U.S. patent application number 14/028040 was filed with the patent office on 2014-03-27 for dynamic bin allocation for payment card transactions.
This patent application is currently assigned to StoneEagle Services, Inc.. The applicant listed for this patent is StoneEagle Services, Inc.. Invention is credited to Robert M. Allen, Richard Alan Maxwell.
Application Number | 20140089183 14/028040 |
Document ID | / |
Family ID | 50339852 |
Filed Date | 2014-03-27 |
United States Patent
Application |
20140089183 |
Kind Code |
A1 |
Allen; Robert M. ; et
al. |
March 27, 2014 |
DYNAMIC BIN ALLOCATION FOR PAYMENT CARD TRANSACTIONS
Abstract
Preauthorized payments may be made to service providers, repair
shops and even vendors serving employees on business trips through
credit card processing. The approved payment amount is authorized
on a virtually created payment card which is then sent to the
payee. These transactions incur interchange fees for the card
processing. Therefore, unlike a check or EFT payment, the payee
receives the approved payment less interchange fees. Interchange
rates vary based on the payment card product offered by an issuing
bank in addition to factors relating to how the payment card is
processed. The current invention is a method of automatically
generating a virtual payment card and/or processing the card in a
manner to achieve a target interchange fee.
Inventors: |
Allen; Robert M.;
(Richardson, TX) ; Maxwell; Richard Alan; (Plano,
TX) |
|
Applicant: |
Name |
City |
State |
Country |
Type |
StoneEagle Services, Inc. |
Richardson |
TX |
US |
|
|
Assignee: |
StoneEagle Services, Inc.
Richardson
TX
|
Family ID: |
50339852 |
Appl. No.: |
14/028040 |
Filed: |
September 16, 2013 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
|
|
61704765 |
Sep 24, 2012 |
|
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|
Current U.S.
Class: |
705/41 |
Current CPC
Class: |
G06Q 20/24 20130101;
G06Q 20/409 20130101; G06Q 20/02 20130101; G06Q 20/40 20130101 |
Class at
Publication: |
705/41 |
International
Class: |
G06Q 20/02 20060101
G06Q020/02; G06Q 20/40 20060101 G06Q020/40 |
Claims
1. A computer implemented method for virtual card payment, the
method comprising: electronically receiving on a computing device
an authorized amount value from a payor to pay a designated payee;
retrieving from an electronic storage device a target interchange
rate for payment to the designated payee; automatically selecting a
bank identification number account from an issuer bank, the bank
identification number account having an effective interchange rate
based on the inclusion or exclusion of interchange factors selected
from the group consisting of card not present, enhanced data, debit
personal identification number, address verification service,
security code and delayed settlement; electronically generating a
virtual payment card with the selected bank identification number
account wherein the effective bank identification number
interchange rate adjusted in accordance with the target interchange
rate by the inclusion or exclusion of the interchange factors; and
authorizing the virtual payment card to the authorized amount value
whereby processing of the virtual payment card for the authorized
amount on behalf of the designated payee incurs the effective
interchange rate.
2. The method of claim 1 wherein the virtual payment card is
electronically transmitted directly to a card acquirer for the
designated payee for processing.
3. The method of claim 2 further comprising the steps of: receiving
remittance advice related to the claim charges incurred by the
designated payee, the remittance advice indicating which activities
are payable under a claims policy; and transmitting the remittance
advice to the designated payee with a confirmation that payment has
already been made on its behalf directly to the card acquirer.
4. The method of claim 1 wherein the target interchange rate is
based on the authorized amount value.
5. The method of claim 1 wherein the target interchange rate is
based on the payment history to the designated payee.
6. The method of claim 1 wherein the target interchange rate is
based on the preference of an entity selected from the group
consisting of a third party administrator, a carrier for the claims
policy, and the designated payee.
7. A computer implemented method for virtual card payment, the
method comprising: electronically receiving on a computing device
an authorized amount value from a payor to pay a designated payee;
retrieving from an electronic storage device a target interchange
rate for payment to the designated payee; accessing a plurality of
bank identification number accounts at one or more issuer banks,
each account having a predefined interchange rate; automatically
selecting a single bank identification number account from the
plurality of bank identification number accounts, the single embank
identification number account's interchange rate in accordance to
the target interchange rate; generating a virtual payment card with
the selected, single bank identification number account and
authorizing it to the authorized amount value; and sending the
virtual payment card to the designated payee in payment of the
authorized amount.
