Methods and systems for cardholder initiated transactions

1 METHODS AND SYSTEMS FOR CARDHOLDER INITIATED TRANSACTIONS

CROSS REFERENCE TO RELATED APPLICATIONS

This application is a continuation application of application Ser. No. 12/257,766 filed on Oct. 24, 2008 noW U.S. Pat. No. 7,958,052, Which is hereby incorporated by reference in its entirety.

This application claims the benefit of U.S. Provisional Application No. 61/017,968 filed Dec. 31, 2007, Which is hereby incorporated by reference in its entirety.

BACKGROUND OF THE INVENTION

This invention relates generally to transactions associated With a financial transaction card account and, more particularly, to netWork-based methods and systems for financial transactions initiated by an account holder, remotely from a bankcard netWork.

Historically, the use of “charge” cards for consumer transaction payments Was at most regional and based on relationships betWeen local credit issuing banks and various local merchants. The payment card industry has since evolved With the issuing banks forming associations (e.g., MasterCard) and involving third party transaction processing companies (e.g., “Merchant Acquirers”) to enable cardholders to Widely use charge cards at any merchant’s establishment, regardless of the merchant’s banking relationship With the card issuer.

For example, FIGS. 1 and 2 of the present application shoWs an exemplary multi-party payment card industry system for enabling payment-by-card transactions in Which the merchants and issuer do not need to have a one-to-one special relationship. Yet, various scenarios exist in the payment-bycard industry today, Where the card issuer has a special or customized relationship With a specific merchant, or group of merchants. These special or customized relationships may, for example, include private label programs, co-brand programs, proprietary card brands, reWards programs, and others. The special or customized issuer-merchant relationships often require direct communications betWeen the parties for transaction authorization and/or clearing (e.g., for financial transactions). Further, the issuer may be required to maintain back ofiice processes to manage the financial aspects of these special or customized relationships. Alternatively, the issuers may exploit communications through Merchant Acquirers to facilitate indirect communications With the merchants.

Traditional card account payment environments involve a merchant-controlled point of interaction (POI). Traditional points of interaction include point of sale devices, access through a merchant Website, and interaction through a merchant telephone to initiate the authorization request. Collectively, these traditional points of interaction might be referred to as a merchant environment. For all interactions Within this environment, an account number associated With a cardholder’s financial transaction card is entered into the specific merchant’s environment in order to conduct the transaction and/ or obtain an authorization.

The specific cardholder interactions could include the cardholder giving his financial transaction card to a merchant to sWipe or key into the merchant point of sale device, the merchant initiating a telephone call and entering the account number through interactive voice or through the telephone keypad, the cardholder himself sWiping his card into the merchant’ s point of sale device, or the merchant or cardholder entering the account number into the merchant’s Website.

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Payments for approved transactions are managed With the issuer or merchant’s acquirer based on the specific card payment netWork or closed loop environment.

One problem With the merchant environment is that the card and the account number are exposed to potential fraud. Though various security features for the card and account number are used, a more secure environment is needed. Consideration is noW being given to Ways to enable account holders to utilize their accounts remotely from the above listed devices, such that the account holder can initiate or “push” transactions Which are then processed over the bankcard netWork Without a merchant-controlled POI.

BRIEF DESCRIPTION OF THE INVENTION

In one aspect, a method of processing a cardholder-initiated financial transaction With a merchant using a cardholder controlled input device in communication With a payment card netWork and a database is provided. The cardholder uses a payment card issued to the cardholder by an issuer bank. The method includes the steps of storing merchant data Within the database including data identifying the merchants registered to utilize the card netWork, and receiving from the input device transaction data relating to the financial transaction. The transaction data includes an authorization request and merchant identifying data that identifies the merchant involved in the transaction. The method further includes determining that the merchant identified by the merchant identifying data is registered to utilize the card netWork by comparing the transaction data With the merchant data stored in the database. The method also includes forWarding the authorization request to the issuer bank, receiving a response to the authorization request from the issuer bank, and automatically forWarding the response to at least the same input device.

In another aspect, a netWork-based system for processing a cardholder-initiated financial transaction With a merchant is provided. The financial transaction is initiated by the cardholder using a payment card issued by an issuer bank. The system includes a cardholder controlled input device, a database for storing information, and a server system configured to receive data from the input device and is coupled to the database. The server is further configured to store merchant data Within the database including data identifying the merchants registered to utilize the system. The server is also configured to receive transaction data from the input device. The transaction data includes an authorization request and merchant identifying data that identifies the merchant involved in the transaction. The server determines that the merchant identified by the merchant identifying data is registered to utilize the system by comparing the transaction data With the merchant data stored in the database. The server forWards the authorization request to the issuer bank, and receives a response to the authorization request from the issuer bank. The server automatically forWards the response to at least the same input device.

In another aspect, a computer coupled to a database for processing a cardholder-initiated financial transaction With a merchant is provided. A cardholder controlled input device is in communication With the computer. The financial transaction is initiated by a cardholder using a payment card issued by an issuer bank. The computer is programmed to store merchant data Within the database including data identifying the merchants registered to utilize a card netWork. The computer is also programmed to receive transaction data from the input device. The transaction data includes an authorization request and merchant identifying data that identifies the mer

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chant involved in the transaction. The computer is further pro grammed to determine that the merchant identified by the merchant identifying data is registered to utilize the card network by comparing the transaction data with the merchant data stored in the database. The computer is also programmed to forward the authorization request to the issuer bank, receive a response to the authorization request from the issuer bank, and automatically forward the response to at least the same input device.

