U.S. patent application number 12/537969 was filed with the patent office on 2010-01-07 for debit card billing system and method involving multiple accounts.
This patent application is currently assigned to TCF Financial Corporation. Invention is credited to William A. Cooper.
Application Number | 20100001068 12/537969 |
Document ID | / |
Family ID | 36594445 |
Filed Date | 2010-01-07 |
United States Patent
Application |
20100001068 |
Kind Code |
A1 |
Cooper; William A. |
January 7, 2010 |
Debit Card Billing System and Method Involving Multiple
Accounts
Abstract
A system and method for managing a financial institution account
with a transaction card used as a deferred-debit transaction card
and as an automated banking card wherein debit transactions are
stored by a managing computer system for a billing cycle without
being automatically debited against the account until after debit
transaction activity. In certain instances, this is not until after
the activity for the billing cycle is reported to the holder of the
account. Also, a limited time period is provided relative to the
billing cycle, for the user to provide funds as consideration for
payment against the transaction card purchases without an automatic
debiting of available funds as full consideration for payment
against the deferred-debit purchases. Before the limited time
period lapsing, the available amount useful for additional
purchases can be increased.
Inventors: |
Cooper; William A.;
(Wayzata, MN) |
Correspondence
Address: |
CRAWFORD MAUNU PLLC
1150 NORTHLAND DRIVE, SUITE 100
ST. PAUL
MN
55120
US
|
Assignee: |
TCF Financial Corporation
|
Family ID: |
36594445 |
Appl. No.: |
12/537969 |
Filed: |
August 7, 2009 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
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12140346 |
Jun 17, 2008 |
7594606 |
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12537969 |
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11019651 |
Dec 21, 2004 |
7398919 |
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12140346 |
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09614270 |
Jul 12, 2000 |
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11019651 |
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Current U.S.
Class: |
235/380 ;
235/379; 705/34; 705/44 |
Current CPC
Class: |
G06Q 20/24 20130101;
G06Q 40/00 20130101; G06Q 20/40 20130101; G06Q 40/12 20131203; G06Q
30/04 20130101; G06Q 20/10 20130101; G06Q 30/0226 20130101 |
Class at
Publication: |
235/380 ; 705/34;
705/44; 235/379 |
International
Class: |
G06K 5/00 20060101
G06K005/00; G06Q 30/00 20060101 G06Q030/00; G06Q 40/00 20060101
G06Q040/00 |
Claims
1. A system, comprising: a computer-based circuit that is
configured and programmed to manage, for users on behalf of a
financial institution, transaction-card debits against
consideration-bearing financial accounts, wherein the
computer-based circuit includes access circuitry, including a
memory database, for storing and accessing data that represents,
for each of the consideration-bearing financial accounts, an amount
of user funds attributed to the consideration-bearing financial
account and a related deferred-debit limit, and for permitting
transfer of funds from another financial account; and the
computer-based circuit including at least one computer module that
is configured, for each consideration-bearing financial account,
to: provide access to an available deferred-debit spending balance
that is based on transaction-card purchases and the deferred-debit
limit, track transaction-card purchases, against the
consideration-bearing financial account using the available
deferred-debit spending balance, for the transaction-card purchases
and for a period of time that relates to a billing cycle, defer
transaction-card debits against the consideration-bearing financial
account by recording data representing the amounts of the purchases
without debiting the consideration-bearing financial account,
reduce the available deferred-debit spending balance to account for
the transaction-card purchases during the period of time, provide
an opportunity for a user of the consideration-bearing financial
account to designate one of multiple sources of payment, including
the consideration-bearing financial account and the other financial
account, to cover the transaction-card purchases, transfer funds
from one of the multiple sources of payment to cover the
transaction-card purchases and accounting for the transferred funds
relative to the available deferred-debit spending balance, and
increase, at least by an amount corresponding to the transferred
funds, the available deferred-debit spending balance for a new
billing cycle.
2. The system of claim 1, wherein said at least one computer module
is further configured to increase the available deferred-debit
spending balance resetting the available deferred-debit spending
balance to a previously-used level.
3. The system of claim 1, wherein said at least one computer module
is further configured to increase the available deferred-debit
spending balance near the end of the period of time by resetting
the available deferred-debit spending balance to a previous
level.
