The disclosed subject matter relates to transaction processing in the payment-by-card industry.
The use of payment devices that are linked to customer accounts (e.g., credit cards, debit cards, charge cards, smart cards, etc.) is commonplace for conducting financial transactions in the modern economy. The payment-by-card industry involves many different entities (e.g., card issuers, merchant acquirers, payment processors, etc.) that perform various tasks for processing payment-by-card transactions (i.e., handling the information and payment flows needed for converting an electronic record created at the point of sale into cash for the merchant).
Payment transaction and information management messages may use the Integrated Product Message (IPM) format, which is a feature-rich, flexible, variable-length format that supports new technologies such as chip cards, e-commerce and member-to-member proprietary data.
The payment devices that are in use in the payment-by-card-industry are diverse. Card issuers may offer private-label payment cards directly to individuals and businesses. Alternatively, card issuers may offer cobranded cards issued in partnership with major credit providers (e.g., MasterCard). Further, the different entities involved in the payment-by-card industry often differentiate their products and services in the marketplace by associating or linking their payment cards or services with additional features to be competitive in the marketplace. For example, banks or other issuers may link rewards programs to the use of their particular payment cards. Similarly, merchants may link use of payment cards with coalition or loyalty programs that help build the relationship between consumer and merchant. Issuers may offer single-use or limited use cards to prevent fraudulent use. Similarly, issuers may offer multiple cards linked to a single payment account, for example, for the convenience of a businesses and a family. The payment devices can be used at points of sale, by mail, and over the telephone or the Internet. Several issuers now provide their customers the opportunity to manage their accounts online (e.g., online bill pay). Further, the issuers may provide customers with virtual or proxy payment cards for online commerce.
Corresponding to the diversity of payment device types and features, and their use, payment-by-card transaction processing requirements can be diverse and fragmented. Different transaction processing modules and service providers may be required to process different aspects of a single payment transaction related to the different features of the payment device or its use.
Consideration is now being given to ways of enhancing a global payment card processing system to allow common or centralized transaction processing of different aspects of payment transactions corresponding to diverse payment device types, features, and their use.
A system and method are provided for processing transactions that are made using diverse payment device types in the commerce. A centralized transaction processing platform is integrated with a standard payment-by-card industry network to process transactions made using different payment device types in the same manner as a conventional credit or debit card. A single platform can provide a range of secure, flexible physical and virtual world payment solutions for all devices (cards, RFID, mobile, etc.).
The system and method involve processing payment transactions made using unconventional and diverse payment devices as if they were made using conventional “plastic” magnetic stripe or smart payment cards (e.g. MasterCard, Visa, and American Express cards). A centralized transaction processing platform is connected to standard payment-by-card industry networks (e.g. MasterCard's CGMS and EPSnet networks) that process transactions made with conventional payment cards. The centralized transaction processing platform interrogates payment transactions with respect to pre-defined rules-based transaction controls transaction controls. The platform, accordingly, denies transaction authorization requests or forwards the same for further processing to other entities on the network. This arrangement allows application of the rules-based transaction controls before a purchase is made.
Further, the centralized transaction processing platform can route individual transactions to according to pre-determined routing rules for the funding of the payment transactions. Diversionary billing schemes in which cardholder transactions are charged to different payment accounts, for example, according to transaction type, can be implemented.
The centralized transaction processing platform is generates a controlled payment number (CPN) for each transactions. The CPN serves as a proxy for the cardholder's real card or account number in transaction processing. The CPN can be provided to a cardholder upon request (e.g., through a web interface) for use in Card Not Present transactions as a proxy for the cardholder's real card or account number.
The CPN number generated by the centralized transaction processing platform is used as an index for tracking a transaction on the payment network and with network entities through authorization, clearing and settlement. The centralized transaction processing platform can be linked to an issuer via a P2P link in the payment network's infrastructure, and can communicate CPN-indexed transaction settlement and chargeback flows directly with the issuer over the P2P link.
Further features and advantages of the disclosed subject matter will become apparent from the following detailed description taken in conjunction with the accompanying figures showing illustrative embodiments of the disclosed subject matter, in which:
Throughout the figures, the same reference numerals and characters are used to denote like features, elements, components or portions of the illustrated embodiments, unless otherwise stated.
A centralized transaction processing platform and method are provided for processing transactions that are made using diverse payment device types. The transaction processing platform may be used to provide hosted services to payment-by-card network entities (e.g., merchants, acquirers, service providers, processors, issuers, etc.). A single platform can provide a range of secure, flexible physical and virtual world payment solutions for all devices (cards, RFID, mobile, etc.).
