US20170364890A1

US20170364890A1 - System and method of payment of merchants on behalf of payment card system transaction acquirers

Info

Publication number: US20170364890A1
Application number: US15/621,327
Authority: US
Inventors: Sandeep Malhotra; Shanthan Subramaniam; Dana Lorberg
Original assignee: Mastercard International Inc
Current assignee: Mastercard International Inc
Priority date: 2016-06-15
Filing date: 2017-06-13
Publication date: 2017-12-21
Also published as: US20170364878A1; CN109313764A; CN109313754A; WO2017218482A1; CN109313766A; WO2017218485A1; WO2017218483A1; WO2017218487A1; CN109313755A; CN109313756A; WO2017218479A1; US20230385796A1; CN109564657A; WO2017218489A1; US20220300937A1; EP3472782A1; US20220222643A1; US20170364918A1; US20170364910A1; CN109313756B

Abstract

A card payment network handles a payment card account system transaction. The transaction involves a merchant and was acquired by a transaction acquirer. The card payment network initiates an electronic funds transfer to credit the merchant's bank deposit account on behalf of the transaction acquirer.

Description

CROSS REFERENCE TO RELATED APPLICATIONS

This application claims the benefit of U.S. Provisional Patent Application Nos. 62/350,322 (filed on Jun. 15, 2016); 62/350,335 (filed Jun. 15, 2016); 62/350,407 (filed Jun. 15, 2016); 62/351,155 (filed Jun. 16, 2016); 62/350,821 (filed Jun. 16, 2016); 62/351,016 (filed Jun. 16, 2016); 62/351,227 (filed Jun. 16, 2016); 62/350,831 (filed Jun. 16, 2016); 62/350,416 (filed Jun. 15, 2016); and 62/351,164 (filed Jun. 16, 2016); the contents of which provisional applications are hereby incorporated by reference for all purposes.

BACKGROUND

In the “four party model” upon which most payment card systems are based, merchants that accept payment card transactions do so via agreements with transaction acquirers. Transaction acquirers are typically financial institutions authorized to act as intermediaries between merchants and the financial institutions that issue payment cards. Among the systems that employ the four party model are MasterCard, Visa, RuPay and Union Pay. Acquirers typically make payments to merchants using conventional EFT payment network rails and deposit funds to merchants' bank accounts based on the net settlement positions that the merchants have with the acquirer after netting fees and the applicable merchant discount rate (MDR). Set up of such payments is complex, and it is common for merchants to receive payment three days after a payment card transaction occurs.
The present inventors have now recognized opportunities to improve handling of payments to merchants with respect to payment card transactions.

BRIEF DESCRIPTION OF THE DRAWINGS

Features and advantages of some embodiments of the present disclosure, and the manner in which the same are accomplished, will become more readily apparent upon consideration of the following detailed description of the invention taken in conjunction with the accompanying drawings, which illustrate preferred and example embodiments and which are not necessarily drawn to scale, wherein:

FIG. 1 is a block diagram of a payment card account system.

FIG. 2 is block diagram of a payment system such as an EFT (electronic funds transfer) system.

FIG. 3 is a block diagram of a payment card system provided in accordance with aspects of the present disclosure.

FIG. 4 is a block diagram of an example computer system that may perform functions in the system of FIG. 3.

FIGS. 5, 6, 7 and 8 are flow charts that illustrate processes that may be performed in the system of FIG. 3 in accordance with aspects of the present disclosure.

