IE83518B1 - Apparatus and method for exchange rate conversion in card transactions - Google Patents
Apparatus and method for exchange rate conversion in card transactionsInfo
- Publication number
- IE83518B1 IE83518B1 IE2000/0956A IE20000956A IE83518B1 IE 83518 B1 IE83518 B1 IE 83518B1 IE 2000/0956 A IE2000/0956 A IE 2000/0956A IE 20000956 A IE20000956 A IE 20000956A IE 83518 B1 IE83518 B1 IE 83518B1
- Authority
- IE
- Ireland
- Prior art keywords
- request
- datastore
- contents
- transaction
- cardholder
- Prior art date
Links
- 238000006243 chemical reaction Methods 0.000 title claims description 20
- 238000010200 validation analysis Methods 0.000 claims description 8
- 230000005540 biological transmission Effects 0.000 claims description 5
- 239000003795 chemical substances by application Substances 0.000 claims 1
- 238000004891 communication Methods 0.000 description 5
- 238000000034 method Methods 0.000 description 4
- 238000010923 batch production Methods 0.000 description 2
- 230000001934 delay Effects 0.000 description 2
- 230000018109 developmental process Effects 0.000 description 2
- 230000002411 adverse Effects 0.000 description 1
- 230000003466 anti-cipated Effects 0.000 description 1
- 239000000470 constituent Substances 0.000 description 1
- 238000010276 construction Methods 0.000 description 1
- 238000001514 detection method Methods 0.000 description 1
- 238000010586 diagram Methods 0.000 description 1
- 239000000284 extract Substances 0.000 description 1
- 230000035755 proliferation Effects 0.000 description 1
- 235000010384 tocopherol Nutrition 0.000 description 1
- 235000019731 tricalcium phosphate Nutrition 0.000 description 1
Description
APPARATUS AND METHOD FOR EXCHANGE RATE
CONVERSION IN CARD TRANSACTIONS
The present invention relates to an inter—computer communications apparatus and to a
method for improving the efficiency and transparency of communications between
computer systems and more particularly to such an apparatus and method for exchange rate
conversion in card transactions.
The term "inter—computer communications" refers to communication between a number of
data processing entities.
In many data processing systems, it is common to transfer data from between a number of
disparate and often geographically remote sources to a local or target computer system.
These sources frequently use different hardware and software platforms to comparable data
sources and to the local target computer. The data may be transferred for storage, used to
obtain information or for processing to provide a result, which is then re—transferred to the
source. Such transfers have become extremely common with the emergence of both
Internet and Intranet applications. When the hardware and software platforms of the
remote sources are configured for this purpose or are identical this is relatively simple and
error free. As the numbers of different hardware and software platforms increase, so too do
the problems increase. When there are a large number of variations in such platforms it
becomes virtually impossible to transfer data in a transparent manner, in that the data must
be converted at each source, into a format suitable for use by the local target computer.
Even this is not suitable in all situations, for example when the source is not designed or
configured for this type of operation having been developed over a long period of time.
Such legacy systems contain large quantities of information, which may be required for the
purposes outlined by the local system. Obviously owners of such source systems wish to
unlock the information stored to enable users to fully exploit the new technologies.
However, as the systems were not designed to operate in this manner this is problematic.
This is particularly the case when it is necessary to connect to application processing
elements on the legacy system.
One example of a situation where transparent and efficient communication of information
between disparate and geographically remote processing entities is required occurs in the
processing of credit card transactions. Card transaction processing requires the
communication of data from a number of disparate and often geographically remote points
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.
Systems, operating in a well controlled environment such as a store charge card system
present little difficulty to system operators as the points of sale and account rationalisation
functions can be easily controlled and modified as required. Similarly, the range of formats
of magnetic card readers in merchant outlets throughout the world while large is limited in
the extent that certain internationally imposed standards must be complied with.
Processing of credit card transactions in a “card not present” CNP environment is not
forced to comply with such standards and a broad proliferation of mechanisms have
developed. The variety of cards that must be accommodated and the number of currencies
being presented, for example to a merchant operating on the intemet means that the
merchant is normally compelled to outsource development of these processing functions.
In order to make such developments cost effective, it is necessary for the developers to
conduct the processing of the transaction at a central site. This imposes certain limits on
both the merchant and on the merchant’s customers. Merchants are effectively bound to the
developer selected for processing of all credit card transactions as the inter computer
communications between the merchant system and the developer system is usually
proprietary for exactly this reason to protect the developer investment.
Additionally, the cardholder is forced to accept a large number of conversions on a given
transaction, all of which cost money. A clarifying example of this is now described. A
cardholder in Japan, billed in Japanese Yen, wishing to purchase goods or services from a
Website in the United Kingdom, transmits the necessary credit card data to the site. This
information is combined with the purchase details and presented to an acquiring bank as a
Sterling pound total. Files for each merchant are amalgamated from each bank and
introduced into a global credit card scheme such as the Visa” system. As the international
settlement currency for these schemes is the United States Dollar (USD), the transaction is
converted from Sterling to USD. This settlement currency amount is then transmitted to
the Japanese bank that issued the card to the cardholder for conversion into the user
currency, namely Japanese Yen. The transaction has thus been converted from Sterling to
Dollars and from dollars to Yen and it may be some time before the cardholder is informed
of the actual price paid for the goods or services. As well as the costs of these transactions
to the customer known systems have inherent delays. These delays and conversions
adversely affect the cardholder.