4. The system of claim 1, wherein said at least one computer module
is further configured to increase the available deferred-debit
spending balance by resetting the available deferred-debit spending
balance to a previous level, before the funds are transferred.
5. The system of claim 1, wherein said at least one computer module
is further configured to increase the available deferred-debit
spending balance by resetting the available deferred-debit spending
balance to a previous level, and thereafter to provide the
opportunity for the user of the consideration-bearing financial
account to designate.
6. The system of claim 1, wherein said at least one computer module
is further configured to increase the available deferred-debit
spending balance, thereafter to provide the opportunity for the
user of the consideration-bearing financial account to designate,
and thereafter to transfer the funds.
7. The system of claim 1, wherein said at least one computer module
is further configured to increase the available deferred-debit
spending balance by automatically transferring the funds
irrespective of whether the user of the consideration-bearing
financial account designates one of multiple sources of
payment.
8. The system of claim 1, wherein the consideration-bearing
financial account is an account held by a trust-based company that
administers and invests financial assets in the
consideration-bearing financial account.
9. The system of claim 1, wherein the consideration-bearing
financial account is an account, other than a bank account, that
earns interest.
10. The system of claim 1, wherein the consideration-bearing
financial account is a trust account.
11. The system of claim 1, wherein said at least one computer
module is further configured to authorize the transaction-card
purchases, against the consideration-bearing financial account
based on a status of the consideration-bearing financial
account.
12. The system of claim 1, wherein said at least one computer
module is further configured to provide the user with a time
period, after the period of time, during which the opportunity is
provided for the user of the consideration-bearing financial
account to designate one of multiple sources of payment to cover
the transaction-card purchases.
13. The system of claim 1, wherein said at least one computer
module is further configured to, at the end of the billing cycle,
generate and provide user access to a statement of the
transaction-card purchases, and automatically reset the available
deferred-debit spending balance for new purchases made in a
subsequent billing cycle.
14. The system of claim 1, wherein said at least one computer
module is further configured to provide an interest credit to the
user of the financial account based upon interest earned on funds
for transaction-card debits that are deferred, thereby advantaging
the user by deferring the debits while earning interest based on
the funds in the account during the billing cycle.
15. A computer-based method for managing aspects of transactions
involving transaction cards issued to respective users for their
respective consideration-bearing financial accounts held at a
financial institution, the method executed by a computer that
performs the steps of: managing, for users on behalf of a financial
institution, transaction-card debits against consideration-bearing
financial accounts, and including storing and accessing data that
represents, for each of the consideration-bearing financial
accounts, an amount of user funds attributed to the
consideration-bearing financial account and a related
deferred-debit limit, and permitting transfer of funds from another
financial account; and for each consideration-bearing financial
account: providing access to an available deferred-debit spending
balance that is based on transaction-card purchases and the
deferred-debit limit, tracking transaction-card purchases against
the consideration-bearing financial account using the available
deferred-debit spending balance, for the transaction-card purchases
and for a period of time that relates to a billing cycle, deferring
transaction-card debits against the consideration-bearing financial
account by recording data representing the amounts of the purchases
without debiting the consideration-bearing financial account,
reducing the available deferred-debit spending balance to account
for the transaction-card purchases during the period of time,
providing an opportunity for a user of the consideration-bearing
financial account to designate one of multiple sources of payment,
including the consideration-bearing financial account and the other
financial account, to cover the transaction-card purchases,
transferring funds from one of the multiple sources of payment to
cover the transaction-card purchases and accounting for the
transferred funds relative to the available deferred-debit spending
balance, and increasing, at least by an amount corresponding to the
transferred funds, the available deferred-debit spending balance
for a new billing cycle.
16. The computer-based method of claim 15, wherein increasing
includes resetting the available deferred-debit spending balance to
a previously-used level.
17. The computer-based method of claim 15, wherein increasing
including increasing the available deferred-debit spending balance
near the end of the period of time by resetting the available
deferred-debit spending balance to a previous level.
18. The computer-based method of claim 15, further including
resetting the available deferred-debit spending balance to a
previous level, before the funds are transferred, and wherein the
consideration-bearing financial account includes invested
funds.
19. The computer-based method of claim 15, further including
resetting the available deferred-debit spending balance to a
previous level, and thereafter to provide the opportunity for the
user of the consideration-bearing financial account to designate,
and also further including transferring funds in response to the
user of the consideration-bearing financial account designating one
of multiple sources of payment.