8. The method of claim 7 wherein the target interchange rate is
based on the authorized amount value.
9. The method of claim 7 wherein the target interchange rate is
based on the payment history to the designated payee.
10. The method of claim 7 wherein the target interchange rate is
based on the preference of an entity selected from the group
consisting of a third party administrator, a carrier for the claims
policy, and the designated payee.
11. A computer implemented method for virtual card payment, the
method comprising: electronically receiving on a computing device
remittance advice related to charges incurred by a designated
payee, the remittance advice generated by a third party
administrator that determines which activities are payable under an
claims policy; retrieving from an electronic storage device an
authorized amount value from the third party administrator to pay
at least a portion of the charges associated with the remittance
advice; setting a target interchange rate for the payment to the
designated payee; automatically selecting a bank identification
number account from an issuer bank, the bank identification number
account having an effective interchange rate based on the inclusion
or exclusion of interchange factors selected from the group
consisting of card not present, enhanced data, debit personal
identification number, address verification service, security code
and delayed settlement; electronically generating a virtual payment
card with the selected, single bank identification number account
wherein the effective bank identification number interchange rate
is set closest to the target interchange rate by the inclusion or
exclusion of the interchange factors; and authorizing the virtual
payment card to the authorized amount value whereby processing of
the virtual payment card for the authorized amount on behalf of the
designated payee incurs the effective interchange rate; and
electronically transmitting the virtual payment card data to a card
acquirer for processing the authorized amount.
12. The method of claim 11 wherein the target interchange rate is
based on the authorized amount value.
13. The method of claim 11 wherein the target interchange rate is
based on the payment history to the designated payee.
14. The method of claim 11 wherein the target interchange rate is
based on the preference of an entity selected from the group
consisting of a third party administrator, a carrier for the claims
policy, and the designated payee.
Description
CROSS-REFERENCE TO RELATED APPLICATIONS
[0001] This nonprovisional application is a continuation of and
claims priority to provisional application No. 61/704,765 entitled
"Payment System and Method," filed September 24, 2012 by the same
inventor.
BACKGROUND OF THE INVENTION
[0002] 1. Field of the Invention
[0003] This invention relates to facilitating payments by a third
party. More specifically, it relates to automatically adjusting the
effective interchange rate incurred for pre-approved or
pre-authorized card payments to payees.
[0004] 2. Brief Description of the Related Art
[0005] Interchange is a fee paid between banks for the acceptance
of card-based transactions (such as VISA and MASTERCARD charges).
Usually it is a fee that a merchant's bank (the "acquiring bank")
pays a customer's bank (the "issuing bank") however there are
instances where the interchange fee is paid from the issuer to
acquirer. This is sometimes called reverse interchange.
[0006] In a credit card or debit card transaction, the card-issuing
bank in a payment transaction deducts the interchange fee from the
amount it pays the acquiring bank that handles a credit or debit
card transaction for a merchant. The acquiring bank then pays the
merchant the amount of the transaction minus both the interchange
fee and an additional, usually smaller fee for the acquiring bank
or ISO, which is often referred to as a discount rate, an add-on
rate, or "passthru."
[0007] Interchange fees are set by the credit card networks, and
are the largest component of the various fees that most merchants
pay for the privilege of accepting credit cards, representing 70%
to 90% of these fees. Interchange fees have a complex pricing
structure, which is based on the card brand, regions or locations,
the type of credit or debit card, the type and size of the
accepting merchant, and the type of transaction (e.g. online,
in-store, telephone sale, whether the card is present for the
transaction, etc.). Further complicating the rate schedules,
interchange fees are often a flat fee plus a percentage of the
total purchase price (including taxes). In the United States, the
fee averages approximately 2% of transaction value and are set by
the payment networks such as VISA and MASTERCARD.
[0008] Generally, the bulk of the interchange fee goes to the
issuing bank. Issuing banks' interchange fees are extracted from
the amount collected by the merchants when they submit credit or
debit transactions for payment through their acquiring banks. Banks
do not expect to make a significant amount of money from late fees
and interest charges from creditworthy customers that pay their
monthly bill in full. Rather, the banks make their profits on the
interchange fee charged to merchants.