There is therefore a need for a communication apparatus, which will provide
communications between disparate data sources, which will overcome the aforementioned
problems.
Accordingly, there is provided an inter computer communications apparatus for generating
an authorisation signal or request for validating signal in an electronic commerce
environment, the apparatus having
a processor and associated datastore for connection to a remote merchant system of
the type having a processor and datastore, and
means for connection to a remote client system,
wherein the remote merchant system is configured to perform the steps of: ~
receiving card information associated with a transaction request as a bitstream;
routing the received bitstream to a parsing register;
parsing register contents to extract an originating country identification word;
comparing an extracted identification word with a predefined index stack of
identification words resident on the datastore in response to a match condition
retrieving a conversion multiplier from the datastore; and
applying the multiplier to a transaction value to produce a final billing value for
transmission to the cardholder and the client system, and
wherein the apparatus incorporates means for performing the further steps of: -
generating a quotation currency selection request;
transmitting the generated request to the cardholder;
receiving a currency selection dataword and storing the dataword in a temporary
security buffer; and
comparing the contents of the temporary security buffer with the indexed stack
contents in response to a matched condition and generating an authorisation signal
or request for validation signal.
According to one aspect of the invention there is provided a method for processing
transactions by generating an authorisation signal or request for validation signal in an
electronic commerce environment comprising the steps of: -
receiving card information associated with a transaction request as a bitstream;
routing the received bitstream to a parsing register;
parsing register contents to extract an originating country identification word;
generating a quotation currency selection request;
transmitting the generated request to the cardholder;
receiving a currency selection dataword and storing the dataword in a temporary
security buffer;
comparing an extracted identification word with a predefined index stack of
identification words resident on the datastore in response to a match condition
retrieving a conversion multiplier from the datastore;
comparing the contents of the temporary security buffer with the indexed stack
contents in response to a matched condition and generating an authorisation signal
or request for validation signal;
applying the multiplier to a transaction value in response to an authorization signal
to produce a final billing value for transmission to a cardholder and a client system;
Ideally, the datastore contents are periodically updated from a remote server
The invention will be more clearly understood from the following description of an
embodiment thereof with reference to the accompanying drawing, given by way of example
only, in which: —
Fig. 1 is a block diagram illustrating operation of an inter-computer communications
apparatus formed in accordance with the invention.
For the purposes of this description, specific system architectures, processors, memory
devices, timing and performance details have been omitted in order not to unnecessarily
obscure the present invention. Thus, the constituent components of the invention have
been described in terms of functionality, as many ways of achieving said functionality will
be readily apparent to those skilled in the art.
An inter-computer communications apparatus according to the invention indicated
generally by the reference numeral 1 is connected between a number of merchant systems 2
each having an associated processor and datastore and a client system 3 to facilitate
communications using Transmission Control Protocol/Internet Protocol. (TCP/IP) or
similar connection protocols. The apparatus 1 connects to the merchant systems 2 using a
server 4, which processes Hypertext Transport Protocol (HTTP) requests received from the
systems 2. HTTP is the protocol that is used to submit these requests from the systems 2 to
the server 4, which in turn uses the same protocol to return the results of that request to the
system 2 or merchant. HTTP is the foundation of the World Wide Web (WWW) where the
simplest through to the most complex of browsers use HTTP to issue requests to WWW
servers and to receive and to display the response to those requests.
When a cardholder wishes to make a purchase at a merchant site the card information is
transmitted to the merchant system 2. The merchant system 2 then responds and requests
the cardholder to select a quotation currency selection. The cardholder selects from a
predefined list of billing currencies and transmits this request to the merchant system 2, this
dataword is stored in a temporary security buffer. The merchant system 2 receives the card
information and routes the bit stream received on an appropriate channel with a correctly
authorised protocol to a parsing register. The bitstream is then parsed to extract an
originating country identification word from the bitstream. The extracted identification
word is then passed to a comparator for comparison with a predefined index stack of
identification words resident of the datastore. When a match is detected a conversion
multiplier associated with the matched word is retrieved from the datastore. Before the
multiplier is applied to the currency amount of the transaction the matched word is
compared with the contents of the temporary security buffer. In the event of a no match
condition, further authentication of the transaction request maybe sought. Alternatively, in
the event of such a mismatch a user warning may be generated and routed to the cardholder
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. With the necessary authentication
complete, the multiplier is applied to the transaction value and is quoted to the cardholder
in the currency of choice. Subject to the process described above this will generally be in
the cardholder’s native currency. By the relatively simple expedient of providing country
identifiers and associated multipliers to the merchant, the cardholder is immediately aware
of the final billing amount at the time of making the purchase and is not required to await a
statement from a card-issuing bank which of involves a considerable delay. Furthermore
the risk of disputed transactions and associated chargeback to the merchant is eliminated
where such disputes arise from the application of a disputed conversion rate.