20. A computer-based system for managing transactions involving
transaction cards issued to respective users relative to their
status at a financial institution at which the users hold a
consideration-bearing financial account that contains deposited
user funds, the system including a computer that is configured and
programmed to store data representing a deposited balance of funds
attributed to a consideration-bearing financial account held by a
user at the financial institution; defer debits, for purchases made
using the transaction card, against the financial account;
establish a purchase limit, for the deferred debits, based on a
transaction balance of the financial account and a deferred-debit
limit; reduce the purchase limit, in response to a change in the
transaction balance of the financial account relative to the
deferred-debit limit; provide an opportunity for the user to
designate one of multiple sources of payment, including the
consideration-bearing financial account and another financial
account, from which funds may be transferred to increase the
balance of funds and cover the deferred debits accrued against the
financial account by purchases made using the transaction card; and
track purchases against the transaction card as a function of the
purchase limit and of unpaid purchases against the transaction
card.
21. The computer-based method of claim 15, wherein the
consideration-bearing financial account includes invested
funds.
22. The computer-based method of claim 15, wherein the
consideration-bearing financial account includes funds managed by a
trust-type company.
23. The computer-based method of claim 15, further including
providing an interest credit to the user of the
consideration-bearing financial account based upon interest earned
on funds for transaction-card debits that are deferred, thereby
advantaging the user by deferring the debits while earning interest
based on the funds in the account during the billing cycle.
24. The computer-based method of claim 15, wherein the step of
increasing the available deferred-debit spending balance includes
automatically transferring the funds irrespective of whether the
user of the consideration-bearing financial account designates one
of multiple sources of payment.
25. A computer-based method for managing transactions involving
transaction cards issued to respective users relative to their
status at a financial institution at which the users hold a
consideration-bearing financial account that contains deposited
user funds, the method executed by a computer that performs the
steps of storing data representing a deposited balance of funds
attributed to a consideration-bearing financial account held by a
user at the financial institution; deferring debits, for purchases
made using the transaction card, against the financial account;
establishing a purchase limit, for the deferred debits, based on a
transaction balance of the financial account and a deferred-debit
limit; reducing the purchase limit, in response to a change in the
transaction balance of the financial account relative to the
deferred-debit limit; providing an opportunity for the user to
designate one of multiple sources of payment, including the
consideration-bearing financial account and another financial
account, from which funds may be transferred to increase the
balance of funds and cover the deferred debits accrued against the
financial account by purchases made using the transaction card; and
tracking purchases against the transaction card as a function of
the purchase limit and of unpaid purchases against the transaction
card.
26. The method of claim 25, wherein the computer performs the steps
of, at the end of a billing cycle, resetting the purchase limit to
the deferred-debit limit and initiating a payment period, and the
computer performs the step of deferring debits by deferring debits
against the account until the end of the initiated payment period,
after the purchase limit has been reset, and upon expiration of the
payment period, debiting the financial account to cover the
deferred debits.
27. The method of claim 25, wherein the computer performs the steps
of authorizing the purchases; deferring debits by issuing a payment
to cover purchases against the transaction card during a billing
cycle, and tracking purchases by storing data to reflect funds
attributed to the purchases as deferred debit funds without
debiting the funds against the financial account during the billing
cycle.
28. The method of claim 25, wherein the computer performs the steps
of storing data by storing data representing an amount of funds
held in the trust account, and establishing a purchase limit by
establishing the limit based a transaction balance of the trust
account and the deferred-debit limit.
29. The method of claim 25, wherein the computer performs the steps
of storing data by storing data representing an amount of funds
held in the trust account, and establishing a purchase limit by
establishing the limit based upon a status of the trust account and
the deferred-debit limit.
30. The method of claim 25, wherein the computer performs the steps
of storing the data by storing data representing an amount of funds
held in the investment account, establishing the purchase limit by
establishing the limit based upon a transaction balance of the
investment account and the deferred-debit limit, and reducing the
purchase limit by reducing the limit based upon a status of the
investment account and an amount of deferred debits for a billing
cycle.