DESCRIPTION

In general, and for the purpose of introducing concepts of embodiments of the present disclosure, an EFT payment network in conjunction with a payment card system may be enabled to provide an integrated merchant payment solution for acquirers. The card system operator may provide an automated payment function that allows automated calculation of settlements due to merchants and immediate implementation of crediting or debiting the merchant's bank account using the EFT payment network.
Merchants may be enrolled in the automated system, from the acquirer's point of view, via bulk data loads to the payment card system operator. In addition or alternatively, the payment card system operator may host a self-serve portal that allows merchants to provide or update their bank account details. The automated system may also implement back office automation that executes payments when due based on triggers defined by the acquirer.
Such an automated system for paying merchants may shorten the time between execution of the card transaction and payment to merchant, thus improving the cash flows for merchants. Moreover, administrative burdens on acquirers may be reduced and acquirers may be enabled to provide better service to the merchants they support.
FIG. 1 is a block diagram that illustrates a payment card account system 100.
The system 100 includes a customer device 102 such as a magnetic stripe card, a payment IC (integrated circuit) card (contactless and/or contact), or a payment-enabled mobile device. Block 104 in FIG. 1 represents a merchant device such as a POS (point of sale) terminal/card reader. The merchant device 104 may also be considered part of the payment card account system 100. The customer device 102 may be presented to the merchant device 104, to consummate a purchase transaction and to permit the merchant device 104 to read payment card account data (including, e.g., a payment account number) from the customer device 102. In other situations, the merchant device 104 may be an e-commerce server computer, and the customer device 102 may be a personal computer, a mobile device running a mobile browser, etc.; in such situations, the customer device 102 may engage in an online shopping session with an e-commerce website hosted by the merchant device 104.
A computer 106 operated by an acquirer (acquiring financial institution) is also shown as part of the system 100 in FIG. 1. The acquirer computer 106 may receive a payment account system authorization request message for the transaction from the merchant device 104. The acquirer computer 106 may route the authorization request message via a card network 108 to a server computer 110 operated by the issuer of a payment account that is associated with the account number obtained by the merchant device 104 (e.g., from the customer device 102) and included in the authorization request message. The authorization response message generated by the payment issuer server computer 110 may be routed back to the merchant device 104 via the card network 108 and the acquirer computer 106.
One well known example of a card network is referred to as the “Banknet” system, and is operated by Mastercard International Incorporated, which is the assignee hereof.
The payment account issuer server computer 110 may be operated by or on behalf of a financial institution (“FI”) that issues payment accounts to individual users such as the customer who presented or operated the customer device 102 referred to above. For example, the payment card issuer server computer 110 may perform such functions as (a) receiving and responding to requests for authorization of payment account transactions to be charged to payment accounts issued by the FI; and (b) tracking and storing transactions and maintaining account records.
The payment card account system communications among the merchants, acquirers, card network and/or issuers may conform to a known standard such as ISO 8583.
The components of the system 100 as depicted in FIG. 1 are only those that are needed for processing a single transaction. A typical payment system may process many purchase transactions (including simultaneous transactions) and may include a considerable number of payment account issuers and their computers, a considerable number of acquirers and their computers, and numerous merchants and their devices, as well as a very large number of customer devices.
FIG. 2 is a block diagram that illustrates a payment network system 200, of which one example is the ACH (automated clearing house) system operated in the United States.
The system 200 includes an originator device 202, which may be a computer operated by an originator of a transaction. Common kinds of transactions are credit transactions and debit transactions. The originator is the party that initiates the transaction. The originator may be, for example, an individual or a corporation or other organization.
The system 200 further includes an originator PSP (payment services provider) computer 204. The originator PSP computer 204 receives payment instructions from the originator and forwards data entries that reflect the instructions to a payment system switch/network 206, which is also part of the system 200. The originator PSP computer 204 may be operated by an originator PSP of which the originator is a customer. The switch/network 206 may be operated by a governmental or private entity that serves as a clearing facility for the system 200.
Also included in the system 200 is a beneficiary PSP computer 208. The beneficiary PSP computer 208 receives entries from the payment system switch/network 206 and posts entries to accounts of depositors.
Still further, the system 200 includes a beneficiary 210 that is one of the depositors of the beneficiary PSP. In the case of a credit transaction, the account at the beneficiary PSP of the beneficiary may be credited with the amount instructed to be paid by the originator device 202. The beneficiary may be, for example, an individual or a corporation or other organization. Both PSPs may typically be banks or other financial institutions (FIs).
