U.S. patent application number 11/465033 was filed with the patent office on 2006-12-07 for system and method for facilitating electronic transfer of funds.
This patent application is currently assigned to AMERICAN EXPRESS BANK LTD.. Invention is credited to Eddy Almonte, Steven Aponte, Gennaro Bruni, Luiz C. Couto, Gabriela Crespo, Nageswararao Dasari, Nina Eckstein, Joseph Fernandez, Bill Gilbert, Gordon Joost, George Kreiner, Subramaniam Krishnan, Ramaswamy Madhavan, Arthur McGrath, Colleen Wolfe.
Application Number | 20060277143 11/465033 |
Document ID | / |
Family ID | 29739467 |
Filed Date | 2006-12-07 |
United States Patent
Application |
20060277143 |
Kind Code |
A1 |
Almonte; Eddy ; et
al. |
December 7, 2006 |
SYSTEM AND METHOD FOR FACILITATING ELECTRONIC TRANSFER OF FUNDS
Abstract
A system for facilitating electronic transfer of funds includes
a transfer administrator in communication with a transferor
institution, one or more intermediary institution, and a transferee
institution, the transferor institution having an account at the
one or more intermediary institution. The transfer administrator
may be configured to receive an incoming payment request
designating said transferor institution, a quantity of funds to be
transferred, and the transferee institution. The transfer
administrator generates and issues a translated payment order based
at least in part on the incoming payment request and configured to
accomplish a transfer among the transferor institution, the one or
more intermediary institution, and the transferee institution.
Finally, the transfer administrator may facilitate processing of a
balancing payment among the transferor institution, the one or more
intermediary institution, and the transferee institution.
Inventors: |
Almonte; Eddy; (Brooklyn,
NY) ; Aponte; Steven; (Staten Island, NY) ;
Bruni; Gennaro; (East Hampton, NY) ; Couto; Luiz
C.; (Miami, FL) ; Crespo; Gabriela; (North
Bergen, NJ) ; Dasari; Nageswararao; (Sewaren, NJ)
; Eckstein; Nina; (Tinton Falls, NJ) ; Fernandez;
Joseph; (River Vale, NJ) ; Gilbert; Bill; (L.
Niguel, CA) ; Joost; Gordon; (Shelter Island, NY)
; Kreiner; George; (Chestnut Ridge, NY) ;
Krishnan; Subramaniam; (Westfield, NJ) ; Madhavan;
Ramaswamy; (Rego Park, NY) ; McGrath; Arthur;
(Brooklyn, NY) ; Wolfe; Colleen; (Summit,
NJ) |
Correspondence
Address: |
SNELL & WILMER
400 EAST VAN BUREN
ONE ARIZONA CENTER
PHOENIX
AZ
85004-2202
US
|
Assignee: |
AMERICAN EXPRESS BANK LTD.
200 Vesey Street 3 World Financial Center
New York
NY
|
Family ID: |
29739467 |
Appl. No.: |
11/465033 |
Filed: |
August 16, 2006 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
|
|
10358801 |
Feb 5, 2003 |
7110980 |
|
|
11465033 |
Aug 16, 2006 |
|
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|
60390523 |
Jun 21, 2002 |
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Current U.S.
Class: |
705/39 |
Current CPC
Class: |
G06Q 20/10 20130101;
G06Q 20/02 20130101; G06Q 40/00 20130101; G06Q 20/102 20130101;
G06Q 20/04 20130101 |
Class at
Publication: |
705/039 |
International
Class: |
G06Q 40/00 20060101
G06Q040/00 |
Claims
1. A data processing system for facilitating electronic transfer of
funds, said data processing system comprising: a processor for
processing digital data; a memory coupled to said processor for
storing digital data; means, coupled to said memory, for inputting
digital data; and a transfer administrator configured as an
application program, said application program stored in said memory
and accessible by said processor for directing processing of
digital data by said processor; said transfer administrator
configured to perform the steps of: receiving an incoming payment
request designating a transferor institution, a quantity of funds
to be transferred, and a transferee institution, wherein said
payment request includes a first transfer protocol; generating a
translated payment order by translating said first transfer
protocol to a second transfer protocol, wherein said translated
payment order is based at least in part on said incoming payment
request, and wherein said translated payment order includes said
second transfer protocol; and facilitating communication of said
translated payment order to said transferee institution, whereby
funds are electronically transferred from said transferor
institution to said transferee institution.
2. The system of claim 1, wherein said incoming payment request is
an exempt payment request.
3. The system of claim 1, wherein said incoming payment request is
configured in accordance with a Fedwire funds transfer
protocol.
4. The system of claim 1, wherein said translated payment order is
a participating payment order.
5. The system of claim 1, wherein said translated payment order is
configured in accordance with a SWIFT messaging system.
6. The system of claim 1, wherein said incoming payment request is
received directly from said transferor institution.
7. The system of claim 1, wherein said incoming payment request is
received from an intermediary institution.
8. The system of claim 1, wherein said transferor institution is in
a first nation and wherein said transferee institution is in a
second nation distinct from said first nation.
9. The system of claim 1, wherein said transfer administrator is
further configured to perform said step of acquiring relationship
information.
10. The system of claim 9, wherein said relationship information
comprises an algorithm for determining fees to be assessed in
connection with said electronically transferred funds.
11. The system of claim 1, wherein said transfer administrator is
further configured to perform said step of initiating payment among
an affiliated institution and an intermediary institution in
accordance with said incoming payment request and an electronic
funds transfer protocol.
12. The system of claim 11, wherein said transfer administrator is
further configured to perform said step of facilitating processing
of a balancing payment among an account of said transferor
institution and an account of said intermediary institution.
13. The system of claim 11, wherein said transfer administrator is
further configured to perform said step of debiting an outgoing
payment queue of said intermediary institution and crediting an
account of said transferee institution.
14. The system of claim 12, wherein said transfer administrator is
further configured to perform said step of facilitating processing
by debiting said account of said intermediary institution and
crediting said account of said transferor institution, said account
of said transferor institution configured to accommodate electronic
transfer of funds in accordance with a participating electronic
funds transfer protocol.
15. The system of claim 11, wherein said transfer administrator is
further configured to perform said step of debiting a participating
demand account of said transferor institution, crediting an
outgoing payment queue of an intermediary institution, and
crediting a demand account of said transferor institution in
accordance with said relationship information, said demand account
configured to accommodate electronic transfer of funds in
accordance with a participating electronic funds transfer
protocol.
16. A system for facilitating electronic transfer of funds, said
system comprising: a transfer administrator in communication with a
transferor institution, an intermediary institution, and a
transferee institution; said transferor institution having an
account at said intermediary institution; said transfer
administrator configured to perform the steps of: receiving an
incoming payment request designating said transferor institution, a
quantity of funds to be transferred, and said transferee
institution, wherein said incoming payment request includes a first
transfer protocol; generating a translated payment order by
translating said first transfer protocol to a second transfer
protocol, wherein said translated payment order is based at least
in part on said incoming payment request, and wherein said
translated payment order includes said second transfer protocol;
and facilitating communication of said translated payment order to
said transferee institution, whereby funds are electronically
transferred from said transferor institution to said transferee
institution.
17. A method for facilitating electronic transfer of funds
comprising: receiving an incoming payment request designating a
transferor institution, a quantity of funds to be transferred, and
a transferee institution, wherein said payment request includes a
first transfer protocol; generating a translated payment order by
translating said first transfer protocol to a second transfer
protocol, wherein said translated payment order is based at least
in part on said incoming payment request, and wherein said
translated payment order includes said second transfer protocol;
and facilitating communication of said translated payment order to
said transferee institution, whereby funds are electronically
transferred from said transferor institution to said transferee
institution.
18. The method of claim 17, wherein at least one of said steps of
receiving said incoming payment request includes receiving said
incoming payment request configured in accordance with a Fedwire
funds transfer protocol and said generating said translated payment
order includes generating said translated payment order configured
in accordance with a SWIFT messaging system.
19. The method of claim 17, further comprising converting a
currency of said payment request.
20. The method of claim 17, further comprising providing a rebate
to at least one of said transferor institution and said transferee
institution.
21. The method of claim 17, wherein said step of generating said
translated payment order comprises generating said translated
payment order at an intermediary institution to facilitate payment
to said transferee institution.
22. The method of claim 17, wherein said step of generating said
translated payment order comprises generating said translated
payment order at an intermediary institution to facilitate payment
to said transferee institution using at least one of a Fedwire,
SWIFT and CHIPS transfer protocol.