[0009] Interchange rates are set at differing percentages for a
number of reasons. A premium credit card that offers rewards
generally will have a higher interchange rate than do standard
cards. Transactions made with credit cards generally have higher
rates than those with signature debit cards, whose rates are often
higher than PIN debit card transactions.
[0010] Card-not-present sales that are not conducted in person,
such as by phone or on the Internet, generally are subject to
higher interchange rates. Interchange is also set to encourage
issuance and to attract issuing banks to issue a particular brand.
Higher interchange is often a method to encourage issuance of their
particular brand.
INTERCHANGE EXAMPLE
[0011] Consider a consumer making a $100 purchase with a credit
card. For that $100 item, the retailer would get approximately $98.
The remaining $2, known as the merchant discount and fees, gets
divided up. About $1.75 would go to the card issuing bank (defined
as interchange), $0.18 would go to Visa or MasterCard association
(defined as assessments), and the remaining $0.07 would go to the
retailer's merchant account provider.
[0012] Card numbers are found on payment cards, such as credit
cards and debit cards, as well as stored-value cards, gift cards
and other similar cards. Some card issuers refers to the card
number as the primary account number (PAN). They have a certain
level of internal structure and share a common numbering scheme.
Bank card numbers are allocated in accordance with ISO/IEC 7812.
The bank card number merely identifies the card, which is then
electronically associated by the issuing organization with one of
its customers and then to the customer's designated bank
account.
[0013] In the case of stored-value type cards, there is no
necessary association with a particular customer. An ISO/IEC 7812
card number is typically 16 digits in length, and consists of: (a)
a six-digit Issuer Identification Number (IIN) (also called the
"Bank Identification Number" (BIN)) the first digit of which is the
Major Industry Identifier (MII); (b) a variable length (up to 12
digits) individual account identifier; and (c) a single check digit
calculated using the Luhn algorithm.
[0014] The first digit of a credit card number is the MIL which
represents the category of entity which issued the card. For
example, VISA, and MASTERCARD are in the banking and financial
category and each use an MII integer of 4 and 5 respectively.
[0015] Together, first six digits of a card number (including the
initial MII digit) are known as the issuer identification number
(IIN) or the BIN. These identify the institution that issued the
card to the card holder. The IIN database and membership is managed
by the American National Standards Institute (ANSI) and is updated
monthly. ANSI is responsible for allocating IIN ranges to the
issuing networks. Both VISA and MASTERCARD publish tables that set
interchange reimbursement fees.
[0016] When payments are made through typical card transactions,
the merchant is generally subject to the interchange rate of the
card type accepted. Therefore, when a product or service is
purchased by credit card, there is typically some uncertainty as to
the exact amount the merchant will net because the interchange is
variable.
[0017] An industry exists that pays a large number of benefit
claims (e.g., warranty, medical, dental and the like) through
virtual payment cards. This industry provides a faster means of
payment to merchants with greater efficiency than traditional check
payments. However, these virtual payments do incur interchange fee
overhead. A long-felt need in the industry exists to dynamically
generate virtual payment cards that meet predefined interchange fee
targets. This need is met by the current invention.
BRIEF SUMMARY OF THE INVENTION
[0018] An embodiment of the invention includes the steps of
receiving an authorized amount value from a third party
administrator (TPA) to pay at least a portion of claim charges made
by a service provider against a claims policy. For example, a
doctor may charge $150 for an X-ray but the patient's insurance
policy will only pay $100 for X-rays. The TPA would authorize
payment of $100 for the claim and also generate a remittance advice
(or explanation of benefits) indicating that $50 of the $150 charge
was not covered under the policy.
[0019] A target interchange rate is then set. This may typically
range from one to four percent of the transaction. Based on the
target interchange rate, a BIN account from an issuer bank is
automatically selected. The BIN account has an effective
interchange rate based on the inclusion or exclusion of six
interchange factors. These factors may include: (1) whether the
card is not present (CNP); (2) whether enhanced data is included in
the transaction; (3) whether a personal identification number (PIN)
was included if the payment card was a debit card type; (4) whether
address verification data (AVS) was included (e.g., billing zip
code); (5) whether the settlement was batched timely or delayed;
and (6) whether a security code was included (e.g., CVC or
CVC2).