31. The method of claim 25, wherein the computer performs the steps
of storing the data by storing data representing an amount of funds
held in the investment account, establishing the purchase limit by
establishing the limit based upon a transaction balance of the
investment account and the deferred-debit limit, reducing the
purchase limit by reducing the limit based upon a status of the
investment account and an amount of deferred debits for a billing
cycle, determining an accrued interest amount based upon the
balance of funds held in the investment account, including an
amount of the deferred debit, and increasing the balance of funds
in the investment account based upon the determined accrued
interest amount.
32. The method of claim 25, wherein the consideration-bearing
financial account includes investment funds.
33. The method of claim 25, wherein the computer performs the
further step of receiving notification of transferred funds from
the consideration-bearing financial account.
34. The method of claim 25, wherein the computer performs the
further step of receiving notification of funds being transferred,
for deposit in the consideration-bearing financial account, from
another financial institution.
35. A computer-based system for managing transactions involving
transaction cards issued to respective users relative to their
status at a financial institution at which the users hold a
consideration-bearing financial account that contains deposited
user funds, the system comprising: means for storing data
representing a deposited balance of funds attributed to a
consideration-bearing financial account held by a user at the
financial institution; means for deferring debits, for purchases
made using the transaction card, against the financial account;
means for establishing a purchase limit, for the deferred debits,
based on a transaction balance of the financial account and a
deferred-debit limit; means for reducing the purchase limit, in
response to a change in the transaction balance of the financial
account relative to the deferred-debit limit; means for providing
an opportunity for the user to designate one of multiple sources of
payment, including the consideration-bearing financial account and
another financial account, from which funds may be transferred to
increase the balance of funds and cover the deferred debits accrued
against the financial account by purchases made using the
transaction card; and means for tracking purchases against the
transaction card as a function of the purchase limit and of unpaid
purchases against the transaction card.
Description
RELATED PATENT DOCUMENTS
[0001] This patent document is a continuation of U.S. patent
application Ser. No. 12/140,346 filed on Jun. 17, 2008, entitled
"Transaction Card System and Approach," now U.S. Pat. No. ______,
which is a continuation of U.S. patent application Ser. No.
11/019,651 filed on Dec. 21, 2004, and now U.S. Pat. No. 7,398,919;
which is a continuation-in-part of U.S. patent application Ser. No.
09/614,270 filed on Jul. 12, 2000 and entitled "Debit Card Billing
System;" each of these patent documents is fully incorporated
herein by reference and for subject matter common thereto, priority
is claimed to the earliest of these patent documents under 35
U.S.C. .sctn. 120.
FIELD OF THE INVENTION
[0002] The present invention relates to a system and approach for
debit-card transaction purchases with deferred billing.
BACKGROUND OF THE INVENTION
[0003] Modern consumers have become accustomed to the safety and
convenience of making purchase transactions at remote points of
sale using credit cards instead of cash. Credit cards allow a
consumer to make purchases on credit accounts in which a credit
card issuing institution records purchases to a consumer's account
and then sends a monthly billing statement to the consumer. If the
consumer elects not to pay off the entire balance of the account at
the end of the billing cycle, then the credit card issuing
institution typically collects interest on the outstanding balance
on the account.
[0004] In response to the success of credit cards, banking
institutions such as--banks and credit unions have developed debit
cards which can be used just like credit cards to make purchases.
However, unlike credit cards, the purchases are immediately posted
to the consumer's checking account as if the consumer had written a
check. Therefore, the consumer is not required to pay a monthly
statement because the funds to cover the purchase are taken
immediately and directly from the consumer's checking account.
[0005] Debit card accounts have drawbacks when compared to normal
credit card accounts. There may be more than one cardholder drawing
on an account such as in a joint checking account. With present
debit account systems, using two debit cards for one account can
result in overdrafts when both users unknowingly make debit
transactions during the same time period. Because both cards draw
upon the same account just like checks, two users may inadvertently
draw upon the same funds resulting in an overdraft.
[0006] In addition, the typical debit account user loses interest
compared to a credit card user. Because debit card transactions are
posted to the checking account in the same way as checks, a user
can expect the checking account to be drawn upon within a few days
of the debit transaction. Credit card accounts, on the other hand,
allow the user to keep funds in an interest bearing account until
the end of a billing cycle before they are needed to pay the credit
card bill. By waiting until the end of the month to pay a credit
card bill, the credit card user receives interest on the funds for
the remaining period of the billing cycle. Current debit card
systems employed by banks, however, immediately debit the checking
account just like a check would be debited. Therefore, a current
debit card user does not receive the added interest he might have
gained by keeping the funds in the interest bearing account for the
remainder of a billing period.