In another aspect, a computer program is embodied on a computer readable medium for processing a cardholder-initiated financial transaction with a merchant. A cardholder controlled input device is in communication with a card network and a database. The financial transaction is initiated by a cardholder using a payment card issued by an issuer bank. The computer program comprises at least one code segment that stores merchant data within the database including data identifying the merchants registered to utilize the card network. The program receives transaction data at the card network from the input device wherein the transaction data includes an authorization request and merchant identifying data that identifies the merchant involved in the transaction. The program determines that the merchant identified by the merchant identifying data is registered to utilize the card network by comparing the transaction data with the merchant data stored in the database. The program forwards the authorization request to the issuer bank, receives a response to the authorization request from the issuer bank, and automatically forwards the response to at least the same input device.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a schematic diagram illustrating a current authorization environment associated with financial transaction card accounts.

FIG. 2 is a schematic diagram illustrating an exemplary multi-party payment card industry system for enabling ordinary payment-by-card transactions in which the merchants and issuer do not need to have a one-to-one special relationship.

FIG. 3 is a simplified block diagram of an exemplary embodiment of a server architecture of a system in accordance with one embodiment of the present invention.

FIG. 4 is an expanded block diagram of an exemplary embodiment of a server architecture of a system in accordance with one embodiment of the present invention.

FIG. 5 is a schematic diagram illustrating an exemplary authorization process for remote initiation of transactions associated with a financial transaction card, in accordance with one embodiment of the present invention.

DETAILED DESCRIPTION OF THE INVENTION

Described in detail herein are exemplary embodiments of systems and processes for implementing remote initiation and authorization of financial transaction card transactions in the payment-by-card industry. The systems and processes include a cardholder that utilizes, for example, a payment card to make a purchase from a merchant outside of the merchant environment, while still utilizing the bankcard network with which the merchant is registered, such that the purchase made by the cardholder can be processed over the bankcard network.

The systems and processes described herein facilitate enabling a cardholder to initiate authorization of a transaction over a bankcard network. More specifically, the systems and processes described herein facilitate, for example, enabling a

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cardholder to use an input device such as a computer, a cellular telephone, or a PDA to input transaction data and an authorization request to a computer server or processor. A technical effect of the systems and processes described herein include at least one of (a) storing merchant data within a database including data identifying the merchants registered to utilize the card network; (b) receiving from an input device transaction data relating to the financial transaction, wherein the transaction data includes an authorization request and merchant identifying data that identifies the merchant involved in the transaction; (c) determining that the merchant identified by the merchant identifying data is registered to utilize the card network by comparing the transaction data with the merchant data stored in the database; (d) forwarding the authorization request to the issuer bank; (e) receiving a response to the authorization request from the issuer bank; and (f) automatically forwarding the response to at least the same input device.

In one embodiment, a computer program is provided, and the program is embodied on a computer readable medium and utilizes a Structured Query Language (SQL) with a client user interface front-end for administration and a web interface for standard user input and reports. In an exemplary embodiment, the system is web enabled and is run on a business-entity intranet. In yet another embodiment, the system is fully accessed by individuals having an authorized access outside the firewall of the business-entity through the Internet. In a further exemplary embodiment, the system is being run in a Windows® environment (Windows is a registered trademark of Microsoft Corporation, Redmond, Wash.). The application is flexible and designed to run in various different environments without compromising any major functionality.

The systems and processes are not limited to the specific embodiments described herein. In addition, components of each system and each process can be practiced independent and separate from other components and processes described herein. Each component and process also can be used in combination with other apparatus, assemblies and processes.

FIG. 1 is a schematic diagram of a conventional card account payment environment 1 that includes a merchant controlled point of interaction 2, a card issuer 3, and a transaction processor 4 interconnecting the point of interaction 2 and the card issuer 3. The merchant’s point of interaction 2 generally includes one or more of a point of sale device 10, a telephone 11, and/or a merchant website 12, through which authorization requests are initiated.

More specifically, a merchant authorization request 15 is generated at the merchant’s point of interaction 2 which is sent to the transaction processor 4 and forwarded to the card issuer 3 as a request for authorization 16. Upon verifying a status of the cardholder account, the card issuer 3 responds to the transaction processor 4 with an authorization response 18 which is received by the transaction processor 4 and forwarded to the merchant’s point of interaction 2 as an authorization response to merchant 19.

In regard to the card account payment environment 1, a cardholder’s account number is entered into the merchant’s environment with which the cardholder is doing business, in order to obtain the authorization. As described above, this conventionally includes one or more of the cardholder giving his card to a merchant to swipe or key into the merchant point of sale device 10, the cardholder or merchant initiating a phone call from telephone 11 to enter a card account number, the cardholder himself swiping his card in the merchant’s point of sale device 10, or the merchant or cardholder entering the account number associated with the financial transaction card into the merchant’s website 12. Payments for approved