The centralized transaction processing platform can be seamlessly integrated with existing payment-by-card networks, including custom electronic payment networks (e.g., TSYS) that are presently used by merchants 240, acquirers 250 and card issuers 260 (e.g., banks) for transaction processing services.
The centralization and customization of transaction processing can advantageously lessen the transaction processing burden on merchants, acquirers, or card issuers, and may reduce costs of customized card products, programs or solutions by providing economies of scale.
An exemplary platform 210 is the “ControlPay™ Platform” provided by Orbiscom Inc., The Chanin Building, 122 East 42nd Street, Suite 2005, New York, N.Y. 10168. The ControlPay™ Platform is designed to provide transaction processing for a variety of card products and transaction processing applications.
In an exemplary implementation of the invention, platform 210 is configured to provide intelligent routing of card transactions to bank accounts based on transaction data characteristics and cardholder rules, and/or to provide rules-based authorization controls. Intelligent routing of card transactions to bank accounts based on cardholder rules and transaction data enables “combination card” applications, in which a single card affects different accounts, based on transaction amount, cumulative spend amounts, merchant and merchant category, validity periods, geographic and device controls (e.g., ATM only). Exemplary combinations of different accounts that may be linked to a single payment card include: debit, credit, and secured lending accounts; consumer and business accounts; parent and children accounts; and different general ledger accounts.
Further, the intelligent routing of card transactions to bank accounts enables “diversion” billing to particular accounts in the combination of accounts according to preestablished authorization rules. The authorization rules may be preestablished by either the issuer and/or cardholder. An exemplary authorization rule for a combination of credit, debit and secured lending accounts is as follows:
Another exemplary authorization rule for a combination of different GL accounts is as follows:
An exemplary authorization rule for a combined parent and children account (See
Further, platform 210 may be configured to implement rules-based authorization controls on transactions made by cardholders. The rules for authorization control may be preestablished by either the issuer and/or the cardholder. Exemplary rules for authorization control are as follows:
With reference to
As a further example of category control, the employee's card may be intended only for use at specific merchants (e.g., British Petroleum petrol stations and Hilton hotels). In this case, platform 210 checks the MCC in each such authorization request to confirm that the transaction is in the authorized category (i.e., a petrol station, hotel, or restaurant), and further checks the Merchant ID in the authorization request to confirm that the transaction is with one of the specifically allowed merchants before forwarding the authorization request to the issuer for further processing. If the MCC is not in the authorized category or the Merchant ID does not correspond to one of the specifically allowed merchants, the authorization request is denied by platform 210.
As yet a further example of category control, the employee's card may be intended for use only at specific times (e.g., only on weekdays). In such case, platform 210 is configured to check the MCC and the Merchant ID, and further to check the date/time of the transaction as a basis for forwarding or denying the authorization request.
As still a further example of category control, the employee's card may be intended for use at any petrol station outside the U.K., but only at specific merchants (e.g., British Petroleum petrol stations) in the U.K. In such case, platform 210 is configured to check the MCC, Merchant ID, and transaction date/time, and to further confirm the country of the transaction as a basis for forwarding or denying the authorization request.
In another implementation of the invention, platform 210 can be configured to provide transaction processing for acceptance of non-ubiquitous payment device types over a standard payment-by-card network (e.g., MasterCard payment network). An exemplary non-ubiquitous payment device is the AirPlus Company Account (UATP) card, which is issued by a few airlines to preferred corporate customers for consolidated payment for flights and travel agency services. Other examples of less well accepted or non-ubiquitous payment device types include private label devices, closed loop payment devices such as PayPal, other payment brands, and new payment device types found in the telecommunications industry. Platform 210 allows ubiquitous acceptance of the less well accepted payment types via the acceptance networks of well accepted payment brands such as MasterCard or Visa. Merchants do not have to change acceptance, back end web design, or sign up to accept the less well accepted payment types. A unique MasterCard/Visa number is generated for every transaction where a closed loop payment device/solution is not accepted and the transaction occurs against the primary account as if the merchant naturally accepted the payment type.
In yet another implementation of the invention, platform 210 can be configured to provide transaction processing for purchasing card (“P-Card”) programs (
P-Card controls can support company purchasing policy compliance, for example, through Supplier Base Consolidation, Spend Limits by transaction, Spend Limits by Period, and Merchant Category Code Exclusions. Platform 210 can be configured to implement these and/or other P-Card controls.
The centralized implementation of P-Card controls and transaction processing can overcome the drawbacks associated with previous use of P-Cards (e.g., resource intensive manual reconciliation and poor integration with ERP systems), and therefore encourage significantly greater use of P-Cards for business-to-business (B2B) transactions.
