) transferred over communication links will
suffice.
[0018] In addition, the BOFD may extract certain data from the
check CK, such as the amount 12 in FIG. 1, the MICR data 15, etc.,
and store that data in a text file (not shown). The BOFD may keep
the text file in association with, or linked to, the digitized
check DIG CK. That is, the text file effectively will accompany the
digitized check wherever the latter is transferred.
[0019] It is emphasized that the identity of the party who creates
the digitized check DIG CK is not necessarily significant, but the
important event is that the digital image DIG CK accurately
represent the paper check.
[0020] In FIG. 4, the BOFD transfers the digital image DIG CK to a
check clearing system, which in the United States is handled by the
Federal Reserve System, and is designated FED. The check clearing
system receives millions of digital checks daily from numerous
banks, and these are represented by the collection of digital
checks DIG CKS in FIG. 5.
[0021] The clearing system distributes the digital checks DIG CKS
to the banks on which they are drawn, as indicated in FIG. 6. Those
banks use the digital checks, or the text file discussed above, or
both, to balance the accounts on which the checks were drawn. In
addition, the banks may use the digital checks DIG CKS to print
paper images of the checks, which may be included in the monthly
statements mailed to the banks' customers.
[0022] However, not all the banks will necessarily be able to
handle digital checks, particularly in the initial phases of
implementation of an Electronic Check Presentment system. Some will
require paper checks, as have been used traditionally. Thus, assume
that BANK.sub.--3 in FIG. 7 lacks this digital capability, and will
need standard paper-based checks.
[0023] Accordingly, the clearing system FED delivers the digital
images 30, representing the checks drawn on BANK.sub.--3, to a
printing facility 33. The printing facility 33 generates paper
representations 36 of the checks, called IRDs, Image Replacement
Documents.
[0024] The Inventor points out that now two paper versions of the
checks for BANK.sub.--3 exist. One version lies in the original
paper checks, check CK in FIG. 3 representing one such paper check.
In the example of BANK.sub.--3, four IRDs 36 are shown in FIG. 7,
so four corresponding original paper checks will exist somewhere in
a storage facility. The second paper versions in existence are, of
course, represented by the newly printed IRDs 36 in FIG. 7.
[0025] The IRDs 36, that is, the paper versions of the checks, are
delivered to BANK.sub.--3, as in FIG. 8. The existing paper-based
routing system can accomplish this delivery.
[0026] Therefore, as so far described, the drawee-banks have all
received either (1) digitized images of the checks drawn on them or
(2) paper representations of the digitized images.
[0027] It was stated that a text file may be generated for each
check, containing selected, or all, information in the check. Thus,
three possible combinations arise in items delivered to the
banks:
[0028] digitized checks, plus text file,
[0029] IRDs, plus text file,
[0030] IRDs, no text file.
[0031] The text file can simplify accounting at the drawee bank, by
eliminating manual data entry.
[0032] It may happen that paper versions of the checks may need to
be generated for other reasons. For example, assume in FIG. 9 that
BANK.sub.--1 receives a digitized check drawn on an account lacking
finds to pay the check. BANK.sub.--1 would thus return the
digitized check 50 to the printing facility 33, or another agency,
as indicated by arrow 52. The printing facility 33, or agency,
would generate an IRD 55, and print "INSUFFICIENT FUNDS" on it.
[0033] The clearing system FED would deliver this IRD 55 to the
BOFD initially receiving the corresponding paper check. That BOFD
is assumed to be BANK.sub.--3 in FIG. 10.
[0034] The BOFD would return that check to the depositor, thereby
giving the depositor a paper check bearing a legend "INSUFFICIENT
FUNDS," or equivalent. Such a document would be useful to the
depositor in legal proceedings against the drawer of the check.
[0035] To repeat: BANK.sub.--3 initially received a bad paper
check. That paper check was digitized, and placed into storage. The
digitized version was submitted to the drawee-bank, rejected, and
the system created an IRD 55, marked "INSUFFICIENT FUNDS," to
replace the paper check. That IRD 55 was returned to BANK.sub.--3.
The original paper check remained in storage.
[0036] Other situations may arise when the printing described in
connection with FIGS. 9 and 10 would occur. For example, a drawer
may need a copy of a cancelled check because of a dispute over
payment.
