IE83232B1 - Transaction processing - Google Patents
Transaction processingInfo
- Publication number
- IE83232B1 IE83232B1 IE2000/0908A IE20000908A IE83232B1 IE 83232 B1 IE83232 B1 IE 83232B1 IE 2000/0908 A IE2000/0908 A IE 2000/0908A IE 20000908 A IE20000908 A IE 20000908A IE 83232 B1 IE83232 B1 IE 83232B1
- Authority
- IE
- Ireland
- Prior art keywords
- transaction
- credit card
- point
- currency
- processing
- Prior art date
Links
- 238000006243 chemical reaction Methods 0.000 claims description 21
- 238000000034 method Methods 0.000 description 4
- 230000005540 biological transmission Effects 0.000 description 3
- 238000010923 batch production Methods 0.000 description 2
- 230000001934 delay Effects 0.000 description 2
- 230000002411 adverse Effects 0.000 description 1
- 230000003466 anti-cipated Effects 0.000 description 1
- 230000002860 competitive Effects 0.000 description 1
- 238000010276 construction Methods 0.000 description 1
- 238000001514 detection method Methods 0.000 description 1
- 239000000284 extract Substances 0.000 description 1
- 238000003672 processing method Methods 0.000 description 1
- 238000010200 validation analysis Methods 0.000 description 1
Description
TRANSACTION PROCESSING
The invention relates to transaction processing, and more particularly to charge, credit and
debit card transaction processing.
Card transaction processing requires the communication of data from a number of disparate
and often geographically remote point of sale sources to a local or target processing
computer system. This communication is required for authentication and validation as well
as for account reconciliation purposes. Proprietary systems, operating in a strictly controlled
environment such as a store charge card present little difficulties to operators as the points of
sale and account rationalisation can be strictly controlled and changed if necessary.
However, to process transactions from magnetic card readers located in merchant outlets
throughout the world, far more processing power is required. This processing demand is
further increased by the variety of cards that must be accommodated and by the number of
l5 currencies being presented. The mobility of card users means that an apparently simple
transaction may involve two or more transaction conversions.
For example, a cardholder from one country who is normally billed for transactions on a
card in a given user currency, may travel and obtain goods or services in a second country
having a different or local currency. When paying, the cardholder signs a receipt for the
transaction in the local currency. This transaction is then processed by the systems of the
merchant and passed to an acquiring bank. Files for each merchant are amalgamated from
each bank and introduced into a global system such as the VisaTM system. As the
international settlement currency is the United States dollar, the transaction is converted
from the local currency to the settlement currency from the acquiring bank. This
settlement currency amount is then transmitted to the bank that issued the card to the
cardholder for conversion into the user currency. Not withstanding the possibility for error
during transmission and the costs associated with each conversion the system has inherent
delays. These delays and conversions adversely affect the cardholder.
There is therefore a need for transaction processing method, which will overcome these
problems.
Accordingly, there is provided a method for processing a transaction using a point-of-sale
apparatus, a remote processor, an acquiring bank scheme and an issuing bank authority
wherein conversion of the transaction to a financial amount into a currency associated with
a card is performed at the point of sale apparatus and wherein the conversion comprises the
steps of extracting a credit card number from the presented transaction; parsing the
extracted credit card number to obtain a country code identifier; retrieving a conversion
rate associated with the country code identifier from a local datastore; and applying the
retrieved rate to a local merchant currency amount to generate a billing figure.
Ideally, the method includes the further steps of periodically receiving a connection request
from the point of sale apparatus at the remote processor; retrieving exchange and
associated data from a storage device of the remote processor; and replacing the contents
of the local datastore with the retrieved data so as to update the data on the local datastore,
whereby the local database performs the conversion transactions locally using the updated
data.
A method in accordance with the invention has a number of advantages over previously
known solutions. Merchants using the invention have no foreign exchange exposure and
the cardholders in turn have minimum exposure. This promotes user confidence and thus
increases the commercial appeal of the merchant. As the number of conversions is reduced
the acquirer can offer very competitive merchant service charges (MCS) a portion of which
can be returned to the merchant to promote loyalty. The simplicity of the process can be
readily explained to customers and thus trust and confidence are enhanced, furthermore
there is not disturbance to the existing operational processes. Cardholders are more likely
to buy goods and services from operators utilising the invention because of the reduced end
cost and the transparency of seeing the amount to be debited in the appropriate currency at
the point of sale.
The invention also provides an apparatus for processing a credit card transaction the
features of which are defined in the appended Claims 3, 4 and 5.
The invention will be more clearly understood from the following description of an
embodiment thereof, given by way of example only, with reference to the accompanying
drawing, in which: -
Fig. l is a flow chart illustrating in overview the manner in which a
transaction is processed.