The charge for the transaction in the currency of the merchant is then transmitted to the
merchant acquirer together with the amount in all relevant currencies for processing
through the normal credit card transaction processing system namely proceeding 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 merchant site. Once
authorisation has been received by the merchant the transaction can be processed in the
normal way.
At a preset interval or on request from the merchant site transaction details are transferred
from the merchant to the server 4. When the transaction data is 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 server 4. This record is then
transmitted, including details of the card issuer and card—issuing bank, to the acquiring
bank. From the acquiring bank, the data is directed automatically onto the various credit
card issuing banks. These amounts are then reconciled against the cardho1der’s accounts
and payment is returned through the issuing bank and acquirer to server. When the server
4 receives the transaction, the value of the transaction is returned to the server 4 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 (MSC) 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 to the process described above it will be understood that the server may store
locally, information relating to the currency of the card presented for a given transaction.
In this situation as the transaction is being processed by the merchant, it is routed to the
server and details relating to the currency of the card account are retrieved from a datastore
associated with the remote server.
The remainder of the operation is similar to that described above with the exception that
the conversion from the merchant currency to the cardholder currency is performed at the
server 4. Obviously in this situation, the details relating to the transaction can be stored
locally on the remote server and there is no requirement for an upload from the merchant
point of sale apparatus.
In addition to the method for processing of credit card transactions described, it will be
understood that in certain environments such as in the rental of motor cars it will be
possible for the electronic point of sale to process the transaction and transfer the currency
in merchant currency in both in a batch process to the remote server for processing,
conversion and onward processing of the transactions. The system may also work for Card
Present, where the card issuing authorities permits local conversion of the currency.
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 server 4 to the merchant
site 2. 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 server 4.
The information updated on the merchant system 2 includes details on currency
identification datawords 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. 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 server 4 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 (5)
1. An inter computer communications apparatus for generating an authorisation signal or request for validation signal in an electronic commerce environment, the apparatus having a processor and associated datastore for connection to a remote merchant system of the type having a processor and datastore, and means for connection to a remote client system, wherein the remote merchant system is configured to perform the steps of: - receiving card information associated with a transaction request as a bitstream; routing the received bitstream to a parsing register; parsing register contents to extract an originating country identification word; comparing an extracted identification word with a predefined index stack of identification words resident on the datastore in response to a match condition retrieving a conversion multiplier from the datastore; and applying the multiplier to a transaction value to produce a final billing value for transmission to the cardholder and the client system. and wherein the apparatus incorporates means for performing the further steps of: — generating a quotation currency selection request; transmitting the generated request to the cardholder;
2. receiving a currency selection dataword and storing the dataword in a temporary security buffer; and comparin g the contents of the temporary security buffer with the indexed stack contents in response to a matched condition and generating an authorisation signal or request for validation signal. A method for processing transactions by generating an authorisation signal or request for validation signal in an electronic commerce environment comprising the steps of: — receiving card information associated with a transaction request as a bitstream; routing the received bitstream to a parsing register; parsing register contents to extract an originating country identification word; generating a quotation currency selection request; transmitting the generated request to the cardholder; receiving a currency selection dataword and storing the dataword in a temporary security buffer; comparing an extracted identification word with a predefined index stack of identification words resident on the datastore in response to a match condition retrieving a conversion multiplier from the datastore; comparing the contents of the temporary security buffer with the indexed stack contents in response to a matched condition and generating an authorisation signal or request for validation signal; applying the multiplier to a transaction value in response to an authorization signal to produce a final billing value for transmission to a cardholder and a client system;
3. A method as claimed in Claim 2 wherein datastore contents are periodically updated from a remote server
4. An inter computer communications apparatus for use in an electronic commerce environment substantially as herein described with reference to and as shown in the accompanying drawings.
5. A method for processing transactions in an electronic commerce environment substantially as herein described with reference to the accompanying drawing. MACLACHLAN & DONALDSON Applicants’ Agents
Priority Applications (6)
Application Number | Priority Date | Filing Date | Title |
---|---|---|---|
IE2000/0956A IE83518B1 (en) | 2000-11-17 | Apparatus and method for exchange rate conversion in card transactions | |
EP01980849A EP1656646A2 (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 |
AU1263302A AU1263302A (en) | 2000-11-13 | 2001-11-13 | Transaction processing and inter-computer communications |
AU2002212633A AU2002212633B2 (en) | 2000-11-17 | 2001-11-13 | Inter-computer communications |
EP05028309A EP1646016A3 (en) | 2000-11-13 | 2001-11-13 | Transaction processing and inter-computer communications |
Applications Claiming Priority (1)
Application Number | Priority Date | Filing Date | Title |
---|---|---|---|
IE2000/0956A IE83518B1 (en) | 2000-11-17 | Apparatus and method for exchange rate conversion in card transactions |
Publications (2)
Publication Number | Publication Date |
---|---|
IE20000956A1 IE20000956A1 (en) | 2002-05-29 |
IE83518B1 true IE83518B1 (en) | 2004-07-14 |
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