[0037] It is clear that, in the processes described above, a
problem can arise because numerous identical IRDs could be
generated from a single digital check, either through mistake or
fraud. For example, when a check is returned due to insufficient
funds in the checking account, an IRD is generated which is marked
"INSUFFICIENT FUNDS." That IRD is eventually returned to the payee
of the check. However, that IRD is still a valid negotiable
instrument. For instance, under the Uniform Commercial Code, that
IRD acts as a written promise, by the maker of the check, to pay
the face amount of the check, to any valid holder. Further, if the
holder is a "holder in due course," certain defenses to payment are
not available to the maker of the check against the holder.
Clearly, the maker of the check does not want multiple, apparently
valid, copies of that instrument to exist.
[0038] One form of the invention reduces, or eliminates, this
problem. FIG. 11 illustrates procedures and apparatus which are
added to a system of the general type just described. When the
digital checks 30 are printed, they are printed onto paper stock 58
having pre-printed serial numbers S/N. Thus, the IRDs 60 are
serialized.
[0039] In one form of the invention, the IRDs are printed onto
ordinary paper, to thereby allow common printing equipment, such as
computer laser printers, to be used. The paper may be fanfold type,
as in FIG. 11, ordinary sheet paper, as used in laser printers, or
another similar type.
[0040] The paper stock 58 may lack serial numbers, and the serial
numbers would be generated by hardware and software which controls
the printing process. Thus, as each IRD is being created, a serial
number is assigned to it. Alternately, the IRD can be created on
check stock bearing pre-printed serial numbers. In many countries,
organizations which set technical standards have established
commercial standards for check stock, that is, the paper on which
bank checks are printed.
[0041] In either case (pre-printed serial numbers, or serial
numbers printed in real-time), no two IRDs are printed having the
same serial number. If the number of IRDs printed becomes so large
that the serial numbers become excessively long, then the serial
numbers can be re-initialized at a starting point. However, the
need for re-initialization is seen as unlikely, as will now be
explained.
[0042] Many credit cards in the U.S. have account numbers which are
16 decimal digits in length. A serial number of that length can
represent numbers ranging from zero to 9,999,999,999,999,999, or
essentially 10 quadrillion individual numbers. If 100 million
checks were printed every day under the invention, then a different
serial number could be printed on every check for 100 million days,
without reaching 10 quadrillion. That is, 100-million-squared (or
10**8-squared) equals 10 quadrillion (or 10**16).
[0043] As a rough estimate, 1,000 days are about equal to 3 years.
Then 100 million days correspond roughly to 300,000 years.
Therefore, a serial number containing 16 decimal digits is seen as
adequate.
[0044] However, a larger limit on serial numbers can be
accommodated by (1) increasing the number of digits, as by using
hexadecimal numbers or alphanumeric digits instead of decimal
digits, or (2) using a longer serial number, or both (1) and
(2).
[0045] In any event, no two IRDs are printed having identical
serial numbers.
[0046] Alternately, if a shorter serial number is used so that the
serial numbers eventually run out, the run-out time is chosen so
that no two IRDs exist in a common practical time frame. For
example, if the run-out time is chosen as ten years, no two IRDs
having identical serial numbers will exist in ten years. As a
practical matter, two IRDs having the same serial number, but dated
over ten years apart, as could occur in this system, are not seen
as a basis for fraud or mistake which will cause injury.
[0047] Ten years was just discussed. However, in general, run-out
times of any multiple of six months are contemplated, such as 6,
12, 18, 24, 30, 36 months, and so on.
[0048] Therefore, as just described, every IRD printed contains a
different, or unique, serial number. Alternately, serial numbers
may be exhausted, and restarted. If that is done, then the serial
numbers contain enough digits so that, when re-start occurs, the
possible dates of checks having identical serial numbers are so
widely spaced that fraud is considered impossible.
[0049] In addition to serial printing of the IRDs, the invention
maintains a master table 75 as in FIG. 11. That table 75 contains
data relating to each check printed as an IRD (as opposed to all
checks cleared). The data can be any combination of the
following:
[0050] Initial check serial number,
[0051] Serial number assigned in printing step of FIG. 11,
[0052] Payee name,
[0053] Drawer name,
[0054] Account number,
[0055] Drawee bank name,
[0056] Drawee bank routing number,
[0057] Date of initial issuance, and
[0058] Date of printing IRD.