Referring to the drawing, there is shown in operation, a transaction processing system of the
invention indicated generally by the reference numeral 1. The system 1 handles processing
between a card 2 presented at a point-of-sale apparatus 3 located at a merchant's premises
through a remote processor 4 and on to a card issuing bank authority 6 through an acquiring
bankcard scheme 5.
Before describing the method of the current invention further, the steps of processing prior
art transactions are now described in brief. The example given is for a cardholder who is
normally billed in Japanese Yen presenting a card in the United Kingdom whose currency is
Sterling.
Step 1 the transaction is presented to the Japanese cardholder in Sterling.
Step 2 The Merchant passes the transaction to an Acquiring Bank
Step 3 the transaction is converted into the international settlement currency,
namely, US dollars for transmission through the card schemes.
Step 4 the transaction is transmitted through the card schemes mechanism to the
Card Issuing Bank.
Step 5 the card issuing bank a local Japanese currency amount, which is converted
from the transmission US Dollar.
The transaction has therefore been through three conversion mechanisms and had three
margins applied before being applied to a cardholder account.
The present invention overcomes these problems.
When a card holder presents the card for processing of a transaction the card is swiped
through a terminal unit 3, as the card 2 is swiped certain details relating to the transaction
and the card itself are received by the terminal unit 3. The terminal unit 3 then uses locally
stored credit card information to extract from the bin number of the card a country
identifier associated with that card. When the country identifier has been extracted and
identified a currency conversion rate to a local currency being the currency of the merchant
operating the terminal unit is applied to the charge associated with the transaction to give a
card currency value for that transaction. The converted being in the cardholders currency
is then transmitted to a remote processing station for this transaction is then processed
through the normal credit card transaction processing system namely proceeding from the
remote processing station to a credit card debit acquirer and from that acquirer through the
various credit card issuing schemes back to the issuing bank. This issuing bank is the
bank, which issued the card to the cardholder in the cardholder currency. The card holders
account has an amount equivalent to the authorisation sought removed from the available
card credit and authorisation for the request is returned through the credit card issuing
bank, through the card schemes and though the debit acquirer to the remote server. A
record of the amount of the transaction in cardholder currency and in merchant currency is
stored in the point of sale apparatus. Once this authorisation has been received by the
merchant the transaction can be processed in the normal way and authenticating signature
obtained where appropriate.
At a preset interval or on request from the remote server transaction details are transferred
from the point of sale apparatus to the remote server. When the transaction are received
from a given merchant, a file is created for transaction details, this file contains a
conversion rate for each transaction into each and every currency operated by the remote
processor. This record is then transmitted, including details of the card issuer and card-
issuing bank, to the acquiring bank and through the acquiring bank onto the various credit
card issuing banks. These amounts are then reconciled against the cardholder’s accounts
and payment is returned through the issuing bank and acquirer to the remote processor.
When the remote processor receives the transaction, the value of the transaction is returned
to the remote processor in cardholder currency and is then converted at the appropriate rate
to the merchant currency. The merchant currency amount is then settled to the merchants
account in payment of the transaction. This amount maybe net of merchant service charge
or maybe a gross figure.
When the transaction is originally processed the rate of conversion from the merchant
currency to the cardholder currency is obtained on a three—day basis, this is the figure used
plus a foreign exchange margin to convert from the merchant currency to the cardholder
currency. When reconciling the account, the local processor, extracts details of this
transaction and obtains a daily spot rate for conversion. In the event of such a transaction
operated on the spot daily rate would yield a net benefit in conversion values then this
excess is credited to a local account.
Settlement of the account with the merchant may have an additional component in that the
profit margin on a given transaction may be stored in a foreign exchange profit holding
account. This profit holding account may issue a dividend on each transaction in relation
to the parties involved namely the remote server and the merchant operating the system.
In addition, it will be understood that in certain “card not present” CNP environments such
as in the rental of motor cars it will be possible for the electronic point of sale to process
and convert the transaction and transfer the currency, both in merchant currency and
cardholder currency, in a batch process to the remote server for processing of the
transactions.
Details relating to transaction to be processed maybe downloaded periodically or
contemporaneously with a batch process to transfer information relating to country
identification codes and exchange rates to be transferred from the local processor to the
point of sale apparatus. Additionally, details relating to fraudulent use of credit cards
maybe also be transferred from the local server to the point of sale apparatus if required.
Such details may include lists of stolen credit card numbers so that detection of the cards is
immediate at the point of sale without reference to the remote processor.
In the circumstances where credit card transactions are being processed across a network
such as the internet where no electronic points of sale systems exist, the conversions may
be performed at a merchants or vendor site using details similar to that described with
relation to the electronic point of sale apparatus being downloaded to a local merchants
server. This information again includes details on currency identification codes associated
with particular credit card numbers, conversion rates for range of currencies for which
transactions are processed and details relating to stolen or fraudulently used credit cards.