SUMMARY OF THE INVENTION
[0007] The present invention is directed to overcoming the
above-mentioned challenges and others, including those related to
the types of applications discussed above. These and other aspects
of the present invention are exemplified in a number of illustrated
implementations and applications, some of which are shown in the
figures and characterized in the claims that follow.
[0008] An example embodiment of the present invention is directed
to a method and system for managing an account for use by a banking
institution which provides checking or savings account services. An
account user is provided with a debit card which can be used to
make debit transactions, each transaction being recorded by the
bank but not billed to the account until after a billing cycle
elapses and after the account user has been issued a billing cycle
statement showing all credit transactions. The system automatically
debits the account for all debit transactions made during the
billing cycle after a payment period elapses following issuance of
the statement.
[0009] The system has a number of embodiments and applications
suitable for use in various billing systems. First, the system
combines into one card the ability to make automated banking
transactions on an account with the ability to make debit purchases
against the account. The present system actually defers the time of
payment as a credit card account would, but combines this ability
with the convenience of a banking card tied to a particular
financial account.
[0010] Various embodiments also address a problem associated with
joint accounts. All debit transactions made with the transaction
cards issued on the financial account are stored in the system
until the end of a billing cycle without being debited against the
account. At the end of the billing cycle, all the debit
transactions for the billing cycle are reported to the debit card
account holders. The debit card account holders are able to review
the debit transactions and have the opportunity to supply
additional funds or alternative sources of payment other than a
direct debit to the account. In this way, joint checking account
holders can avoid inadvertent overdrafts.
[0011] In addition, through the present system, the debit card
account holder receives the advantage of accruing interest on funds
which remain in the account during the time that elapses between
the debit transaction and the actual debiting of the account for
the transaction. Because the system defers debiting the account for
the debit transactions until after the billing cycle and after a
payment period following the billing cycle, the debit card account
holder is able to capture the interest earned on funds which remain
in the account during the deferred period.
[0012] The above summary is not intended to describe each
illustrated embodiment or every implementation of the present
invention. The figures, detailed description and claims that follow
more particularly exemplify these embodiments.
BRIEF DESCRIPTION OF THE DRAWINGS
[0013] The invention may be more completely understood in
consideration of the detailed description of various embodiments of
the invention that follows in connection with the accompanying
drawings, in which:
[0014] FIG. 1 is a schematic flow chart of a debit transaction
authorization process in accordance with an example an embodiment
of the present invention.
[0015] FIG. 2 is a schematic flow chart of a debit transaction
settlement process in accordance with another example embodiment of
the present invention.
[0016] FIG. 3 is a schematic flow chart of the statement and debit
process in accordance with another example embodiment of the
present invention.
[0017] FIG. 4 is a schematic diagram of the components of a
computer system, according to another example of the present
invention.
[0018] FIG. 5 is a schematic diagram of a networked computer
managing system, according to another example of the present
invention.
[0019] While the invention is amenable to various modifications and
alternative forms, specifics thereof have been shown by way of
example in the drawings and will be described in detail. It should
be understood, however, that the intention is not to limit the
invention to the particular embodiments described.
DETAILED DESCRIPTION
[0020] The present invention is believed to be applicable to a
variety of different types of devices, processes and approaches,
and has been found to be particularly suited for financial
transactions involving a consideration-bearing banking account.
[0021] According to an example embodiment, a system for managing a
financial institution account, such as a checking or savings
account, combines the monthly billing schedule of a credit card
account with the automatic debiting of a debit account to provide
an account holder with greater flexibility and control over cash
management. The system includes a transaction card which the
account holder can use to make automated banking transactions as
well as debit transactions. Greater flexibility as well as
convenience is afforded the debit card account holder by the system
in that debit transaction information is accumulated and stored for
a billing cycle period without being posted against the funds in
the account. At the end of the billing cycle a report or statement
of debit transactions is produced for the debit card account
holder's review. After a predetermined payment period elapses after
producing the statement is the account automatically debited for
all debit transactions of the billing cycle.
[0022] FIGS. 1 and 2 show a debit transaction authorization process
and a debit transaction settlement process respectively. In a
typical debit transaction, there are a number of parties involved.