[0020] A virtual payment card is then generated with the selected
BIN account wherein the effective BIN interchange rate is adjusted
in accordance with the target interchange rate by the inclusion or
exclusion of the interchange factors. The virtual payment card is
then authorized to the TPA-approved amount value. Processing of the
virtual payment card for the authorized amount on behalf of the
service provider incurs the effective interchange rate.
[0021] For straight-through payment processing, when including or
excluding the interchange factors noted above, the virtual payment
card data is transmitted directly to the acquirer for the service
provider and the remittance advice is separately sent to the
service provider. Alternatively, the card data may be sent to the
service provider concurrently with the remittance advice. This
permits the service provider to refund back some or all of the
straight-through payment if the circumstances of the transaction
warrant.
[0022] In an embodiment of straight-through payment processing, a
buyer initiates payment via a payment instruction file (PIF). The
PIF is sent via a secure connection to the card network's gateway.
A gateway translation engine reviews the PIF and ensures that all
relevant data is present. The file is then forwarded to the
appropriate financial institution for clearing and settlement.
[0023] However, in an alternative embodiment of the invention the
remittance advice and the virtual payment card are sent to the
service provider directly. In this case, a specific BIN product may
be selected close to the target interchange rate without any
variance on the interchange factors. Alternatively, certain factors
such as including or excluding the PIN may help to fine-tune the
effective interchange rate close to the target rate.
[0024] The target interchange rate may be based on the authorized
amount value. For example, if the amount is greater than $1,000, a
lower interchange rate is automatically selected. The interchange
rate may also be associated with the amount on a dollar-to-basis
point scale. The rate may also be set at tiers (e.g., rate A from
$0 to $100, rate B from $100 to $500, etc. . . . ).
[0025] The target interchange rate may also be based on the payment
history to the service provider. For example, to induce the service
provider to accept virtual payment cards the initial interchange
rate may be lowered after $10,000 of payments have been made to the
service provider and again at the $100,000 threshold.
[0026] The target interchange rate may also be set by the service
provider, third party administrator or even the carrier for the
claims policy.
HARDWARE AND SOFTWARE INFRASTRUCTURE EXAMPLES
[0027] The present invention may be embodied on various computing
platforms that perform actions responsive to software-based
instructions. It should be noted that the automation necessary to
select an appropriate BIN account based on targeted interchange
rates and generate a virtual card payment is not feasible without
integrating into an automated computer system. The current
invention anticipates this technological feature would be applied
to hundreds of thousands of transactions every month in a routine
application. The following provides an antecedent basis for the
information technology that may be utilized to enable the
invention.
[0028] The computer readable medium described in the claims below
may be a computer readable signal medium or a computer readable
storage medium. A computer readable storage medium may be, for
example, but not limited to, an electronic, magnetic, optical,
electromagnetic, infrared, or semiconductor system, apparatus, or
device, or any suitable combination of the foregoing. More specific
examples (a non-exhaustive list) of the computer readable storage
medium would include the following: an electrical connection having
one or more wires, a portable computer diskette, a hard disk, a
random access memory (RAM), a read-only memory (ROM), an erasable
programmable read-only memory (EPROM or Flash memory), an optical
fiber, a portable compact disc read-only memory (CD-ROM), an
optical storage device, a magnetic storage device, or any suitable
combination of the foregoing. In the context of this document, a
computer readable storage medium may be any tangible medium that
can contain, or store a program for use by or in connection with an
instruction execution system, apparatus, or device.
[0029] A computer readable signal medium may include a propagated
data signal with computer readable program code embodied therein,
for example, in baseband or as part of a carrier wave. Such a
propagated signal may take any of a variety of forms, including,
but not limited to, electro-magnetic, optical, or any suitable
combination thereof. A computer readable signal medium may be any
computer readable medium that is not a computer readable storage
medium and that can communicate, propagate, or transport a program
for use by or in connection with an instruction execution system,
apparatus, or device.
[0030] Program code embodied on a computer readable medium may be
transmitted using any appropriate medium, including but not limited
to wireless, wire-line, optical fiber cable, radio frequency, etc.,
or any suitable combination of the foregoing. Computer program code
for carrying out operations for aspects of the present invention
may be written in any combination of one or more programming
languages, including an object oriented programming language such
as Java, C#, C++ or the like and conventional procedural
programming languages, such as the "C" programming language or
similar programming languages.