When a customer requests processing of a transaction it may be required for them to seek a
request for a currency for which the charges are to be quoted. This may be alternatively be
extracted automatically from a bin number of the credit card being presented. As an
additional security for the overall system, the requested currency for quotation and the
currency obtained from the bin number may be compared and in the event that a
discrepancy arises further authentication of the transaction request maybe sought.
Alternatively, in the event of such a mismatch a user warning may be generated to seek
verification from the user that billing of the transaction is not in the same currency as the
card issued and request authorisation to proceed.
The details relating to the conversion rates to be applied may equally be applied on the
merchant site may equally be dynamically presented to the merchant site by the remote
processor as required or requested by the vendor site. Obviously, this represents a significant
improvement over known systems in that the event of a sudden fluctuation in exchange
markets significantly affecting a conversion rate between currencies the remote server may
deliver exchange rate information. It is anticipated that the delivery of such information will
be prioritised so that the greatest volume of transactions being processed in a given time
frame are service first.
It will be appreciated that the systems described, both relating to the exchange rates being
supplied on spot and fixed term basis may be applied in an M-Commerce environment. In
this situation, the provision of near instantaneous exchange rate data may be supplied.
The invention is not limited to the embodiment hereinbefore described, but may be varied
in both construction and detail within the scope of the appended claims.
Claims (7)
1. A method for processing a transaction using: - a point—of—sa1e apparatus; an acquiring bank scheme; and an issuing bank authority wherein conversion of the transaction to a financial amount into a currency associated with a card is performed at the point of sale apparatus; wherein conversion of the transaction, comprises the steps of: - extracting a credit card number from the presented transaction; parsing the extracted credit card number to obtain a country code identifier; retrieving a conversion rate associated with the country code identifier from a local datastore; and applying the retrieved rate to a local merchant currency amount to generate a billing figure.
2. A method as claimed in claim 2 including the further steps of: — periodically receiving a connection request from the point of sale apparatus at the remote processor; retrieving exchange and associated data from a storage device of the remote processor; and replacing the contents of the local datastore with the retrieved data so as to update the data on the local datastore, whereby the local datastore performs conversion transactions locally using the updated data.
An apparatus for processing a credit card transaction comprising a point-of-sale apparatus; a remote pI'OC6SSOI'; an acquiring bank scheme; and an issuing bank authority; wherein the point of sale apparatus incorporates means for converting the transaction to a financial amount into a currency associated with a card; wherein the means for converting the transaction comprises:- means for extracting a credit card number for the presented transaction; means for parsing the extracted credit card number to obtain a country code identifier; means for retrieving a conversion rate associated with the country code identifier from a local datastore; and means for applying the retrieved rate to a local merchant currency amount to generate a billing figure.
4. An apparatus for processing a credit card transaction as claimed in Claim 3 including:— means for receiving a connection request from the point of sale apparatus at the remote processor; means for retrieving exchange and associated data from a storage device of the remote processor; and means for replacing the contents of the local datastore with the retrieved data so as to update the data on the local datastore, whereby the local datastore performs conversion transactions locally using the updated data.
5. An apparatus for processing a credit card transaction as claimed in any one of the preceding claims in which the point of sale apparatus comprises a card swipe terminal unit or means for extracting the required information from a credit card “card not present” transaction.
6. A method for processing a transaction substantially as herein described with reference to and as shown in the accompanying drawing.
7. Apparatus for processing a credit card transaction substantially as herein described with reference to and as shown in the accompanying drawing. MACLACHLAN & DONALDSON, Applicant’s Agents,
Priority Applications (6)
Application Number | Priority Date | Filing Date | Title |
---|---|---|---|
IE2000/0908A IE83232B1 (en) | 2000-11-13 | Transaction processing | |
EP05028309A EP1646016A3 (en) | 2000-11-13 | 2001-11-13 | Transaction processing and inter-computer communications |
EP01980849A EP1656646A2 (en) | 2000-11-13 | 2001-11-13 | Transaction processing and inter-computer communications |
AU1263302A AU1263302A (en) | 2000-11-13 | 2001-11-13 | Transaction processing and inter-computer communications |
PCT/IE2001/000142 WO2002039395A2 (en) | 2000-11-13 | 2001-11-13 | Transaction processing and inter-computer communications |
AU2007203290A AU2007203290B2 (en) | 2000-11-13 | 2007-07-17 | Transaction processing |
Applications Claiming Priority (1)
Application Number | Priority Date | Filing Date | Title |
---|---|---|---|
IE2000/0908A IE83232B1 (en) | 2000-11-13 | Transaction processing |
Publications (2)
Publication Number | Publication Date |
---|---|
IE20000908A1 IE20000908A1 (en) | 2002-05-29 |
IE83232B1 true IE83232B1 (en) | 2004-01-14 |
Family
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