The transaction involves a consumer or debit card account holder
with a debit card 2, a merchant with a point of sale processor 4, a
debit card issuing financial institution 10 which issued the debit
card for use with the consumer's account, a credit institution 6
such as VISA or MASTERCARD, and often an intermediary clearinghouse
or debit processing service 8. The debit card issuing financial
institution 10 may be any bank, credit union or similar institution
at which the consumer or account holder has opened a checking,
savings, or other financial account.
[0023] A debit transaction occurs in two phases or steps.
Typically, the first phase is an authorization phase. The
authorization process is shown in FIG. 1. In the authorization
phase the merchant 4 obtains verification and authorization from
the debit card issuing financial institution 10 that the debit card
2 is valid and that the user has not exhausted a deferred purchase
periodic limit. The authorization phase occurs before the merchant
4 allows the consumer to make the purchase. The second phase is
typically a settlement phase. The settlement phase is shown in FIG.
2. In the settlement phase funds are eventually transferred from
the consumer's account at the financial institution to the
merchant.
[0024] In the authorization phase of the present system, the debit
card user first presents a debit card 2 to the merchant 4 in order
to make a purchase. The merchant swipes the card through a point of
sale processor which reads account information encoded on card 2
and combines it with information such as the date and the amount of
the purchase and merchant identification. The point of sale system
transmits the debit transaction information to the credit
institution 6 identified by the card 2 such as VISA.
[0025] The credit institution 6 then identifies the card issuing
financial institution 10 and transmits the debit transaction
information to the card issuing financial institution 10 either
directly or through a debit processing service 8. The information
is received by the card issuing financial institution 10 by a
managing computer system 50 as shown in FIG. 4. The information may
be received by the computer system via a receiver system 40 which
typically employs high speed dedicated communication lines. After
identifying an account corresponding to the debit card 2 being
used, the managing computer system 50 runs verifications against
the identified account to determine whether the debit transaction
should be authorized. The account status is verified 12 as a valid,
open account that has not been put on hold. The amount of the
purchase is checked against a deferred debit purchase monthly
spending limit 14. The deferred debit purchase spending limit is
the amount in debit purchases the debit card account holder is
permitted to make each month and may be, for example, between
$1,000 and $20,000.
[0026] Upon approval by the card issuing financial institution 10,
an authorization record is stored 16 in the managing computer
system's memory system 44, noting the debit transaction
information. An authorization signal is then sent back from the
card issuing financial institution 10 through the credit
institution 6 to the merchant's point of sale processor 4 where the
debit transaction is authorized.
[0027] The settlement phase begins when the merchant 4 or the
merchant's bank 20 requests payment from the credit institution 6
to cover the debit transactions authorized by the card issuing
financial institution 10. Typically, at the end of a business day a
merchant 4 will total the debit transactions performed and request
payment from the credit institution 6. The credit institution 6
pays the merchant 4 and demands payment from the card issuing
financial institution 10 by issuing a schedule or posting file 22
of all the transactions authorized by the card issuing financial
institution 10. When the card issuing financial institution 10
receives the posting file, the financial institution's managing
computer system 50 verifies each debit transaction listed against
the authorization records stored when the authorization was given
24. Upon verification, the card issuing institution 10 makes
payment to the credit institution 6. Shortly thereafter, in prior
art systems, and typically through on-line or batch processing, the
managing computer system debits the consumer's checking account for
the amount of the transaction and eliminates the authorization
record, thereby completing the debit transaction.
[0028] The card issuing financial institution's managing computer
system 50 is configured so that, during the settlement phase, after
the receipt of the posting file 22, and after the card issuing
financial institution 10 makes payment to the credit institution 6,
the managing computer system 50 makes a deferred transaction
billing record or history 26 without debiting the amount of the
transaction against the consumer's account. The spending limit
balance available is then updated 28 to reflect the purchase
made.