Description
CROSS REFERENCE TO RELATED APPLICATION
[0001] This application is a continuation of, and claims priority
to, U.S. Ser. No. 10/358,801 filed on Feb. 5, 2003 entitled SYSTEM
AND METHOD FOR FACILITATING ELECTRONIC TRANSFER OF FUNDS, which
itself claims the benefit of U.S. Provisional Patent Application
Ser. No. 60/390,523, filed Jun. 21, 2002, all of which are hereby
incorporated by reference.
FIELD OF INVENTION
[0002] The present invention relates generally to systems for
facilitating electronic transfer of funds, and more specifically to
systems for facilitating electronic transfer of funds among
remotely located parties that lack both an account relationship
with a common institution and an infrastructure suitable to enable
use of a common electronic funds transfer protocol.
BACKGROUND OF INVENTION
[0003] In today's world, electronic funds transfers have become
increasingly common. Where a single financial institution has an
account relationship with both a transferor, i.e., provider, and a
transferee, i.e., recipient, of transferred funds, completing an
electronic transfer of funds is a relatively simple task. This is
because the single financial institution involved has sufficient
authority to accomplish all the steps necessary to complete the
transfer, e.g., both the authority to debit an account of the
transferor and the authority to credit an account of the
transferee.
[0004] Yet, in many situations, no single financial institution
exists that has these necessary account relationships with both the
transferor and the transferee. The more common case is that the
transferor's financial institution is distinct from the
transferee's financial institution, creating a need for the
establishment of a relationship between these institutions. For
example, a transferor may have an account relationship with a first
institution while a transferee has an account relationship with a
second institution. The first institution, however, may not have
any established relationship with the second institution.
[0005] To address this need, it has become common for financial
institutions to employ one or more intermediary, i.e.,
correspondent, institutions. In such cases, the intermediary
institution provides a mechanism through which a transferor's
institution and a transferee's institution may reliably ensure the
debiting of an account of the transferor, the crediting of an
account of the transferee, and appropriate balancing transactions
between the institutions, i.e., the completion of the electronic
funds transfer. Thus the intermediary institution effectively
bridges the gap between the institutions that have the
relationships with the transferor and the transferee.
[0006] Within the United States, most independent financial
institutions maintain an account relationship with one of the
Federal Reserve Banks, and are thus referred to as Federal Reserve
member institutions. Through the Federal Reserve Bank system,
Federal Reserve Banks are able to serve as intermediary
institutions, thus providing the bridging function among Federal
Reserve member institutions. Accordingly, where a transferor has an
account relationship with a first institution that also has an
account relationship with one of the Federal Reserve Banks, the
first institution may cooperate with the Federal Reserve Bank to
accomplish a transfer of funds to any other institution that also
has a relationship with any of the Federal Reserve Banks. Thus, the
transferor may electronically transfer funds to any transferee so
long as that transferee also has an account relationship with a
Federal Reserve member institution.
[0007] To facilitate automated processing of such transactions, the
Federal Reserve Banks have established a communication protocol
known as the Fedwire Funds Transfer Protocol. This protocol is
described in the Fedwire Funds Transfer Reference Card, published
by Federal Reserve Financial Services effective Jul. 15, 2002 and
is hereby incorporated by reference for background purposes. In
addition, most member institutions have developed infrastructures
within their institutions to automate and simplify the processing
of Fedwire transactions. For example, member institutions may
integrate their internal accounting systems with the Fedwire
messaging, wiring, and settlement instructions to eliminate manual
ledger entering, e.g., debiting and crediting, and translating of
messages.
[0008] Unfortunately, not all institutions are able to, or choose
to, use one of the Federal Reserve Banks as an intermediary. For
example, financial institutions located entirely outside the United
States rarely enjoy status as members of the Federal Reserve
system. Similarly, a small but significant minority of institutions
within the United States maintain no account affiliation with any
of the Federal Reserve Banks. As a result, such institutions may
not possess an established infrastructure or may not otherwise be
equipped to efficiently use the Fedwire Funds Transfer
Protocol.
[0009] Another drawback of the Federal Reserve system is that it
does not facilitate provision of meaningful customer service when
transferring funds from a member institution to a non-member
institution. Fedwire does not provide any mechanism for tracking
and reporting on the status of transactions once they have cleared
the Fedwire system. For example, where a transferor institution
desires to transfer funds through Fedwire to another U.S.
institution, e.g., so that the second U.S. institution may be able
to accommodate a further transfer to a foreign institution, the use
of Fedwire will effectively insulate the transferor institution
from the foreign institution. Put another way, when a transferor
institution relies on Fedwire, no standardized or automated
mechanism exists for the transferor institution to acquire
information regarding the status of the terminal portion of the
transfer (the portion of the transfer from the second U.S.
institution to the foreign institution). In such cases, transferors
who may have no relationship with the ultimate transferee
institution may not have access to any convenient mechanism for
investigating where or why a transfer failed. This difficulty can
be significant where the transferee institution is located in a
foreign country.
[0010] In many cases, financial institutions that cooperate to
accomplish electronic funds transfers charge fees for their
services. In some cases, it may be desirable that such fees be
waived, refunded, or credited, either wholly or partially, or that
other rewards be offered based on a cooperating institution's
compliance with a prescribed set of criteria, such as transaction
volume, transaction frequency, membership, affiliation, use of a
desired protocol, and the like. As financial institutions increase
the extent to which they engage in electronic funds transfers, it
becomes increasingly important to distinguish those electronic
funds transfers that may participate in such incentive offerings
from those that are exempt from participating in such incentive
offerings. As used herein, the phrase "participating transfer
order" refers to an electronic funds transfer order that enables
one or more of the associated institutions to substantially
participate in incentive offerings due to compliance with
prescribed criteria such as those mentioned above. Where use of a
specific protocol or messaging system enables an institution to
substantially participate in incentive offerings, that system or
protocol is described as a "participating electronic funds transfer
protocol." Accordingly, as used herein, the phrase "participating
transfer" refers to an electronic funds transfer that substantially
qualifies for incentives due to its compliance with prescribed
criteria such as those mentioned above.
[0011] Contrariwise, where use of a specific protocol or messaging
system causes the sending institution to be substantially excluded
from incentive offerings, that system or protocol is described as
an "exempt electronic funds transfer protocol." Accordingly, as
also used herein, the phrase "exempt payment request" refers to an
electronic funds transfer request that causes the transferor, i.e.,
sending, institution to be substantially excluded from incentive
offerings due to its use of an exempt electronic funds transfer
protocol. Similarly, as used herein, the phrase "exempt transfer"
refers to an electronic funds transfer that substantially precludes
incentives due to its use of an exempt electronic funds transfer
protocol.
[0012] It should be noted that individual countries, or groups of
countries, may have an established infrastructure, and/or a
standardized mechanism, for accomplishing electronic funds
transfers among financial institutions. For example, in the United
States, financial institutions predominantly rely upon the Fedwire
Funds Transfer Protocol discussed above to accomplish money
transfers among financial institutions where both the transferor
institution and the transferee institution are Federal Reserve
member institutions. Use of the Fedwire Funds Transfer Protocol
generally precludes participation in incentive offerings (i.e.,
Fedwire is an exempt electronic funds transfer protocol). Use of
the Fedwire Funds Transfer Protocol does, however, provide for
settlement of the transaction. Consequently, when the Fedwire
system is used, messaging and settlement occur simultaneously with
the sending of the Fedwire message, and no intermediary
institution, other than the Federal Reserve Banks, is involved.
[0013] As shown in FIG. 1, transfers accomplished using the Fedwire
payment system 100 typically involve a transferor institution 110
and a transferee institution 130. Transfers accomplished using the
Fedwire payment system 100 may also involve one or more of the
Federal Reserve Banks acting as an intermediary institution 140.
Typically, a transferor 101 communicates a request with
corresponding value 105 to a transferor institution 110. It should
be noted that the value may be delivered by the transferor 101 to
the transferor institution 110 as cash, commercial paper, or
sufficient information to identify an account from which sufficient
funds may be drawn. In addition to delivering funds, or identifying
the source of funds, to be transferred, the transfer request 105
typically identifies a transferee institution 130, a quantity of
funds to be transferred, a transferee 190, and may also identify a
specific transferee's account 190 at the transferee institution
130.
[0014] In response to the transfer request 105, the transferor
institution 110 may retrieve information from a database 111, such
as a banker's almanac or other similar database, to identify and
select an intermediary institution 140 that has an account
relationship with the transferee institution 130. Using this
information, the transferor institution 110 may initiate the
transfer through the appropriate intermediary institution 140 using
whatever protocol the intermediary institution 140 requires, e.g.,
the Fedwire protocol, by communicating one or more payment order
115 to the intermediary institution 140.
[0015] Based on the payment order 115, the intermediary institution
140 provides value 135 to the transferee institution 130, and the
transferee institution 130 provides a corresponding amount of value
145 to the transferee 190. It should be noted that value may be
provided by delivering cash, issuing commercial paper, crediting an
account of a recipient, or other means known in the art.