The communications among the parties in the system 200 may typically be conducted using XML (eXtensible Markup Language) and may comply with a standard according to ISO 20022.
The components of the system 200 as depicted in FIG. 2 are only those that are needed for processing a single transaction. A typical payment network system may process many transactions (including simultaneous transactions) and may include a considerable number of PSPs and their computers, one or more clearing operators, and numerous originators and beneficiaries
FIG. 3 is a block diagram of a payment card system 300 provided in accordance with aspects of the present disclosure.
The payment card system 300 may include all the components described above in connection with FIG. 1, including a customer device 102, a merchant device or system (labeled with reference numeral 104 a to reflect additional functionality it may provide in the system 300), a transaction acquirer (labeled with reference numeral 106 a to reflect additional functionality it may provide in the system 300), a card network (labeled with reference numeral 108 a to reflect additional functionality it may provide in the system 300), and a payment card issuer 110.
Further, the payment card system 300 may include a merchant payment services computer 302. The merchant payment services computer 302 may be in communication with the card network 108 a, and may be under common operation with the card network 108 a. In some embodiments, hardware making up the merchant payment services computer 302 may at least partially overlap with one or more computer systems that implement the card network 108 a. Details of the merchant payment services computer 302 will be described below. In general, the merchant payment services computer 302 may receive and store merchants' deposit account details, and may manage execution of payments due from acquirers to merchants. For embodiments in which the merchant payment services computer 302 is under common operation with the card network 108 a, or at least partially overlaps therewith in hardware terms, actions ascribed herein to the merchant payment services computer 302 may also be deemed to have been performed by the card network 108 a.
The payment card system 300 is further shown as incorporating an originator payment services provider (O-PSP) 304. The O-PSP may resemble item 204 described above in connection with FIG. 2 and may be in communication with the merchant payment services computer 302.
In addition, the payment card system 300 may include or be in a cooperative relationship with a payment switch/network 306, which may resemble item 206 described above in connection with FIG. 2. The payment switch/network 306 may be in communication with the O-PSP 304.
Still further, the payment card system 300 is shown as incorporating a beneficiary payment services provider (B-PSP) 308. The B-PSP 308 may resemble item 208 described above in connection with FIG. 2. The B-PSP 308 may be in communication with the payment switch/network 306.
Communication channels or possible communication channels are also shown from the acquirer 106 a and the merchant system 104 a, respectively, to the merchant payment services computer 302.
The components 304, 306, 308 shown in FIG. 3 may be part of an EFT system such as an ACH system.
Any one or more of the blocks shown in FIG. 3, in addition to representing the indicated entity, may also be considered to represent one or more computer systems operated by such entity.
FIG. 4 is a block diagram of an example embodiment of the merchant payment services computer 302.
Referring now to FIG. 4, the merchant payment services computer 302 may, in its hardware aspects, resemble a typical server computer and/or mainframe computer, but may be controlled by software to cause it to function as described herein.
The merchant payment services computer 302 may include a computer processor 400 operatively coupled to a communication device 401, a storage device 404, an input device 406 and an output device 408. The communication device 401, the storage device 404, the input device 406 and the output device 408 may all be in communication with the processor 400.
The computer processor 400 may be constituted by one or more processors. Processor 400 operates to execute processor-executable steps, contained in program instructions described below, so as to control the merchant payment services computer 302 to provide desired functionality.
Communication device 401 may be used to facilitate communication with, for example, other devices (such as other components of the payment system 300, including the card network 108 a, the O-PSP 308, the acquirer 106 a and/or the merchant system 104 a).
Communication device 401 may comprise numerous communication ports (not separately shown), to allow the merchant payment services computer 302 to communicate simultaneously with a number of other computers and other devices, including communications as required to simultaneously handle numerous interactions with other devices.
Input device 406 may comprise one or more of any type of peripheral device typically used to input data into a computer. For example, the input device 406 may include a keyboard and a mouse. Output device 408 may comprise, for example, a display and/or a printer.
Storage device 404 may comprise any appropriate information storage device, including combinations of magnetic storage devices (e.g., hard disk drives), optical storage devices such as CDs and/or DVDs, and/or semiconductor memory devices such as Random Access Memory (RAM) devices and Read Only Memory (ROM) devices, as well as so-called flash memory. Any one or more of such information storage devices may be considered to be a computer-readable storage medium or a computer usable medium or a memory.
Storage device 404 stores one or more programs for controlling processor 400. The programs comprise program instructions (which may be referred to as computer readable program code means) that contain processor-executable process steps of the merchant payment services computer 302, executed by the processor 400 to cause the merchant payment services computer 302 to function as described herein.