In yet another implementation of the invention, platform 210 can be configured to provide transaction processing for all brokerage type (e.g., Travel Management Company) supplier payments through the standard payment-by-card network (
Platform 210 is configured to maintain approval workflow for every P-Card transaction to ensure segregation of duties and to prevent employee fraud and errors. Once a P-Card purchase, which adheres to corporate purchasing policy is approved, a unique purchase card number—Controlled Payment Number (CPN), is provided for the transaction. Controls (supplier, amount, etc.) are associated with the CPN before the CPN is issued. Not a penny can be charged without approval. The CPN can be used only with the approved vendor, only for the approved amount, and only within a specific time frame. Once the CPN is used, it cannot be used again. Transactions will only pass settlement if they adhere to these controls. Thus, there is no margin for error, fraud or non-compliance. The unique CPN acts as a primary key, allowing each individual transaction to be separately identified. This allows platform 210 to offer reconciliation and data capture functionality for ERP integration.
This method of P-Card transaction processing advantageously results in control before the purchase has occurred.
In further implementations of the invention, platform 210 may be configured to provide security for Internet payment transactions. For these applications, platform 210 is configured to generate a single-use PAN or Controlled Payment Number (CPN). The CPN is requested by a cardholder (e.g., credit or debit cardholder) prior to Internet payment. In the online transactions, the CPN is used as a front or proxy for a cardholder's real card number. The CPN enables the cardholder to shop online at any merchant without having to reveal his or her real card details to the merchant. Nevertheless, the merchants can process the transactions as if they were made with the cardholder's real card number. No merchant adoption required. In practice, a cardholder can request a CPN that will front for his or her real card number from the bank for use in any Card Not Present transaction. Depending on the controls set by the cardholder (or the card issuer), the CPN can be valid for a single transaction or multiple transactions. Transactions made using the CPN are ultimately authorized and settled against the cardholder's real account.
The inventive centralized transaction processing platform is further described herein with reference to its use in conjunction with standard online payment networks (e.g., EPSnet, BankNet and Global Clearing Management System (GCMS)), which are provided to the payment-by-card industry by assignee MasterCard International, Inc. (“MasterCard”). EPSnet is a telecommunications network, which is used in Europe to link issuers and acquirers for Online POS/ATM Transaction Processing. EPSnet interfaces with BankNet, which is a global telecommunications network linking all MasterCard card issuers and data processing centers into a single financial network. GCMS is a centralized payment processing system, which facilitates the processing of payment transactions and information management among the parties. In addition to MasterCard, transaction processing by GCMS involves four participants: issuers (the cardholders' banks), acquirers (the merchants' banks), merchants, and cardholders. GCMS uses MasterCard's IP network to link its member banks to retailers and other merchants. Payment transaction and information management messages may have a standard industry format, for example, the Integrated Product Message (IPM) format, which is a feature-rich, flexible, variable-length format that supports new technologies such as chip cards, e-commerce and member-to-member proprietary data. The IPM formats or other industry standard formats designate particular transaction message types and particular data elements (DE) in those messages for particular transaction information.
In payment transaction processing, authorization occurs when a merchant and/or acquirer requests approval for a cardholder's transaction from an issuer. Clearing and settlement refers to processes that determine the amounts due between issuers/banks and acquirers/merchants for payment transactions and associated fees.
Integration of platform 210 and MasterCard network formats for the authorization request/response process flows shown in
Further, the virtual card number CPN may be provided in an authorization message in DE124 or obtained through Customer Support System (CSS)}.
Additionally, integration of platform 210 with the bank processes and formats for the authorization request/response process flows shown in
Integration of platform 210 and MasterCard network processes and formats for the IPM presentment flows shown in
Further, integration of platform 210 and bank processes and formats for the IPM presentment flows shown in
Integration of platform 210, MasterCard, and bank processes and formats for the clearing exception cycle flows require consideration of the following factors:
Integration of platform 210, MasterCard, and bank processes and formats for the GDR/SDOL flow shown in
It will be understood that the foregoing is only illustrative of the principles of the disclosed subject matter, and that various modifications can be made by those skilled in the art without departing from the scope and spirit of the disclosed subject matter as defined by the appended claims. Exemplary embodiments may be combined with other exemplary embodiments or modified to create new embodiments.
This application claims the benefit of U.S. Provisional Patent Application Ser. No. 60/893,071, filed on Mar. 5, 2007, entitled “Systems and Methods for Controlling Payment and Information Flows in Payment-By-Card Networks,” which is hereby incorporated by reference in its entirety herein.
Filing Document | Filing Date | Country | Kind | 371c Date |
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PCT/US08/55890 | 3/5/2008 | WO | 00 | 8/3/2010 |
Number | Date | Country | |
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60893071 | Mar 2007 | US |