[0016] As discussed herein, there are a variety of transfer systems
and associated communication protocols currently in use throughout
the world, e.g., Fedwire, SWIFT, CHIPS, ACH. In general, these
transfer systems and/or protocols allow financial institutions to
transfer funds on their own behalf or on behalf of their customers.
Such transfers may result from, for example, trades of federal
funds and other interbank transactions, purchases, sales of
securities, or time-sensitive payments. Although the Fedwire system
accommodates transfers by telephone and other conventional forms of
communication, most transactions are accomplished through on-line
communications using computer systems. For more information on the
Federal Reserve system, see The Federal Reserve System--Purposes
and Function, Eighth Edition, December 1994 (Library of Congress
39-26719), which is hereby incorporated by reference for background
purposes.
[0017] While domestic electronic funds transfer systems and
protocols such as Fedwire are used extensively to accomplish
electronic funds transfers within their associated networks of
affiliated institutions, e.g., members of the Federal Reserve
system, they do not adequately accommodate transfers of money among
financial institutions where the transferor financial institution
and the transferee financial institution are not affiliated with
such a network of institutions, particularly in the case of
international funds transfers. In addition, many domestic
electronic funds transfer systems do not typically provide any
rewards, rebates, refunds, credits or other types of incentives for
their use. Thus, financial institutions using domestic transfer
systems such as Fedwire are typically limited to conducting only
domestic, exempt electronic funds transfers.
[0018] As used herein, the term "domestic electronic funds
transfer" refers to an electronic funds transfer where both the
transferor and the transferee and/or their respective financial
accounts and/or financial institutions are situated within a single
nation (e.g., the United States). Similarly, as used herein, the
terms "domestic electronic funds transfer protocol" and "domestic
electronic funds transfer system" refer to systems and protocols
for accomplishing domestic electronic funds transfers (e.g.,
Fedwire and its counterparts operated within the United
States).
[0019] To facilitate transfers of money among financial
institutions where it is impossible or undesirable to accomplish
transactions using only a single domestic and/or exempt system such
as Fedwire (e.g., where the transferor institution and the
transferee institution are located in different nations and/or
where the transferee institution otherwise discourages or precludes
use of Fedwire or any other domestic or exempt protocol), various
international and/or participating electronic funds transfer
systems have been developed. For example, the Society of Worldwide
International Financial Telecommunications has developed a secure
communication system utilized among institutions, known as the
SWIFT messaging system (protocol). Many foreign financial
institutions utilize the SWIFT protocol because it facilitates, and
is widely accepted for conducting, international transfers. In
addition, many institutions also desire to use the SWIFT protocol
to gain access to incentives not available in conjunction with
Fedwire (i.e., SWIFT is a participating electronic funds transfer
protocol).
[0020] It should be noted, however, that unlike Fedwire, many funds
transfer systems and/or protocols may not necessarily provide for
settlement, i.e. may not include payment to balance the funds
transfer. For example, SWIFT is a purely messaging protocol and
does not currently provide settlement capability. Accordingly, when
a transferor institution sends a SWIFT message to an intermediary
institution or directly to a transferee institution, the transferor
must also provide a means for balancing the transfer, i.e., must
provide some form of value to the transferee institution. As used
herein, electronic funds transfer protocols that provide for
settlement are referred to as "settling protocols," and electronic
funds transfer protocols that do not provide for settlement are
referred to as "non-settling protocols."
[0021] As briefly mentioned above, in addition to facilitating
international transfers, use of the SWIFT protocol may enable
financial institutions to access various incentives. For example,
in accordance with a rebate process known as a benededuct,
intermediary institutions using the SWIFT protocol may rebate a
portion of the fees charged to the other institutions if, for
example, a pre-determined transaction volume through the
intermediary institution is reached. While it should be noted that
a wide variety of incentive mechanisms are possible, an exemplary
scheme shifts part or all of the liability for the fees associated
with a particular transfer from the transferor institution to the
transferee institution. In accordance with this scheme, fees
charged by the transferor institution may be collected by the
intermediary institution via automatic deduction from the proceeds
to be paid to the transferee. Other schemes may enable the
transferor and/or transferee institutions to share in the fees
collected by the intermediary institution. Thus, financial
institutions using such incentive providing transfer systems are
participating institutions, and the transfers they conduct are
participating transfers. It should be noted once again, however,
that the Fedwire system does not accommodate such sharing of fees
among the participating institutions, and is, thus, an exempt funds
transfer system.
[0022] Typically, financial institutions adopt a single electronic
finds transfer protocol and develop their infrastructures to
support use of that protocol, e.g., Fedwire. Despite the advantages
offered by the SWIFT system and other participating systems, the
vast majority of financial institutions in the United States have
adopted and established infrastructures based on the Fedwire
protocol and have elected to not automate their use of the SWIFT
communications system or any other incentive-offering system. Thus,
these institutions typically may automatically transmit only exempt
electronic funds transfer orders. Moreover, often as a result of
insufficiently trained staff or under-developed infrastructures,
many of those institutions that could otherwise manually issue
participating transfers, nevertheless, fail to comply with
formalities, e.g., they fail to properly prepare SWIFT-formatted
payment orders, causing those transfers to also be
non-participating, i.e., exempt, transfers.
[0023] To effect an international transaction in the most
advantageous manner, it is typically necessary or desirable to use
an intermediary institution that is both situated in the country of
the transferor institution and equipped with an international
network. Most major international institutions, and domestic
intermediary institutions with full international networks and
capabilities, however, have payments/communications software and
hardware that are based on, and therefore require use of, a
participating protocol, e.g., the SWIFT protocol. Thus, these
institutions are not equipped to accommodate common exempt or
domestic transfer protocols such as Fedwire. For this reason, it is
currently difficult and inefficient for financial institutions in
the United States who may have adopted and established
infrastructures based on an exempt domestic protocol such as
Fedwire to use a participating (e.g., SWIFT-based) intermediary
institution to accomplish international transfers. As a result,
with respect to international payments or transactions with an
international connection (i.e., the transferee is outside the
country of the transferor), exempt institutions typically cannot
adequately access the processing capabilities, favorable
cost/pricing, reconciliation services, inquiry services, and/or
other advantages typically enjoyed by other intermediary
institutions, placing exempt institutions at a disadvantage
relative to participating institutions.
[0024] Accordingly, it would be advantageous to have a system and
method for facilitating electronic funds transfers that would
permit a transferor's institution to use its preferred electronic
funds transfer system and/or protocol while also accommodating use
of an appropriate funds transfer protocol and/or system according
to the preferences of an intermediary institution or a transferee's
institution. It would further be advantageous to have a system and
method that would enable financial institutions transmitting exempt
funds transfers to continue to use their current exempt funds
transfer infrastructures, e.g., Fedwire, while nevertheless
enjoying the benefits of participating transfers. It would further
be advantageous to have a system and method for facilitating
electronic funds transfers that would accommodate an exempt payment
request while accessing the benefits associated with participating
payment orders by including the ability to automatically generate
participating payment orders based at least in part on the exempt
payment request. It would further be advantageous to have a system
and method for facilitating electronic funds transfers that would
accommodate use of non-settling protocols by providing a convenient
means for settling such transfers.
SUMMARY OF THE INVENTION
[0025] The present invention is directed toward a system and method
for facilitating electronic funds transfers. In particular, the
invention is directed toward a system that enables a transferor's
financial institution to transfer funds on behalf of the transferor
through a financial institution of a transferee even though the
institutions of the transferor and the transferee may bear no
affiliation and even though the institutions of the transferor and
the transferee may require use of differing electronic funds
transfer systems and/or protocols. In an exemplary embodiment, the
system of the invention comprises a transfer administrator
configured to perform the steps of receiving an incoming payment
request that designates a transferor institution, a quantity of
funds to be transferred, and a transferee institution; generating a
translated payment order based at least in part on the incoming
payment request; and facilitating communication of the translated
payment order to a transferee institution; whereby funds are
electronically transferred from the transferor institution to the
transferee institution.
[0026] In an exemplary embodiment, an incoming payment request may
be transmitted in accordance with a funds transfer protocol
preferred by a transferor institution. Accordingly, the incoming
payment request may be in the form of an exempt (non-participating)
payment request and may also be in accordance with a domestic funds
transfer protocol, such as Fedwire. In accordance with this
embodiment, an exemplary system may receive the incoming exempt
payment request through one or more intermediary institution and
may generate a translated payment order, which is based at least in
part on the incoming payment request, but which may also be in
accordance with a funds transfer protocol preferred by the
designated transferee institution. Accordingly, the translated
payment order may be a participating payment order and may be in
accordance with a participating funds transfer protocol such as the
SWIFT protocol/messaging system. The system, through an
intermediary institution, facilitates communication of the
participating payment order to the transferee institution, whereby
funds are electronically transferred from the transferor
institution to the transferee institution. Finally, the system may
provide means for settling transfers among participating
institutions where the transfers are conducted using a non-settling
protocol.