The programs may include one or more conventional operating systems (not shown) that control the processor 400 so as to manage and coordinate activities and sharing of resources in the merchant payment services computer 302, and to serve as a host for application programs (described below) that run on the merchant payment services computer 302.
The programs stored in the storage device 404 may include, for example, an application program 410 for providing one or more software interfaces to allow the merchant payment services computer 302 to receive input that provides details of merchant bank accounts.
Another program that may be stored in the storage device 404 is a web hosting application program 412 for enabling the merchant payment services computer 302 to host one or more web portals that are accessible by merchants and/or acquirers to allow them to enter or update merchant bank account details.
The storage device 404 may also store an application program 414 that programs the processor 400 to enable the merchant payment services computer 302 to manage payments to merchants on behalf of transaction acquirers. Details of the merchant payment application program 414 will be described below.
The storage device 404 may further store one or more software modules (block 416) that serve as software interfaces between the merchant payment services computer 302 and one or more O-PSPs that are constituents of the above discussed EFT system.
The storage device 404 may also store, and the merchant payment services computer 302 may also execute, other programs, which are not shown. For example, such programs may include communications software and a reporting application. The latter program may respond to requests from system administrators for reports on the activities performed by the merchant payment services computer 302. The other programs may also include, e.g., device drivers, database management software, etc.
Still further, the storage device 404 may store a database 418 that stores merchant bank account details that have been uploaded to the merchant payment services computer 302. The storage device 404 may also store one or more other databases 420 needed for operation of the merchant payment services computer 302.
Other computerized components of the system 300 may be constituted by computer hardware having the same type of components and hardware architecture as described herein with reference to FIG. 4.
FIG. 5 is a flow chart that illustrates a process that may be performed in the system of FIG. 3 in accordance with aspects of the present disclosure.
At 502 in FIG. 5, the merchant payment services computer 302 receives the merchant bank account details. In some embodiments, there may be three or more ways in which the merchant bank account details are received by the merchant payment services computer 302. These may include, for example: (a) the acquirer sending to the merchant payment services computer 302 a batch file containing merchant bank account details for a number of merchants supported by the acquirer; (b) uploading of merchant bank account detail by the acquirer to the merchant payment services computer 302 via a direct API; (c) merchant interaction with a merchant self-serve portal, as referred to above; and (d) one or more portals available for use by acquirer support personnel. Such portals may be made available by one or more of (i) a web service API that interacts with the acquiring system; (ii) a web portal for access by customer support staff from the acquirer's perspective; and (iii) a portal hosted by the merchant payment services computer 302 for access by merchants. The latter portal may serve as a “one stop shop” to allow the merchants to access acquiring services such that the merchants may make relevant changes to their payment bank account details and to access reports providing payment schedules and payment history for a given merchant's records.
The latter portal may also provide merchant registration by merchants directly and also access to acquirer support staff to enter details. FIG. 6 is a flow chart that illustrates an embodiment of such a process. At 602 in FIG. 6, the merchant/merchant staff member may enter the necessary data to identify the merchant and the merchant's bank account information. At 604 in FIG. 6, communication may occur between the merchant payment services computer 302 and the merchant/merchant staff member to satisfy “know your customer” compliance requirements. This may involve submission of suitable documentation (e.g., scanned facsimiles of documents) by the merchant and review of the same by system employees.
At 606 in FIG. 6, the merchant payment services computer 302 may engage in suitable ID&V (identification and verification) processes to assure authentication of the merchant engaging in the registration. (A similar ID&V process may occur when the merchant updates its registration data.)
At 608, the merchant payment services computer 302 may confirm to the merchant that the registration process is complete.
When the merchant-related data is uploaded by the acquirers, the uploaded data may include such relevant information as bank account details (bank, routing number and bank account number), MDR, service fees, and frequency of payments.
Referring again to FIG. 5, at 504, the merchant payment services computer 302 stores the merchant bank account details and other data uploaded by the acquirers and/or merchants.
As indicated at 506, further processing may occur at a later time after the merchant bank account details are received and stored by the merchant payment services computer 302. At the later time, the merchant payment services computer 302 may manage payments to merchants (block 508, FIG. 5) in regard to payment card account transactions involving the merchants. In doing so, the payments may be based on information collected by and made available from the card network 108 a (FIG. 3). The card network 108 a may have all the transaction details from the merchants and the acquirers and thus may enable the merchant payment services computer 302 to be informed of the merchants' net positions and to make payments accordingly directly to the merchants on behalf of the acquirers.