[0031] Aspects of the present invention are described below with
reference to flowchart illustrations and/or block diagrams of
methods, apparatus (systems) and computer program products
according to embodiments of the invention. It will be understood
that each block of the flowchart illustrations and/or block
diagrams, and combinations of blocks in the flowchart illustrations
and/or block diagrams, can be implemented by computer program
instructions. These computer program instructions may be provided
to a processor of a general purpose computer, special purpose
computer, or other programmable data processing apparatus to
produce a machine, such that the instructions, which execute via
the processor of the computer or other programmable data processing
apparatus, create means for implementing the functions/acts
specified in the flowchart and/or block diagram block or blocks.
This invention also anticipates the software implementing the BIN
allocation is embedded into systems such as credit card terminals,
point-of-sale devices,
[0032] These computer program instructions may also be stored in a
computer readable medium that can direct a computer, other
programmable data processing apparatus, or other devices to
function in a particular manner, such that the instructions stored
in the computer readable medium produce an article of manufacture
including instructions which implement the function/act specified
in the flowchart and/or block diagram block or blocks.
[0033] The computer program instructions may also be loaded onto a
computer, other programmable data processing apparatus, or other
devices to cause a series of operational steps to be performed on
the computer, other programmable apparatus or other devices to
produce a computer implemented process such that the instructions
which execute on the computer or other programmable apparatus
provide processes for implementing the functions/acts specified in
the flowchart and/or block diagram block or blocks.
BRIEF DESCRIPTION OF THE DRAWINGS
[0034] For a fuller understanding of the invention, reference
should be made to the following detailed description, taken in
connection with the accompanying drawings, in which:
[0035] FIG. 1 is a diagrammatic view of a typical credit card
transaction process.
[0036] FIG. 2 is a diagrammatic view of a traditional payment of a
benefit claim by check.
[0037] FIG. 3 is a diagrammatic view of payment of a benefit claim
by a virtual payment card.
[0038] FIG. 4 is a diagrammatic view of an embodiment of the
invention wherein a plurality of BINs are available to meet a
target interchange rate. The virtual payment card is transmitted
with remittance advice to a service provider.
[0039] FIG. 5 is a diagrammatic view of an embodiment of the
invention wherein the virtual payment card is a debit card type. It
is transmitted with remittance advice to a service provider absent
a PIN code.
[0040] FIG. 6 is a diagrammatic view of an embodiment of the
invention wherein the acquirer for the service provider is paid
directly but without address verification services (AVS) data
included.
[0041] FIG. 7 is a diagrammatic view of an embodiment of the
invention wherein the payment is presented to the acquirer as a
card not present (CNP) straight through transaction and without AVS
data.
[0042] FIG. 8 is a diagrammatic view of an embodiment of the
invention wherein the target interchange rate is set by one or more
factors.
[0043] FIG. 9 is a diagrammatic view of an embodiment of the
invention as applied to the travel industry.
[0044] FIG. 10 is a diagrammatic view of an embodiment of the
invention as applied to the vehicle repair industry.
DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT
[0045] A typical payment card transaction is denoted as a whole in
FIG. 1 by the reference numeral 10. Cardholder 60 purchases goods
or services from merchant 20. Merchant 20 effectively "sells" the
transaction 70 to an acquirer bank 30 and is reimbursed the amount
of the sales ticket less a discount fee. Acquirer 30 then submits
90 the transaction to the issuing bank 50 for payment through an
interchange and settlement system 80 provided by card network 40.
Issuing bank 50 pays 110 acquirer 30 through the card settlement
system 100. Finally, cardholder 60 repays 120 issuing bank 50 for
the goods or services originally purchased from merchant 20.
[0046] In FIG. 2, insured 65 consumes services of health care
provider 120. Provider 120 submits a benefit claim to a third party
administrator 130 against an insurance policy held by insured 65.
Plan sponsor of the insured 140 funds account 150 which is used by
administrator 130 to generate a check and an explanation of
benefits (EOB). The check and email are mailed back to provider in
payment of the services.
[0047] In FIG. 3, administrator 130 provides remittance advice
which is merged 170 with virtual card account data generated by
card processor 160 and sent to provider 120. The virtual card data
typically includes the card number, CVV (security) code and an
expiration date. This process is described in U.S. Pat. Nos.