[0027] In an exemplary embodiment, the method of the invention
comprises receiving an incoming payment request in accordance with
a first protocol, generating a translated payment order in
accordance with a second protocol and based at least in part on the
incoming payment request, and facilitating communication of the
translated payment order to a transferee institution, whereby funds
are electronically transferred from the transferor institution to
the transferee institution. In accordance with an exemplary
embodiment, the method may further comprise settling the transfer
by facilitating processing of a balancing payment, or one or more
accounting entry, among an account of transferor institution and an
account of transferee institution.
[0028] As a result, where the transferor institution's preferred
protocol may be exempt from, e.g., unable to fully or partially
participate in, various benefits of a particular electronic funds
transfer system and/or protocol, the system and method of the
present invention may enable the transferor institution to
nevertheless participate in those benefits. Moreover, it should be
noted that, in accordance with the invention, it is not necessary
that the transferor institution maintain any affiliation with the
transferee institution, nor is it necessary that both the
transferor institution and the transferee institution be Federal
Reserve member banks, or be otherwise equipped to use the same
electronic funds transfer protocol.
BRIEF DESCRIPTION OF EXEMPLARY DRAWINGS
[0029] The above-mentioned features and advantages of the present
invention can be more clearly understood from the following
detailed description considered in conjunction with the following
drawings, in which like numerals represent like elements and in
which:
[0030] FIG. 1 illustrates a conventional electronic funds transfer
accomplished using the Fedwire payment system;
[0031] FIG. 2 illustrates a system for facilitating an electronic
funds transfer in accordance with an exemplary embodiment of the
present invention; and
[0032] FIG. 3 illustrates an exemplary process for facilitating an
electronic funds transfer in accordance with the present
invention.
DETAILED DESCRIPTION OF EXEMPLARY EMBODIMENTS
[0033] The detailed description of exemplary embodiments of the
invention herein makes reference to the accompanying drawings,
which show the exemplary embodiments by way of illustration. While
these exemplary embodiments are described in sufficient detail to
enable those skilled in the art to practice the invention, it
should be understood that other embodiments may be realized and
that logical and mechanical changes may be made without departing
from the spirit and scope of the invention. Thus, this detailed
description is presented for purposes of illustration only and not
of limitation.
[0034] The present invention is directed toward a system and method
for facilitating electronic funds transfers. In particular, the
invention is directed toward a system that enables a transferor's
financial institution to transfer funds on behalf of the transferor
through a financial institution of a transferee even though the
institutions of the transferor and the transferee may bear no
direct affiliation with one another and even though the
institutions of the transferor and the transferee may require use
of differing electronic funds transfer systems and/or protocols. In
an exemplary embodiment, the system of the invention comprises a
transfer administrator configured to perform the steps of receiving
an incoming payment request that designates a transferor
institution, a quantity of funds to be transferred, and a
transferee institution; generating a translated payment order based
at least in part on the incoming payment request; and facilitating
communication of the translated payment order to a transferee
institution; whereby funds are electronically transferred from the
transferor institution to the transferee institution.
[0035] In an exemplary embodiment, an incoming payment request may
be transmitted in accordance with a funds transfer protocol
preferred by a transferor institution. Accordingly, the incoming
payment request may be in the form of an exempt (non-participating)
payment request and may also be in accordance with a domestic funds
transfer protocol, such as Fedwire. Further, the incoming payment
request may provide for settlement. In accordance with this
embodiment, an exemplary system may receive the incoming exempt
payment request either directly from a transferor institution or
through one or more intermediary institution and may generate a
translated payment order that is based at least in part on the
incoming payment request, but that may also be in accordance with a
funds transfer protocol preferred by the designated transferee
institution or that may enable an international electronic funds
transfer. Accordingly, the translated payment order may be a
participating payment order and may be in accordance with a
participating funds transfer protocol such as the SWIFT
protocol/messaging system.
[0036] In accordance with an exemplary embodiment, the system,
either directly or through an intermediary institution, facilitates
communication of the participating payment order to the transferee
institution, whereby funds are electronically transferred from the
transferor institution to the transferee institution. Accordingly,
the present invention enables a financial institution that may be
unable to fully or partially participate in various benefits
associated with use of a particular electronic funds transfer
system and/or protocol, and that may be unable to access an
international network of institutions, to nevertheless participate
in those benefits and to nevertheless access such an international
network of institutions by generating a participating payment order
based at least in part on an exempt (non-participating), domestic
payment order submitted by the non-participating institution.
[0037] Accordingly, the present invention provides a system and
method for facilitating electronic funds transfers that enables a
transferor's financial institution to transfer funds on behalf of
the transferor through a financial institution of a designated
transferee even though the institutions of the transferor and the
transferee may have no substantial affiliation and even though the
institutions of the transferor and the transferee may require or
prefer use of differing electronic funds transfer systems and/or
protocols. Further, the present invention enables an otherwise
exempt financial institution conducting otherwise exempt funds
transfers to continue to use all or part of its established exempt
funds transfer infrastructure while nevertheless enjoying the
benefits of participating transfers typically enjoyed by
participating institutions. The present system and method for
facilitating electronic funds transfers accommodates an exempt
payment request while nevertheless accessing the benefits
associated with participating payment orders by including the
ability to generate participating payment orders based at least in
part on the exempt payment orders.
[0038] More particularly, the present invention is a process
enhancement enabling an intermediary institution to process all or
any portion of funds transfer payment orders originated by a
financial institution via an exempt payment system, such as
Fedwire, to be fully or partially converted into a participating
payment order, such as a SWIFT payment order. To accomplish this
process while accessing other benefits, the system of the present
invention generates a participating payment order based, at least
in part, on the exempt payment order. As a result, an intermediary
institution that may offer a range of services based on its
participating-system-compliant infrastructure (e.g., SWIFT-based
payments processing hardware and software) may extend the
availability to offer those services to institutions that may
otherwise be limited to exempt transfers by virtue of their
inability or refusal to comply with requirements for participating
(e.g., sending SWIFT compliant payment orders) in incentive
offerings. Similarly, transferor institutions that may not possess
or otherwise be able to utilize a participating-system-compliant
infrastructure may nevertheless avail themselves of those
services.
[0039] In an exemplary embodiment, the system may be configured as
a data processing system that includes a processor for processing
digital data, a memory coupled to the processor for storing digital
data, and means, coupled to the memory, for inputting digital data.
In one embodiment, a transfer administrator may be configured as an
application program, may be stored in the memory, and may be
accessible by the processor for directing processing of digital
data by the processor.
[0040] The system may include a host server or other computing
systems including a processor for processing digital data, a memory
coupled to said processor for storing digital data, an input
digitizer coupled to the processor for inputting digital data, an
application program stored in said memory and accessible by said
processor for directing processing of digital data by said
processor, a display coupled to the processor and memory for
displaying information derived from digital data processed by said
processor and a plurality of databases, said databases including
client data, merchant data, financial institution data and/or data
of any party that could be used in association with the present
invention. As those skilled in the art will appreciate, user
computer will typically include an operating system (e.g., Windows
NT, 95/98/2000, Linux, Solaris, etc.) as well as various
conventional support software and drivers typically associated with
computers. User computer can be in a home or business environment
with access to a network. In an exemplary embodiment, access may be
had through the Internet through a commercially-available
web-browser software package.
[0041] Communication among the parties to the transaction and the
system of the present invention may be accomplished through any
suitable communication means, such as, for example, a telephone
network, intranet, Internet, point of interaction device (point of
sale device, personal digital assistant, cellular phone, kiosk,
etc.), online communications, off-line communications, wireless
communications, and/or the like. One skilled in the art will also
appreciate that, for security reasons, any databases, systems, or
components of the present invention may consist of any combination
of databases or components at a single location or at multiple
locations, wherein each database or system includes any of various
suitable security features, such as firewalls, access codes,
encryption, de-encryption, compression, decompression, and/or the
like.
[0042] The computing units may be connected with each other via a
data communication network. The network may be a public network and
assumed to be insecure and open to eavesdroppers. In the
illustrated implementation, the network may be embodied as the
Internet. In this context, the computers may or may not be
connected to the Internet at all times. For instance, each
institution's computer may employ a modem to occasionally connect
to the Internet, whereas the institution computing center might
maintain a permanent connection to the Internet. Specific
information related to the protocols, standards, and application
software utilized in connection with the Internet may not be
discussed herein. For further information regarding such details,
see, for example, DILIP NAIK, INTERNET STANDARDS AND PROTOCOLS
(1998); JAVA 2 COMPLETE, various authors, (Sybex 1999); DEBORAH RAY
AND ERIC RAY, MASTERING HTML 4.0 (1997). LOSHIN, TCP/IP CLEARLY
EXPLAINED (1997). All of these texts are hereby incorporated by
reference.