FIG. 7 is a flow chart that illustrates details of the processing that may occur at 506.
At 702 in FIG. 7, the merchant payment services computer 302 may receive card account transaction information for the merchant over a period of time (say, one day).
At 704, the merchant payment services computer 302 may apply the “MDR” (merchant discount rate) that is in effect between the merchant and the merchant's acquiring financial institution.
At 706, the merchant payment services computer 302 may calculate the merchant's net position vis a vis the acquirer, taking the MDR and any current charge-back transactions into account.
At 708, the merchant payment services computer 302 may initiate an EFT transaction to transfer—to the merchant—the merchant's net balance owed from the acquirer. This transaction may be a credit push payment via an EFT system, as represented by blocks 304, 306 and 308 in FIG. 3.
In various embodiments, or various situations, for a given merchant, the EFT transaction referred to at 708 may occur daily, or at regular times more frequently than daily, or in response to each payment card account system transaction that is accepted by the merchant and authorized by the account issuer, or each time a threshold balance due to the merchant is reached, or less frequently than daily; or some combination of the foregoing.
In some embodiments, the merchant payment services computer 302 may keep a running total of the amount due to the merchant from the acquirer. In cases where the funds transfer to the merchant is triggered by reaching a positive balance threshold, the acquirer may have set the threshold in accordance with its service agreement with the merchant and as part of the merchant registration performed by the acquirer.
In situations where the merchant is the debtor, then the merchant may be provided an opportunity through the merchant self-serve portal to initiate a push payment transaction to the acquirer to settle the merchant's obligation to the acquirer. FIG. 8 is a flow chart that illustrates a process whereby a merchant settles an obligation to the acquirer.
At decision block 802 in FIG. 8, the merchant payment services computer 302 determines whether the merchant's net position is such that the merchant owes money to the acquirer. If a positive determination is made at decision block 802, then block 804 may follow decision block 802. (In the absence of a positive determination at decision block 802, the process of FIG. 8 may end.) At block 804, the merchant payment services computer 302 may send a message such as a text message or an email message to the merchant to advise the merchant that the merchant has a negative balance vis a vis the acquirer.
A decision block 806 may follow block 804. At decision block 806, the merchant payment services computer 302 may determine whether the merchant has requested that a transfer occur to settle the merchant's obligation to the acquirer. If so, then block 808 may follow decision block 806. (In the absence of a positive determination at decision block 806, the process of FIG. 8 may end.) At 808, the merchant payment services computer 302 may initiate an EFT transfer charged to the merchant's account and to benefit the acquirer in order to settle the merchant's obligation.
An arrangement as described with reference to FIGS. 3-8 may simplify management of merchants by acquirers and at the same time may provide merchants with quick access to cash at their bank deposit accounts in respect to payment card account system transactions accepted by the merchant.
As used herein and in the appended claims, the term “computer” should be understood to encompass a single computer or two or more computers in communication with each other.
As used herein and in the appended claims, the term “processor” should be understood to encompass a single processor or two or more processors in communication with each other.
As used herein and in the appended claims, the term “memory” should be understood to encompass a single memory or storage device or two or more memories or storage devices.
As used herein and in the appended claims, a “server” includes a computer device or system that responds to numerous requests for service from other devices.
The above descriptions and illustrations of processes herein should not be considered to imply a fixed order for performing the process steps. Rather, the process steps may be performed in any order that is practicable, including simultaneous performance of at least some steps.
As used herein and in the appended claims, the term “payment card system account” includes a credit card account, a deposit account that the account holder may access using a debit card, a prepaid card account, or any other type of account from which payment transactions may be consummated. The terms “payment card system account” and “payment card account” and “payment account” are used interchangeably herein. The term “payment card account number” includes a number that identifies a payment card system account or a number carried by a payment card, or a number that is used to route a transaction in a payment system that handles payment card transactions. The term “payment card” includes a credit card, debit card, prepaid card, or other type of payment instrument, whether an actual physical card, electronic, or virtual.
As used herein and in the appended claims, the term “payment card system” or “payment account system” refers to a system for handling purchase transactions and related transactions. An example of such a system is the one operated by MasterCard International Incorporated, the assignee of the present disclosure. In some embodiments, the term “payment card system” may be limited to systems in which member financial institutions issue payment card accounts to individuals, businesses and/or other organizations.
Although the present invention has been described in connection with specific example embodiments, it should be understood that various changes, substitutions, and alterations apparent to those skilled in the art can be made to the disclosed embodiments without departing from the spirit and scope of the invention as set forth in the appended claims.