7,792,686 and RE43904 and is incorporated herein by reference.
[0048] In FIG. 4, card processor 160 does not arbitrarily select a
BIN for the virtual card, but rather accesses BIN database 180. In
the figure, three exemplary BIN products are provided: (1) product
190; (2) product 200; and (3) product 210. These products have
interchange rates varying between 3.25%+$0.10 to 1.82%+$0.00. In
this example, assume the target interchange rate for provider 120
is 250 basis points. Thus, product 200 would be selected as its
2.42% rate is the closest to 250 basis points. Card processor 160
uses product 200 from BIN database 180 and generates a virtual
payment card which is merged 170 with remittance advice and sent to
provider 120.
[0049] In FIG. 5, an alternative embodiment of the invention is
shown that permits the interchange rate to be more finely tuned.
Assume the target interchange rate is now 284 basis points. This is
between products 190 and 200 in BIN database 180. In this case,
card processor 160 selects the lower interchange product 200 which
is 242 basis points. However, card processor 160 excludes an
interchange factor 220 from its virtual card payment to provider
120. This results in an interchange "downgrade" which increases the
effective interchange rate to 280 basis points thereby more closely
meeting the target interchange rate.
[0050] An alternative embodiment of the invention shown in FIG. 6
utilizes push-through payments which are made from the card
processor 160 directly to the card acquirer 30 for provider 120.
Push-through payments gives the card processor 160 greater control
in which interchange factors are included or excluded. These types
of payments are described in U.S. Pat. No. 8,249,893 which is
incorporated herein by reference. Referencing FIG. 6, card
processor 160 selects card product 190, 200 or 210 but desires to
effect an interchange downgrade. Card processor 160 transmits
virtual payment card data to acquirer 30 but leaves out address
verification system (AVS) data. This increases the interchange rate
to the target rate desired.
[0051] What if the interchange rate needs to be increased even
more? Card processor 160 in FIG. 7 send the virtual payment card
data lacking AVS data as in FIG. 6 but now also sends the
information as a card not present (CNP) transaction. This results
in an additional interchange downgrade.
[0052] In FIG. 8 card processor 160 sets target interchange rate
220 by evaluating one or more factors including, but not limited
to, the payment amount 230, provider history 240 and entity
preferences 250. Entity preferences 250 include those of the health
care provider 120, acquirer 30, card processor 160, third party
administrator 130, and plan sponsor 140.
[0053] In FIG. 9, corporate traveler 280 makes a lodging request to
stay at hotel 270. Travel administrator 260 sends an approved
amount and remittance advice to card processor 160. Target
interchange rate 220 is obtained and the appropriate account from
BIN database 180 is used to generate a virtual payment card to pay
hotel 270 on behalf of corporate traveler.
[0054] In FIG. 10, driver 300 experiences a vehicle break-down and
needs service at repair shop 290. The repair is covered under
warranty so repair shop forwards the benefit claim under the
vehicle warranty to third party administrator 130 who sets an
authorized amount for the repair and returns remittance advice to
card processor 160. Card processor automatically generates a
virtual payment card from BIN database 180 and sends payment via a
straight-through transaction to acquirer 30. Acquirer 30 settles
the transactions and makes payment to repair shop 290. Card
processor 160 informs repair shop 290 that payment has directly
been made to acquirer 30 for the vehicle repair.
[0055] An advantage of the invention is that virtual card payment
of claim benefits can be modified to accommodate target interchange
rates. This helps the participants to the transaction to set
interchange rates that cover the cost of processing but also
balance the overhead in receiving card payments by the service
provider. Target interchange rates may be adjusted based on the
services, history, and payment amounts made to the service
provider. Higher interchange rates may be used to amortize billing
system upgrades, support and services without incurring upfront,
out-of-pocket expenses to the service provider.
GLOSSARY OF TERMS
[0056] Acquirer: a bank or financial organization that processes
credit and/or debit card payments for products or services for a
merchant. Also called an acquiring bank, merchant bank or sponsor
bank.
[0057] Authorization: is a process by which a transaction is
approved by the issuer of by the card network on behalf of the
issuer. Permission is given or denied via the acquirer to accept a
specific transaction from the cardholder account. The authorization
indicates the card is valid and that sufficient funds are available
for payment of the requested amount.
[0058] Authorization Approval Code: is a numerical code assigned to
a sales transaction indicating that the sale is authorized.