[0043] The systems may be suitably coupled to network via data
links. A variety of conventional communications media and protocols
may be used for data links. Such as, for example, a connection to
an Internet Service Provider (ISP) over the local loop as is
typically used in connection with standard modem communication,
cable modem, Dish networks, ISDN, Digital Subscriber Line (DSL), or
various wireless communication methods. Merchant system might also
reside within a local area network (LAN) which interfaces to
network via a leased line (T1, D3, etc.). Such communication
methods are well known in the art, and are covered in a variety of
standard texts. See, e.g., GILBERT HELD, UNDERSTANDING DATA
COMMUNICATIONS (1996), hereby incorporated by reference.
[0044] The computer may provide a suitable website or other
Internet-based graphical user interface which is accessible by
users. In one embodiment, the Internet Information Server,
Microsoft Transaction Server, and Microsoft SQL Server, are used in
conjunction with the Microsoft operating system, Microsoft NT web
server software, a Microsoft SQL database system, and a Microsoft
Commerce Server. Additionally, components such as Access or SQL
Server, Oracle, Sybase, Informix MySQL, Intervase, etc., may be
used to provide an ADO-compliant database management system. The
term "webpage" as it is used herein is not meant to limit the type
of documents and applications that might be used to interact with
the user. For example, a typical website might include, in addition
to standard HTML documents, various forms, Java applets,
Javascript, active server pages (ASP), common gateway interface
scripts (CGI), extensible markup language (XML), dynamic HTML,
cascading style sheets (CSS), helper applications, plug-ins, and
the like.
[0045] FIG. 2 illustrates an exemplary communication flow of a
system for facilitating an electronic funds transfer in accordance
with an exemplary embodiment of the present invention. With
reference to FIG. 2, an exemplary system includes a transfer
administrator 210, which is configured to received an incoming
payment request 215 and to issue a corresponding translated payment
order 225. In an exemplary embodiment, transferor 201 communicates
a request 205, supported by appropriate value, to transferor
institution 230. As shown in FIG. 2, transferor institution 230
responds to request 205 by communicating a corresponding payment
request 215 through intermediary institution 240 to transfer
administrator 210. It should be noted that in an alternative
embodiment, transferor institution 230 may communicate payment
request 215 directly to transfer administrator 210 in cases such as
where transferor institution 230 has a sufficient account
relationship with transferee institution 260. In response to
payment request 215, transfer administrator 210, retrieves
relationship information from database 211 and generates and issues
translated payment order 225, which is communicated through
intermediary institution 240 to transferee institution 260. It
should be noted that in an alternative embodiment, transfer
administrator 210 may communicate payment order 225 directly to
transferee institution 260 in cases such as where transferor
institution 230 has a sufficient account relationship with
transferee institution 260. Finally, transferee institution 260
complies with payment order 225 by making value 235 available to
transferee 290.
[0046] In accordance with an exemplary embodiment, transfer
administrator 210 may be configured to receive payment request 215
directly from transferor institution 230, or alternatively, through
intermediary institution 240. In addition, transfer administrator
210 may be configured to receive, accommodate, and comprehend
payment request 215 in one or more accepted protocols such as an
exempt funds transfer protocol, a domestic funds transfer protocol,
an international funds transfer protocol or another protocol known
in the art.
[0047] In an exemplary embodiment, transfer administrator 210 is in
communication with transferor institution 230, either directly or
through one or more intermediary institution 240 having an account
relationship with transferor institution 230. In addition, transfer
administrator 210 is configured to receive an incoming payment
request 215 and to credit one or more transfer demand account on
behalf of transferor institution 230 so as to balance the received
funds, i.e., any credit applied to the account of the intermediary
institution 240. Further, transfer administrator 210 may be
configured to determine and allocate fees and/or rewards and to
identify one or more appropriate intermediary institution 240,
accounts, and/or transfer protocols, e.g., by accessing one or more
databases 211 such as an ABA routing number database, a database of
relationship information, and a database of intermediary
institutions and their acceptable, desirable and/or required
transfer protocols. It should be noted that such relationship
information may include an algorithm for determining fees to be
assessed in connection with the electronic transfer of funds.
[0048] In an exemplary embodiment, transfer administrator 210 is
configured to generate a translated payment order that is
configured in accordance with an electronic funds transfer protocol
accepted, preferred, and/or required by transferee institution 260
and/or desired by transferor institution 230 and that is based at
least in part on the incoming payment request 215. In addition,
transfer administrator 210 is configured to facilitate issuance of
the translated payment order to accomplish an electronic funds
transfer among transferor institution 230 and transferee
institution 260.
[0049] Where the translated payment order 225 does not
intrinsically provide for settlement, i.e., the translated payment
order 225 is non-settling, transfer administrator 210 may process
one or more balancing payment, or one or more global accounting
entries, among the accounts of transferor institution 230,
transferee institution 260, and/or the one or more intermediary
institutions 240 in accordance with the incoming payment request
215. Exemplary balancing payments may include debiting transfer
demand account or another account that represents the proceeds from
the incoming funds transfer request 215, e.g., the transferred
payment, and facilitating the crediting of an account for the
benefit of transferee institution 260, crediting an outgoing
payment queue of the intermediary institution 240, and crediting an
escrow account of transferor institution 230 in accordance with the
acquired relationship information. For example, where the incoming
payment request 215 is a Fedwire transfer order, it is understood
that a corresponding credit will have been applied to the account
of the intermediary institution 240 at its affiliated Federal
Reserve institution. Accordingly, the intermediary institution 240
is required to apply a corresponding credit to an account
maintained by the intermediary institution 240 to balance the
credit applied at the Federal Reserve institution. Then, the
intermediary institution 240 may credit an account maintained by
it, or one or more of its affiliated institutions, on behalf of
transferee institution 260 to fund the translated order it
issues.
[0050] In an exemplary embodiment, incoming payment request 215
designates, for example, the identity of transferor institution
230, a quantity of funds to be transferred, and the identity of
transferee institution 260. In addition, payment request 215 may
designate a value date upon which to perform the transfer. Further,
payment request 215 may be configured in accordance with an
electronic funds transfer protocol preferred by transferor
institution 230. Accordingly, payment request 215 may be an exempt
payment request configured in accordance with an exempt electronic
funds transfer protocol and/or may be configured to facilitate
electronic funds transfers via domestic or international electronic
funds transfer networks. Further, payment request 215 may be an
intrinsically settling payment request, such as a Fedwire
electronic funds transfer request. Transfer administrator 210 is
configured to recognize and accommodate the particular funds
transfer protocol of payment request 215 (e.g., SWIFT,
Fedwire).
[0051] Relationship information may be acquired from one or more
database 211 and, as discussed briefly above, may include an
algorithm for determining fees to be assessed in connection with
the electronic transfer of funds. Relationship information may be
any information necessary or useful in determining associated fees
and/or rewards and in identifying appropriate intermediary
institutions 240, accounts, and/or transfer protocols. As described
above, database 211 may comprise one or more databases such as an
ABA routing number database, a database of relationship
information, and a database of intermediary institutions and their
acceptable, desirable and/or required transfer protocols.
[0052] The databases 211 discussed herein may be any type of
database, such as relational, hierarchical, object-oriented, and/or
the like. Common database products that may be used to implement
the databases include DB2 by IBM (White Plains, N.Y.), any of the
database products available from Oracle Corporation (Redwood
Shores, Calif.), Microsoft Access or MSSQL by Microsoft Corporation
(Redmond, Wash.), or any other database product. The database 211
may be organized in any suitable manner, including as data tables
or lookup tables. Association of certain data may be accomplished
through any data association technique known and practiced in the
art. For example, the association may be accomplished either
manually or automatically. Automatic association techniques may
include, for example, a database search, a database merge, GREP,
AGREP, SQL, and/or the like. The association step may be
accomplished by a database merge function, for example, using a
"key field" in each of the manufacturer and retailer data tables. A
"key field" partitions the database 211 according to the high-level
class of objects defined by the key field. For example, a certain
class may be designated as a key field in both the first data table
and the second data table, and the two data tables may then be
merged on the basis of the class data in the key field. In this
embodiment, the data corresponding to the key field in each of the
merged data tables is preferably the same. However, data tables
having similar, though not identical, data in the key fields may
also be merged by using AGREP, for example.