Claims

What is claimed is:

1. A method comprising:

handling a payment card account system transaction in a card payment network, the transaction involving a merchant and having been acquired by a transaction acquirer; and

initiating an electronic funds transfer by the card payment network to credit the merchant's deposit account on behalf of the transaction acquirer.

2. The method of claim 1, wherein the electronic funds transfer is via an EFT (electronic funds transfer) system.

3. The method of claim 2, wherein the electronic funds transfer is via an ACH (automated clearing house) system.

4. The method of claim 1, wherein the electronic funds transfer effects a transfer of funds to said merchant's deposit account from an account belonging to said transaction acquirer.

5. The method of claim 1, wherein said electronic funds transfer executes a transfer of funds relating to a plurality of payment card account system transactions that includes said payment card account system transaction.

6. The method of claim 5, wherein said electronic funds transfer executes a transfer of funds relative to a net position of funds due to the merchant from the transaction acquirer.

7. The method of claim 6, wherein said net position is net of fees due to the transaction acquirer.

8. A method comprising:

handling a plurality of payment card account system transactions in a card payment network, the transactions all involving a merchant and having been acquired by a transaction acquirer; and

initiating an electronic funds transfer by the card payment network to credit the merchant's deposit account on behalf of the transaction acquirer, said funds transfer for transferring a net funds position from the transaction acquirer to the merchant in regard to said plurality of transactions.

9. The method of claim 8, wherein the electronic funds transfer is via an EFT (electronic funds transfer) system.

10. The method of claim 9, wherein the electronic funds transfer is via an ACH (automated clearing house) system.

11. The method of claim 8, wherein the electronic funds transfer effects a transfer of funds to said merchant's deposit account from an account belonging to said transaction acquirer.

12. The method of claim 8, wherein said net funds position is net of charge-back transactions and fees due to the transaction acquirer.

13. The method of claim 8, further comprising:

receiving, from the transaction acquirer, an account identifier that identifies said merchant's deposit account.

14. The method of claim 13, wherein:

said account identifier is received in a message, said message also including a discount rate that defines fees due to the transaction acquirer from the merchant.

15. An apparatus comprising:

a processor; and

a memory in communication with the processor, the memory storing program instructions, the processor operative with the program instructions to perform functions as follows:

16. The apparatus of claim 15, wherein the electronic funds transfer is via an EFT (electronic funds transfer) system.

17. The apparatus of claim 16, wherein the electronic funds transfer is via an ACH (automated clearing house) system.

18. The apparatus of claim 15, wherein the electronic funds transfer effects a transfer of funds to said merchant's deposit account from an account belonging to said transaction acquirer.

19. The apparatus of claim 15, wherein said net funds position is net of charge-back transactions and fees due to the transaction acquirer.

20. The apparatus of claim 15, wherein the processor is further operative with the program instructions to receive, from the transaction acquirer, an account identifier that identifies said merchant's deposit account, said account identifier received in a message, said message also including a discount rate that defines fees due to the transaction acquirer from the merchant.