[0029] A managing computer system 50 configured according to an
embodiment the present invention, to accumulate a billing record of
all debit transactions for a billing cycle, typically one month,
without debiting the consumer's account. The debiting of the
account is deferred. In this manner a deferred transaction history
is maintained for each account. As shown in FIG. 3, at the end of
the billing cycle, the managing computer system 50 recalls the
billing history and issues a statement which includes a notice
itemizing and totaling the deferred debit transaction history for
the consumer's account. The statement shows an accrued debit
balance for the billing cycle. Once the statement is issued to the
debit card account holder 30, the billing cycle spending limit is
reset 32, allowing the debit card account holder to make additional
deferred purchases for a new billing cycle. The statement may be
made either through conventional hard copy reports or through
electronic means. For example, the statement may be made available
to the consumer by electronically posting the statement information
at a secure site such as an internet site accessible by the account
holder's personal computer 56, or through an automated telephone
service.
[0030] The managing computer system 50 includes a memory system 44.
FIG. 5 shows how the memory system 44 may be divided into databases
that may include an account database 60, a deferred history
database 62, and an authorization record database 64. A record of
authorization is made in the authorization record database 64
during the authorization phase as described above. The record may
then be recalled from the authorization record database 64 and a
new record made in the deferred history database 62 during the
settlement phase.
[0031] After providing a statement to the debit card account
holder, the managing computer system initiates a payment period
countdown 34. During the payment period countdown the debit card
account holder has the opportunity to designate or provide sources
of payment to cover the debit transactions by supplementing the
funds of the account itself or by designating another account. The
account holder may transfer funds from a credit line or from funds
outside the debit card issuing financial institution. The transfer
may be accomplished by phone or even electronically. Any payments
made during the payment period are deducted from the accrued debit
balance 36 which may be recorded in a deferred history database.
When the payment period expires, the managing computer system
automatically debits the debit card account or another designated
account for the accrued debit balance 38. In one preferred
embodiment the payment period is a period of fifteen days. The
debiting may be accomplished by recalling the deferred debit
balance 38 from the deferred history database 62 and debiting an
account database 60 as shown in FIG. 5.
[0032] The system may also be configured so that the debit cards
may be used in automated teller machines 54 to make automated
banking transactions such as deposits and withdrawals. The managing
computer system 50 according to the present invention may be
configured to distinguish automated banking transactions from debit
transactions wherein only the debiting of the debit transactions is
deferred during the payment period. Accordingly, depending upon
system configurations, automated banking transactions either may be
posted to the account during on-line or batch processing, or they
may be deferred according to the present invention.
[0033] By combining debit card purchasing and deferred billing
utilizing a single transaction card to accomplish both debit
transactions as well as automated banking, a debit card account
holder can reduce the number of cards needed to perform all of
these functions. Reducing the number of cards is not only more
convenient for the debit card account holder but also decreases the
risk of having multiple cards lost or stolen.
[0034] In summary, the present invention is directed to a deferred
billing debit card system and method for managing an account at a
financial institution. The system and method can be used in
conjunction with a transaction card 2 which is encoded with
computer-readable information identifying the financial institution
10 and the account at the financial institution 10. An account
holder uses the transaction card 2 to make debit purchases and
transactions. The system includes a receiver system 40 which may
include high speed dedicated phone or communication lines for
receiving electronically transmitted debit transaction information
generated by the account holder's use of the transaction card 2 in
making a debit transaction. The debit transaction information is
stored in a computer-readable memory system 44. A computer
processor system 42 recalls the debit transaction information from
the memory system 44 and aggregates the debit transaction
information in a statement showing an accrued debit balance 30 for
a billing cycle. The computer processor system 42 automatically
debits the account for the accrued debit balance 38 but not until
after the end of the billing cycle and after the account holder is
given an opportunity during a payment period 34 to provide a source
of payment to cover all or part of the accrued debit balance.
[0035] The present invention may be configured to include an output
system 46 by which the billing system makes the statement available
to the account holder. The output system 46 may include a printer
system for generating hard copy statements to be sent by mail to
the account holder or the statement may be made available by
electronic means via electronic mail or posting on a secure
internet site.
[0036] The present invention may also be configured to work in
conjunction with a transaction card that has also been encoded to
be capable of use in automated banking transactions.
[0037] The present invention is to be limited only in accordance
with the scope of the appended claims, since persons skilled in the
art may devise other embodiments still within the limits of the
claims. For example, the features described in the present
application are not limited to a bank but apply to other financial
institutions such as a credit union, a trust company, a savings and
loan association, or a savings association. Furthermore, the
present systems and methods may be applied to financial institution
accounts beyond checking accounts, such as by designating payment
of accumulated debit transactions against a savings account.
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