[0053] In an exemplary embodiment, translated payment order is
configured in accordance with an electronic funds transfer protocol
accepted, preferred, and/or required by transferee institution 260
and/or desired by transferor institution 230. Accordingly,
translated payment order may be a participating payment order
configured in accordance with a participating, electronic funds
transfer protocol and may be based at least in part on the incoming
payment request 215. It should be noted that translated payment
order is configured to facilitate an electronic funds transfer
among the intermediary institution 240 and transferee institution
260 and/or to facilitate processing one or more balancing payment,
or one or more global accounting entries, among the accounts of
transferor institution 230, transferee institution 260, and/or the
one or more intermediary institutions 240. Accordingly, translated
payment order may cause debiting of an account that represents the
proceeds from the incoming funds transfer request 215, e.g., the
transferred payment, and facilitating the crediting of an account
for the benefit of transferee institution 260.
[0054] It should be noted that intermediary institution 240 may
comprise transferor institution 230, transferee institution 260,
and/or one or more affiliated correspondent institutions. Further,
any or all of the accounts necessary to accomplish an exemplary
transfer may be maintained by transferor institution 230,
transferee institution 260, and/or any of the one or more
intermediary institutions 240. In an exemplary embodiment, a
temporary transfer demand account may be established to represent
the funds of the incoming transfer. The funds may then be
maintained in transfer demand account until such time as the
associated fees and/or rewards have been determined and the
appropriate intermediary institutions 240, accounts, and/or
transfer protocols have been identified to accomplish the
transfer.
[0055] In an exemplary embodiment, transfer administrator 210 may
be configured to facilitate processing a balancing payment, or one
or more accounting entry, among one or more account of transferor
institution's 230 and one or more account of affiliated institution
250. Accordingly, transfer administrator 210 may be configured to
facilitate applying a debit to a transfer account of transferor
institution 230, e.g., Fedwire account, and applying a credit to
the corresponding transfer account of affiliated institution 250.
In an exemplary embodiment, transferor institution 230 may own a
transfer demand account and a fees payable escrow account both of
which may be credited and/or periodically reconciled by transfer
administrator 210 so that net fees and/or reimbursements may be
received by transferor institution 230. In an exemplary embodiment
transferee institution 260 owns an account, capable of being
credited by transfer administrator 210, with intermediary
institution 240, e.g., the CHIPS or Fedwire account of transferee
institution 260.
[0056] In another exemplary embodiment, transfer administrator 210
may be configured to facilitate debiting an account of affiliated
institution 250 held by intermediary institution 240 as well as
crediting an account of intermediary institution 240 held by
affiliated institution 250. In yet another exemplary embodiment,
transfer administrator 210 may be configured to facilitate debiting
an account of intermediary institution 240 held by affiliated
institution 250, and crediting an account of transferor institution
230. In an exemplary embodiment, transfer administrator 210 may be
configured to facilitate debiting a transfer demand account of
transferor institution 230, crediting the outgoing payments queue
of intermediary institution 240, and crediting the fees payable
escrow account of transferor institution 230. In yet another
exemplary embodiment, transfer administrator 210 may be configured
to facilitate debiting the scheduled outgoing payments queue of
intermediary institution 240 and crediting the account of
transferee institution 260 held by intermediary institution 240,
e.g., the CHIPS or Fedwire account of transferee institution 260.
Finally, transfer administrator 210 may be configured to facilitate
reconciling the fees payable escrow account of transferor
institution 230 and calculating and paying net fees and/or
reimbursements to transferor institution 230.
[0057] Transferor institution 230 may also maintain and make
available relationship information that includes formulas for fees
to be deducted from the transfer and other related information to
be matched with a particular payment. This relationship information
may include, for example, one or more algorithms for determining
fees to be assessed in connection with the electronic transfer of
funds.
[0058] In addition to other desirable benefits, the instant
invention provides transferor institution 230, through intermediary
institution 240, with enhanced access to international payment
processing networks. Such access enables transferor institution 230
to avoid or minimize the need to invest in a participating (e.g.,
SWIFT) connection, thereby reducing startup costs as well as
recurring fees (e.g., subscription fees).
[0059] In an exemplary embodiment, intermediary institution 240 may
be equipped with, and/or shares, the same or similar
software/hardware payments platform (e.g., an intranet) as
affiliated institution 250 so that intermediary institution 240 may
process the incoming transfer payments of affiliated institution
250 for the related payments of intermediary institution 240.
[0060] In an exemplary embodiment, intermediary institution 240
utilizes an intranet and middleware package, such as IISI, that
enables intermediary institution 240 to communicate among the
intranet and middleware (e.g., Merva) of intermediary institution
240, allowing intermediary institution 240 to receive SWIFT
communications, to read incoming exempt payments that are coded
and/or formatted by transferor institution 230 as hybrid
instructions for accomplishing exempt payments.
[0061] In accordance an exemplary embodiment, intermediary
institution 240 may be configured to receive and process
participating payment order 225 in substantially the same manner as
transfers received from outside intermediary institution 240 on the
standard participating network, e.g., the SWIFT network.
[0062] As used herein, the terms "end user," "consumer,"
"customer," "cardmember," "business," "institution," "bank,"
"client," "party," and "merchant" may be used interchangeably with
each other, and each shall mean any person, entity, machine,
hardware, software and/or business. Although labeled as a
"institution," the institution may represent other types of
financial and/or card issuing institutions, such as banks, credit
card companies, card sponsoring companies, depository institutions,
money transmitters, financial data processors, or third party
issuers under contract with financial institutions. It is further
noted that other participants may be involved in some phases of the
transaction, such as an intermediary settlement institution, but
these participants are not shown.
[0063] Each participant may be equipped with a computing system to
facilitate online commerce transactions. Each institution has a
computing unit in the form of a personal computer, although other
types of computing units may be used including laptops, notebooks,
hand held computers, set-top boxes, and the like. The merchant has
a computing unit implemented in the form of a computer-server,
although other implementations are possible. The institution has a
computing center shown as a main frame computer. However, the
institution computing center may be implemented in other forms,
such as a mini-computer, a PC server, a network set of computers,
and the like.
[0064] Certain transactions may necessitate communication among the
various financial institutions. The computers of the various
financial institutions may be interconnected via a second network,
referred to as a transfer network. The transfer network represents
existing proprietary networks that presently accommodate electronic
funds transfers and other transactions for credit cards, debit
cards, and other types of financial/banking cards. The transfer
network may be a closed network that is assumed to be secure from
eavesdroppers. Examples of the electronic transfer system may be
implemented at the various financial institutions. In an exemplary
implementation, the transfer network may be implemented as computer
software modules loaded onto each computer and/or computing center
of one or more of the financial institutions so that the computers
of the other financial institutions do not require any additional
software to participate in the transfers supported by the online
transfer system.
[0065] In an exemplary embodiment, the method of the invention
comprises receiving an incoming payment request 215 in accordance
with a first protocol, generating a translated payment order in
accordance with a second protocol and based at least in part on the
incoming payment request 215, and facilitating communication of the
translated payment order to transferee institution 260, whereby
funds are electronically transferred from transferor institution
230 to transferee institution 260.
[0066] FIG. 3 illustrates an exemplary process for facilitating an
electronic funds transfer in accordance with the present invention.
With reference to FIG. 3, transferor institution 230 receives a
payment request 205 from transferor 101 and agrees to comply with
the request 205 by sending a payment to transferee institution 260,
either directly or through one or more intermediary institution 240
(step 310). Transferor institution 230 sends a corresponding
payment request 215 in compliance with a required or preferred
electronic funds transfer protocol, e.g., Fedwire or another
electronic funds transfer protocol, to be received by transfer
administrator 210, either directly or through one or more
intermediary institution 240 (step 320). As described herein, the
payment request 215 may be coded and/or formatted as per the
preferences or requirements of the intermediary institution 240,
i.e., hybrid instructions. It should be noted that intermediary
institution 240 may further comprise one or more additional
affiliated institution.
[0067] In an exemplary embodiment, transfer administrator 210
receives an incoming payment request 215 and establishes and
credits a transfer demand account on behalf of transferor
institution 230 so as to balance the received funds, i.e., any
credit applied to the account of the intermediary institution 240.
In an exemplary embodiment, in response to the payment request 215,
transfer administrator 210 facilitates applying a debit to a
transfer account of transferor institution 230, e.g., Fedwire
Account (step 322), and applying a credit to the corresponding
transfer account of intermediary institution 240 (step 324).
[0068] In an exemplary embodiment, transfer administrator 210
acquires relationship information, which may include accessing
and/or executing an algorithm for determining fees to be assessed
in connection with the electronic transfer of funds. Based on the
acquired relationship information, transfer administrator 210
determines associated fees and/or rewards and identifies
appropriate intermediary institutions 240, accounts, and/or
transfer protocols. In an exemplary embodiment, transfer
administrator 210 accomplishes this step by accessing one or more
databases 211 described above.