[0059] Table 75 can be maintained in the form of a relational
database, which would simplify field-searching. For example, an
authorized party could search all amount-fields, and find all IRDs
drawn in a specific amount, such as $ 33.33.
[0060] Table 75 is made available to any parties having
need-to-know of its contents, and that need is controlled by
inter-bank agreements. Those parties include (1) the banks to which
the paper IRDs are delivered and (2) parties who hold the paper
IRDs.
[0061] Access to table 75 allows any party holding an IRD to verify
whether that IRD is genuine. For example, the party would search
table 75 using the serial number S/N in FIG. 11, printed on the
check. The table 75 would then specify the relevant data contained
on the check. Deviations would then indicate the check to be
invalid, or suspect.
[0062] If the source of the IRD is considered trustworthy, the
validation of the serial number and data printed on the check using
table 75 provides conclusive evidence that the IRD is valid. For
example, assume a purchaser of an automobile writes a check which
is returned for insufficient funds in the account. The NSF check,
in IRD form, returned to the automobile dealer will be returned by
the dealer's bank. The bank is considered trustworthy. The IRD is
presumed valid, based on table 75 and the trustworthy status of the
bank.
[0063] In another embodiment, subsets of the data contained in
table 75 can be delivered to drawee banks. For example, as shown in
FIG. 12, when the printing facility 33 prints IRDs, as for banks
which are not equipped to handle digitized checks, the printing
facility 33 also collects the entries corresponding to those checks
from table 75. In this example, two groups 100 and 105 of printed
checks are shown. Entries are collected into TABLE 1 for the
former, and TABLE 2 for the latter.
[0064] The clearing system FED then delivers the paper IRDs 100 and
105 to the drawee-banks, as indicated in FIG. 13, together with the
TABLES 1 and 2. Preferably, the TABLES are delivered prior to the
IRDs.
[0065] Under this approach, BANK.sub.--1 and BANK.sub.--2 can then
compare each IRD with the corresponding TABLE, to see whether the
each IRD corresponds to a check listed in the TABLE. If a
discrepancy is found, then a check is seen as suspect.
[0066] These tables can also be delivered whenever IRDs are
printed.
[0067] The Inventor points out that the data in the tables is
generated at the time the IRDs are printed, and thus represent a
historical record of some, or all, of the information printed on
each respective IRD.
[0068] The Inventor points out that one function performed by the
TABLES shown in FIGS. 10-12 is to answer the following type of
question: "Is this IRD genuine?" Or, more specifically, "Does the
data on the IRD in my possession correspond to that in the TABLE
for the same serial number?".
[0069] An invention has been described wherein paper checks are
digitized in a check-clearing system. The paper checks are placed
into storage, and the digitized checks are returned to the
drawee-banks instead of paper checks, or "cleared." When paper
checks are needed, they are printed from the digitized checks, each
with a unique serial number. These print-outs are called IRDs. They
can be printed on check stock, and the stock may be pre-numbered
with the serial numbers.
[0070] In addition, a table may be generated, which contains the
serial number of each IRD, as well as all, or some, of the data
printed on the IRD. A holder of the IRD may consult the table, to
verify that the serial number, and all other data on the check,
correspond to that in the table.
[0071] Of course, eventually the table will become quite large,
containing billions of entries, or more. Thus, over time, old
entries in the table may be shunted into a second table. Any party
wishing to search for a check will first search the smaller table
for "new" checks. If the check is not found, then the second table
is searched. This can save search time.
[0072] In one form of the invention, each bank involved is assigned
a group of unique serial numbers. For example, bank A can be
assigned numbers A1 through A1,000. Bank B may be assigned numbers
B1 through B1,000. In the general case, the serial number can
contain two parts: (1) a serial number and (2) a bank identifier.
The serial numbers for different banks can overlap, and thus be
similar, but the bank identifier would distinguish the two numbers.
The numbers A55 and B55 provide two examples. The numbers (55) are
the same, but the bank identifiers (A and B) are different.
[0073] Numerous substitutions and modifications can be undertaken
without departing from the true spirit and scope of the invention.
What is desired to be secured by Letters Patent is the invention as
defined in the following claims.
* * * * *