[0059] AVS: is address verification services. AVS uses the billing
information associated with a card to verify the cardholder's
address.
[0060] Bank Account Information: information used to identify a
specific bank account. This information can include routing
numbers, account data, account numbers and other information used
to identify a bank account.
[0061] BIN: is a six-digit Bank Identification Number assigned to
each federally insured financial institution for the routing of
transactions and other purposes. It is also known as an Issuer
Identification Number (TIN) the first digit of which is the Major
Industry Identifier (MII).
[0062] Card Association: a collective network of both the card
network and the banks that issue cards operable on the network's
infrastructure.
[0063] Card Network: financial networks that administer the credit
and debit card processing. These networks include those known by
the brands VISA, MASTERCARD, AMERICAN EXPRESS, DISCOVER, DINER'S
CLUB, and JCB.
[0064] Card Verification Code (CVV): is numeric security code that
provides extra security against unauthorized use during non-face to
face transactions. CVV codes are three-digit numbers on the back of
VISA and MASTERCARD credit and debit cards. The CVV number helps
guard against the use of data stolen from payment networks by
hackers. Intercepted data will usually comprise the cardholder
name, card number and card expiration date, but not the CVV, which
is generally obtained only by viewing the physical card.
[0065] CNP Transaction: is a "card not present" transaction such as
payments taken over the Internet or by phone or mail.
[0066] Computer Based Server: a computer hardware system dedicated
to running one or more services. Services can vary from database
server, file server, mail server, print server, web server, or
various other types services achieved through a computer
program.
[0067] Computing Device: a computer hardware system typically
connected by a wide area or local area network to transmit data,
receive data, and store (either ephemerally or permanently) said
data in conjunction with its programming Computing device may also
perform business logic, calculations, and present data by various
media.
[0068] Delayed settlement: merchants have to settle transactions
within a specific amount of time after authorization to avoid
interchange downgrades (i.e., increases in interchange fees). The
maximum period varies for everyone and is determined by industry,
transaction type, channel used, and more.
[0069] Digital storage medium: is any data repository able to save
non-transitory information. This is typically or more hard drives
operable by a relational database.
[0070] EDI: Electronic Data Interchange.
[0071] EFT: Electronic Funds Transfer.
[0072] Electronic Remittance Advice (ERA): Any of several
electronic formats for explaining the payments of health care
claims.
[0073] Enhanced Data: Additional data submitted by a merchant
through a credit card network that typically lowers the interchange
rate incurred for the transaction. Enhance data includes sales tax
breakdown, customer references, merchant order numbers,
transportation information, hotel accommodation information, car
rental data, product codes, item descriptions, item quantities,
item units, discount amounts, shipping information and the like.
This additional data is known as Level II and Level II data.
[0074] Explanation of benefits (EOB): is a statement typically sent
by a health insurance entity explaining what medical services were
covered under an insurance policy. An EOB will typically include a
summary of the services performed, the medical provider's fee and
the amount a patient is responsible for.
[0075] Fax: is short for facsimile. It is a method of sending image
data across the standard phone line to another fax machine. It is
considered by many service providers a relatively secure means of
transmitting and receiving sensitive financial and medical
information.
[0076] First Payment: is the initial transaction made by the card
processor to the service provider using a virtual card payment
which. The processing of that transactions enables the card
processor to capture information necessary to make subsequent
payments directly to the acquirer of the service provider thereby
avoiding the need to generate virtual card payments and have those
payments manually processed by the service provider.
[0077] FTP: (file transfer protocol) is an Internet protocol is
used to copy files between computers--usually a client and an
archive site. For the purposes of this application this includes
encrypted variants such as Explicit FTPS, SSH File Transfer
Protocol and tunneling a normal FTP session over an SSH
connection.
[0078] Health Care Claim: refers to an electronic transition
standard code 837 as defined by X12. Variants of the 837 code
include 837i for institutional health care claims; 837p for
professional health care claims; and 837d for dental health care
claims.
[0079] Health Care Claim Payment (835): refers to an electronic
transition standard code 835 as defined by X12 for a health care
claim payment and remittance advice.
[0080] HTTP: (hypertext transfer protocol) is the protocol used to
transmit and receive all data over the World Wide Web. HTTPS is a
secure variant of HTTP.