[0069] Based on the incoming payment request 215 and the acquired
relationship information, transfer administrator 210 generates a
translated payment order by translating the payment request 215,
e.g., from an exempt electronic funds transfer protocol to a
participating electronic funds transfer protocol. Accordingly, in
an exemplary transfer, transfer administrator 210 may generate a
translated payment order, such as a participating payment order, by
translating an incoming payment request 215, such as an exempt
payment request, from the electronic funds transfer protocol of the
incoming payment request 215, e.g., an exempt electronic funds
transfer protocol, to a translated electronic funds transfer
protocol, e.g., a participating electronic funds transfer protocol.
Accordingly, in an exemplary transfer, transfer administrator 210
converts all or a portion of an exempt payment to a participating
payment, e.g., by converting an exempt Fedwire payment request to a
participating SWIFT message.
[0070] Once a translated payment order has been generated, transfer
administrator 210 may issue the translated payment order so as to
accomplish the requested electronic funds transfer among transferor
institution 230 to transferee institution 260. In accordance with
an exemplary embodiment, the translated payment order may also
cause the processing of one or more balancing payment, or one or
more global accounting entries, among the accounts of transferor
institution 230, transferee institution 260, and/or the one or more
intermediary institutions 240 in accordance with the incoming
payment request 215. Exemplary balancing payments may include
debiting a transfer demand account or another account that
represents the proceeds from the incoming funds transfer payment
request 215, e.g., the transferred payment, and facilitating the
crediting of an account for the benefit of transferee institution
260, crediting an outgoing payment queue of the intermediary
institution 240, and crediting an escrow account of transferor
institution 230 in accordance with the acquired relationship
information.
[0071] For example, where the incoming payment request 215 is a
Fedwire transfer order, it is understood that a corresponding
credit will have been applied to the account of the intermediary
institution 240 at its affiliated Federal Reserve institution.
Accordingly, the intermediary institution 240 is required to apply
a corresponding credit to an account maintained by the intermediary
institution 240 to balance the credit applied at the Federal
Reserve institution. Then, the intermediary institution 240 may
credit an account maintained by it, or one or more of its
affiliated institutions, on behalf of transferee institution 260 to
fund the translated payment order 225 it issues. This step may also
include crediting an escrow account of transferor institution 230
in accordance with the acquired relationship information.
[0072] Where intermediary institution 240 comprises one or more
affiliated institution, the affiliated institution transfers the
payment to intermediary institution 240 (step 330). In one
exemplary embodiment, affiliated institution and intermediary
institution 240 share the same or similar software/hardware
payments platform (e.g., an intranet), and intermediary institution
240 processes the incoming transfer payments of affiliated
institution for the related payments of intermediary institution
240 (step 332). For example, an exemplary transfer administrator
210 facilitates debiting an account of affiliated institution with
intermediary institution 240 (step 334) as well as crediting an
account of intermediary institution 240 held by affiliated
institution (step 336).
[0073] In an exemplary embodiment, issuing the translated payment
order may comprise sending the translated payment order to be
received by the intermediary institution 240 to facilitate its
automated processing through the established transfer
infrastructure of the intermediary institution 240. In an exemplary
embodiment, intermediary institution 240 utilizes an intranet and
middleware package, such as IISI, that enables intermediary
institution 240 to communicate among the intranet and the
middleware (e.g., Merva) of intermediary institution 240, allowing
intermediary institution 240 to receive SWIFT communications and to
read incoming exempt payments that are coded and/or formatted by
transferor institution 230 as hybrid instructions for accomplishing
exempt payments. In accordance with an exemplary embodiment, such
payments are credited to an account established for transferor
institution 230 by intermediary institution 240 (step 340). In
accordance with this embodiment, transfer administrator 210
facilitates debiting an account of intermediary institution 240
held by affiliated institution (step 342), and crediting the demand
account of transferor institution 230 (step 344).
[0074] In accordance with an exemplary embodiment, transfer
administrator 210 acquires data regarding the formula, associated
with transferor institution 230, for fees to be deducted from the
transfer and other related information (i.e., relationship
information) based on a match of the payment to a data file
containing the relationship information of transferor institution
230 (step 350). This relationship information may include, for
example, one or more algorithms for determining fees to be assessed
in connection with the electronic transfer of funds. Based on the
relationship information, transfer administrator 210 may generate
translated payment order, less appropriate fees, based at least in
part on the payment request 215, yet conforming with a desired or
required electronic funds transfer protocol, such as the SWIFT
protocol or another participating electronic funds transfer
protocol (step 360). Transfer administrator 210 may then send
translated payment order 225 to transferee institution 260, either
directly or through intermediary institution 240 (step 362). In an
exemplary embodiment, transfer administrator 210 may facilitate
debiting a transfer demand account of transferor institution 230
(step 364), crediting the outgoing payments account of intermediary
institution 240 (step 366), and crediting the fees payable escrow
account of transferor institution 230 (step 368).
[0075] In accordance with an exemplary embodiment, intermediary
institution 240 processes translated payment orders that were
generated in the ordinary course, in substantially the same manner
as transfers received from outside intermediary institution 240 on
a standard participating network, e.g., using existing
infrastructure such as a SWIFT network (step 370). In an exemplary
embodiment, transfer administrator 210 facilitates debiting the
scheduled outgoing payments of intermediary institution 240 (step
372) and crediting an account of transferee institution 260 held by
intermediary institution 240, e.g., the CHIPS or Fedwire account of
transferee institution 260 (step 374). Finally, on a periodic
basis, e.g., monthly, a fees payable escrow account of transferor
institution 230 may be reconciled (step 376) and net fees and/or
reimbursements calculated (step 377) and paid to transferor
institution 230 (step 378).
[0076] As a result, the present invention provides many benefits
over the prior art including increasing the number of parties that
may offer a full range of payment products, rewards, and other
incentives. Moreover, transferor institution 230 gains full access
to the domestic international payments processing network of an
intermediary institution 240. This obviates the need to invest in a
participating, e.g., SWIFT, connection, thereby reducing startup
costs as well as recurring, e.g., subscription, fees. In addition,
the present invention eliminates or dramatically reduces the need
to train staff to operate a participating system such as SWIFT.
Moreover, the present invention facilitates automated processing;
access to the investigations/inquiry network/capabilities of
intermediary institution 240, e.g., the abilities to track
payments, check status, make inquiries, help resolve
errors/disputes; and access to the participating programs of
intermediary institution 240.
[0077] In addition, the present invention enables intermediary
institution 240 to charge a fee from proceeds to any transferee
institution 260 who is not a client of transferor institution 230,
reducing or eliminating the need of transferor institution 230 to
charge part or all of the fee from transferor institution 230.
Moreover, based on transfer volume, frequency, or any other
relevant criteria, intermediary institution 240 may rebate back to
transferor institution 230 a portion of the participating rewards
collected by intermediary institution 240 based on the transfers
sent to the intermediary institution 240 from transferor
institution 230. In an exemplary embodiment, the system further
provides for periodic reconciliation of transfer account activity
by each intermediary institution 240 (step 380). Finally, the
system enables continued use of established transfer systems such
as Fedwire, obviating the need for widespread re-tooling to a
participating protocol such as SWIFT and the corresponding loss of
settlement capabilities provided by Fedwire, thereby also
eliminating the need of transferor institution 230 to perform the
additional step of covering, i.e., paying or settling, its payment
orders.
[0078] In accordance with an exemplary embodiment, a specification
of transferor institution 230 may be developed to serve as a key
identifier to be used for routing incoming payments. This
specification may comprise an ABA routing number and/or a
distinctive name or any other unique institution identifier. In
addition, a demand account in the name of the U.S. institution may
be established containing algorithm for determining pricing to be
applied to payments.
[0079] An "account number," or any other "identifier," as used
herein, includes any device, code, or other identifier/indicia
suitably configured to allow the consumer to interact or
communicate with the system, such as, for example,
authorization/access code, personal identification number (PIN),
Internet code, other identification code, and/or the like which may
be optionally located on a rewards card, charge card, credit card,
debit card, prepaid card, telephone card, smart card, magnetic
stripe card, bar code card, radio frequency card and/or the like.
The account number may be distributed and stored in any form of
plastic, electronic, magnetic, radio frequency, audio and/or
optical device capable of transmitting or downloading data from
itself to a second device. A customer account number may be, for
example, a sixteen-digit credit card number, although each credit
provider has its own numbering system, such as the fifteen-digit
numbering system used by American Express. Each company's credit
card numbers comply with that company's standardized format such
that the company using a sixteen-digit format will generally use
four spaced sets of numbers, as represented by the number "0000
0000 0000 0000". The first five to seven digits are reserved for
processing purposes and identify the issuing institution, card type
and etc. In this example, the last sixteenth digit may be used as a
sum check for the sixteen-digit number. The intermediary
eight-to-ten digits are used to uniquely identify the customer.
[0080] As transfer payment requests 215 are received by transfer
administrator 210, a party's specification, e.g., of transferor
institution 230, may be routed to a queue on the intranet. Once in
the queue, a payment may be processed as an incoming credit from
the transfer protocol followed by a footprint into the ABA queue
followed by a review by staff for repairs and/or turning on fee
indicators in the intranet, and insertion of a unique identifier to
post the entry in the name of transferor institution 230. Fees are
collected, and an automatic outgoing SWIFT instruction,
appropriately addressed, e.g., to AEIBUS33, may be generated
containing full details of the payment, e,g, either MT 100 on
Customer Transfer or MT 202 on Institution to Institution transfer.
Finally, intermediary institution 240 may receive and process this
message as normal SWIFT traffic. In accordance with an exemplary
embodiment, cut-off times are established for limiting receipt of
exempt transfer payment requests 215 to ensure that no payments are
trapped in intranet beyond processing cutoff times with Fedwire and
CHIPS.
[0081] In one embodiment, only Fedwire credits are processed by the
system. In accordance with this embodiment, the system verifies
that only the incoming Fedwire transfers are routed. If entries are
posted erroneously to an account, in one embodiment, the
erroneously credited account should have zero balance at day's end
with met cut-off times. In accordance with an exemplary embodiment,
intermediary institution 240 may provide customer service on
transfer-related investigations. Audit records of the payment may
contain information of the original incoming Fedwire in the payment
history. If rebates or incentives are part of the marketing plan,
transfer administrator 210 may capture and retain information
regarding volumes and fees taken. The volume of incoming Fedwire
international payments by transferor institution 230 may be
periodically linked to an automatic rebate.
[0082] Finally, the system may be configured to provide full audit
trail details of the payment flow of transfers completed by the
system. In one embodiment, statements of account may be sent by
fax, and access to intermediary institution 240 may also be
available. The system may also be configured to support and
recognize specific participating transfer protocols and to
determine and use an appropriate algorithm, e.g., benededuct. The
system may also include a program to download the queue data to a
MS Access database and create a report of the transactions where
the fees have to be changed.
[0083] The present invention may be described herein in terms of
functional block components, screen shots, optional selections and
various processing steps. It should be appreciated that such
functional blocks may be realized by any number of hardware and/or
software components configured to perform the specified functions.
For example, the present invention may employ various integrated
circuit components, e.g., memory elements, processing elements,
logic elements, look-up tables, and the like, which may carry out a
variety of functions under the control of one or more
microprocessors or other control devices. Similarly, the software
elements of the present invention may be implemented with any
programming or scripting language such as C, C++, Java, COBOL,
assembler, PERL, Visual Basic, SQL Stored Procedures, extensible
markup language (XML), with the various algorithms being
implemented with any combination of data structures, objects,
processes, routines or other programming elements. Further, it
should be noted that the present invention may employ any number of
conventional techniques for data transmission, signaling, data
processing, network control, and the like. Still further, the
invention could be used to detect or prevent security issues with a
client-side scripting language, such as JavaScript, VBScript or the
like. For a basic introduction of cryptography and network
security, the following may be helpful references: (1) "Applied
Cryptography: Protocols, Algorithms, And Source Code In C," by
Bruce Schneier, published by John Wiley & Sons (second edition,
1996); (2) "Java Cryptography" by Jonathan Knudson, published by
O'Reilly & Associates (1998); (3) "Cryptography & Network
Security: Principles & Practice" by William Stalling, published
by Prentice Hall; all of which are hereby incorporated by
reference.
[0084] It will be appreciated, that many applications of the
present invention could be formulated. One skilled in the art will
appreciate that the network may include any system for exchanging
data or transacting business, such as the Internet, an intranet, an
extranet, WAN, LAN, satellite communications, and/or the like. It
is noted that the network may be implemented as other types of
networks, such as an interactive television (ITV) network. The
users may interact with the system via any input device such as a
keyboard, mouse, kiosk, personal digital assistant, handheld
computer (e.g., Palm Pilot.RTM.), cellular phone and/or the like.
Similarly, the invention could be used in conjunction with any type
of personal computer, network computer, workstation, minicomputer,
mainframe, or the like running any operating system such as any
version of Windows, Windows NT, Windows2000, Windows 98, Windows
95, MacOS, OS/2, BeOS, Linux, UNIX, Solaris or the like. Moreover,
although the invention is frequently described herein as being
implemented with TCP/IP communications protocols, it will be
readily understood that the invention could also be implemented
using IPX, Appletalk, IP-6, NetBIOS, OSI or any number of existing
or future protocols. Moreover, the system contemplates the use,
sale or distribution of any goods, services or information over any
network having similar functionality described herein.
[0085] It should be appreciated that the particular implementations
shown and described herein are illustrative of the invention and
its best mode and are not intended to otherwise limit the scope of
the present invention in any way. Indeed, for the sake of brevity,
conventional data networking, application development and other
functional aspects of the systems (and components of the individual
operating components of the systems) may not be described in detail
herein. Furthermore, the connecting lines shown in the various
figures contained herein are intended to represent exemplary
functional relationships and/or physical couplings among the
various elements. It should be noted that many alternative or
additional functional relationships or physical connections may be
present in a practical electronic transaction system.
[0086] As will be appreciated by one of ordinary skill in the art,
the present invention may be embodied as a method, a data
processing system, a device for data processing, and/or a computer
program product. Accordingly, the present invention may take the
form of an entirely software embodiment, an entirely hardware
embodiment, or an embodiment combining aspects of both software and
hardware. Furthermore, the present invention may take the form of a
computer program product on a computer-readable storage medium
having computer-readable program code means embodied in the storage
medium. Any suitable computer-readable storage medium may be
utilized, including hard disks, CD-ROM, optical storage devices,
magnetic storage devices, and/or the like.
[0087] The present invention is described herein with reference to
screen shots, block diagrams and flowchart illustrations of
methods, apparatus (e.g., systems), and computer program products
according to various aspects of the invention. It will be
understood that each functional block of the block diagrams and the
flowchart illustrations, and combinations of functional blocks in
the block diagrams and flowchart illustrations, respectively, can
be implemented by computer program instructions. These computer
program instructions may be loaded onto a general purpose computer,
special purpose computer, or other programmable data processing
apparatus to produce a machine, such that the instructions which
execute on the computer or other programmable data processing
apparatus create means for implementing the functions specified in
the flowchart block or blocks.
[0088] These computer program instructions may also be stored in a
computer-readable memory that can direct a computer or other
programmable data processing apparatus to function in a particular
manner, such that the instructions stored in the computer-readable
memory produce an article of manufacture including instruction
means which implement the function specified in the flowchart block
or blocks. The computer program instructions may also be loaded
onto a computer or other programmable data processing apparatus to
cause a series of operational steps to be performed on the computer
or other programmable apparatus to produce a computer-implemented
process such that the instructions which execute on the computer or
other programmable apparatus provide steps for implementing the
functions specified in the flowchart block or blocks.
[0089] Accordingly, functional blocks of the block diagrams and
flowchart illustrations support combinations of means for
performing the specified functions, combinations of steps for
performing the specified functions, and program instruction means
for performing the specified functions. It will also be understood
that each functional block of the block diagrams and flowchart
illustrations, and combinations of functional blocks in the block
diagrams and flowchart illustrations, can be implemented by either
special purpose hardware-based computer systems which perform the
specified functions or steps, or suitable combinations of special
purpose hardware and computer instructions.
[0090] In the foregoing specification, the invention has been
described with reference to specific embodiments. However, it will
be appreciated that various modifications and changes can be made
without departing from the scope of the present invention. The
specification and figures are to be regarded in an illustrative
manner, rather than a restrictive one, and all such modifications
are intended to be included within the scope of present invention.
For example, the steps recited in any of the method or process
descriptions may be executed in any order and are not limited to
the order presented.
[0091] Benefits, other advantages, and solutions to problems have
been described above with regard to specific embodiments. However,
the benefits, advantages, solutions to problems, and any element(s)
that may cause any benefit, advantage, or solution to occur or
become more pronounced are not to be construed as critical,
required, or essential features. As used herein, the terms
"comprises", "comprising", or any other variation thereof, are
intended to cover a non-exclusive inclusion, such that a process,
method, article, or apparatus that comprises a list of elements
does not include only those elements but may include other elements
not expressly listed or inherent to such process, method, article,
or apparatus. Further, no element described herein is required for
the practice of the invention unless expressly described as
"essential" or "critical."
* * * * *