[0081] IIN: a six-digit Issuer Identification Number (IIN) (also
known as the "Bank Identification Number" (BIN)) the first digit of
which is the Major Industry Identifier (MII).
[0082] Independent Sales Organization (ISO): A company or
individual contracted with a payment card processor or acquirer to
acquire new merchants. Many ISOs provide customer support,
technical support and installation support to its customers on
behalf of the acquirer.
[0083] Interchange Fee: the fee paid between banks for the
acceptance of credit and/or debit card based transactions. The
interchange rate may be greater for certain transactions including,
but not limited, those wherein the physical card is not present at
the point-of-sale card terminal.
[0084] Issuing Bank: the bank that issues a credit, debit or stored
value card to a consumer. This may be synonymous with the card
processor in the context of the current claims. This is typically
the cardholder's financial institution but in the case of a payment
processor, the issued cards may be that of the processor.
[0085] Message: generally means an object of communication or
vessel which provides information.
[0086] Payee: is the recipient of the payment card funds. In health
care, this may be the service provider (e.g., physician's office).
For automobile warranties, this may be the mechanic or service
department. For travel, the payee may be a hotel, airline or the
traveler whose itinerary is often managed on his or her behalf.
[0087] Payor: In health care, an entity that assumes the risk of
paying for medical treatments. This can be an uninsured patient, a
self-insured employer, or a health care plan or HMO. Payor may also
be used in other industries such as automobile warranty claims and
travel services (such as paying for an employee's hotel room or
airline ticket).
[0088] Payment Card: refers to any credit card, debit card, stored
value card or the like.
[0089] Payment Receipt: refers to a transmission made by fax,
email, or the like confirming that a direct payment has been made
from the card processor to the acquirer for the service provider's
merchant account. The payment receipt may be a merger of an
authorization code, amount paid, date of payment, payer identity
and an explanation of benefits into a single file or document.
[0090] Personal Information: information that can be used to
uniquely identify, contact, or locate a single person or can be
used with other sources to uniquely identify a single
individual.
[0091] Personal Identification Number (PIN): A number used by a
cardholder to authorize card payments. A PIN debit is a debit card
transaction authorized by the cardholder using a personal
identification number.
[0092] PCI DSS: is an acronym for the payment card industry data
security standard. PCI DSS is a security standard for organizations
that handle cardholder information.
[0093] Second Payment: is made by the card processor directly to
the acquirer of the service provider's merchant account. This
avoids the need to have the service provider manually process a
virtual card payment.
[0094] Service Provider: refers to the entity that provides
services to be paid for. Service providers applicable to the
current invention may include, but are not limited to, construction
contractors, vehicle repair shops, pharmacies and medical service
providers.
[0095] SMS: (short message service) is a wireless technology for
sending short text messages between mobile phones, fax machines,
and IP addresses. It's similar to paging, except that the
recipient's phone doesn't need to be active; instead, the message
is stored.
[0096] SMTP: Simple Mail Transfer Protocol is used to send email.
The SMTP protocol provides a common language for different servers
to send and receive email messages. The default TCP/IP port for the
SMTP protocol is port 25.
[0097] Standard Industrial Classification (SIC) code: is a United
States government system for classifying industries by a four-digit
code. This is also known as a Merchant Category Code (MCC).
[0098] Storage Device: is an electronic storage medium such as a
hard drive, hard drive array, solid state memory, magnetic tape,
and optical drives.
[0099] Stored Value Card: are those payment cards (in tangible or
virtual form) which have a monetary value stored on them. Whereas
the prepaid credit card can only be used with authorization from
the cardholder, the stored value cards have an anonymous aspect.
Examples of stored-value cards include the well-known telephone
cards, merchant gift cards, or prepaid debit cards.
[0100] Virtual Payment Card: are payment cards that are generated
electronically and not reduced to a physical plastic card. Virtual
payment cards may be processed by a service provider as a CNP
transaction or the data may be transmitted directly to the card
acquirer for the service provider which in such case the CNP
designation may or may not be included.
[0101] The advantages set forth above, and those made apparent from
the foregoing description, are efficiently attained. Since certain
changes may be made in the above construction without departing
from the scope of the invention, it is intended that all matters
contained in the foregoing description or shown in the accompanying
drawings shall be interpreted as illustrative and not in a limiting
sense.
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