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Method and system for merchant processing of purchase card transactions with expanded card type acceptanceRelated Patent Categories: Data Processing: Financial, Business Practice, Management, Or Cost/price Determination, Automated Electrical Financial Or Business Practice Or Management Arrangement, Finance (e.g., Banking, Investment Or Credit), Including Funds Transfer Or Credit TransactionMethod and system for merchant processing of purchase card transactions with expanded card type acceptance description/claimsThe Patent Description & Claims data below is from USPTO Patent Application 20060116955, Method and system for merchant processing of purchase card transactions with expanded card type acceptance. Brief Patent Description - Full Patent Description - Patent Application Claims
BACKGROUND OF THE INVENTION [0001] The invention relates generally to merchant processing of purchase card transactions. In particular, the invention relates to systems and methods for processing a variety of purchase card products and transaction types that may be presented to a merchant. [0002] Purchasing of goods and services using a purchase card (e.g., credit card or debit card) for payment has become commonplace. Card issuers, such as banks, retailers, or other financial service providers, provide cardholders with purchase card accounts. The card issuer agrees to transfer funds to various merchants--either directly or via an intermediary--in payment for goods and services received by the cardholder, and the cardholder agrees either to repay the card issuer or to have funds deducted from the cardholder's deposit account. The cardholder receives a presentation instrument, which is typically a rectangular piece of plastic bearing a card number and other identifying information. To purchase goods or services, the cardholder either presents the presentation instrument or provides the card number to a merchant. The merchant accepts the presentation instrument and delivers the goods or services to the customer, generating a transaction record (ticket) in paper or electronic form. In order for the merchant to be paid and the cardholder to be billed, the merchant typically submits the ticket to an acquiring bank for processing. [0003] Acquirer processing (also called merchant processing) of purchase card transactions is complicated by a number of factors. For instance, how a purchase card transaction is processed depends on the particular card product used. For example, some card products (e.g., VISA and MASTERCARD products) are "interchange" cards, which are issued by various banks or other institutions under the authority of a card association that establishes rules regarding the use and acceptance of the card products. Each card association typically provides an interchange service for routing transactions between an acquiring bank and a card issuing bank. An interchange card generally may be accepted by any merchant, as long as the merchant maintains an account with an acquiring bank (or other institution) that participates in the card association. Authorization and settlement requests for interchange cards are generally processed by routing the requests from the acquiring bank to the card association, which then routes the requests to the card issuing bank. Other card products may be "private label" products, for which routing of requests between banks is not supported. For such cards, it is generally necessary the acquiring bank also be the card issuing bank, making the acceptance of such cards limited. Examples include credit cards issued by retailers, which are usually accepted only at the retailer's own outlets. [0004] Transaction processing is further complicated by the variety of card products that a single card association or issuer may offer. For instance, a large card association (e.g., the VISA or MASTERCARD association) typically offers a range of card products such as credit cards (where the cardholder is billed for purchases), check cards (where purchase amounts are deducted directly from the cardholder's checking account), corporate cards (where an employer of the cardholder receives the bill), and so on. Each card product may be subject to different rules and regulations regarding the use, acceptance, and processing of the card product. [0005] Still more complexity arises due to card issuers' participation in electronic debit networks such as the NYCE or PLUS networks. These debit networks typically do not issue card products themselves. Instead, they agree with various banks to provide network services for routing debit card transactions from an acquiring bank to a card issuing bank. An issuing bank may participate in multiple electronic debit networks; cards issued by the bank generally bear a badge for each debit network in which the bank participates. Thus, depending on where and how it is presented, the same plastic could be used, e.g., for a credit card transaction to be routed through the VISA interchange or a debit card transaction to be routed through the NYCE network or the PLUS network. An acquiring bank must be able to distinguish these uses and properly route each transaction. [0006] Yet another layer of complexity is added by the possibility that the cardholder may present the same card to a merchant for different types of transactions. For instance, in addition to sales transactions, the cardholder may desire to return goods previously purchased using the card, obtain a cash advance using the card, or make a payment on the outstanding balance of the card account. Each card association or issuer has rules related to whether a merchant may accept a particular card product for each type of transaction. For instance, a retail outlet may be authorized to accept an interchange card for sales but not for cash advances; the same retail outlet may be authorized to accept both sales and cash transactions using a debit network. [0007] To accommodate customer preferences, many merchants desire to offer a variety of options to their customers, including the ability to use a number of different card products from different issuers, associations, and networks, as well as the ability to perform different types of transactions for a particular card product. At the same time, merchants also desire to control expenses associated with accepting different card products, for instance, by not having to maintain accounts with a number of different acquiring banks. Thus, in order to provide effective card processing services to a merchant, an acquiring bank must be prepared to process a variety of card products and transaction types, routing each transaction to the correct destination, deducting appropriate fees, and keeping accurate records of activity. [0008] To assist acquiring banks, third-party merchant services providers offer transaction processing services to a number of such banks. In addition to managing the processing and recording of card transactions, such a third-party provider must also manage information regarding which card products and transaction types a particular one of its acquiring bank clients is allowed to accept, in addition to information about each merchant. [0009] An acquiring bank or a third-party service provider generally operates one or more platforms for processing purchase card transactions. Each platform includes various data stores, such as merchant records that provide information about each merchant account; the record for a particular merchant may be identified by a unique merchant identification number. The platform receives a batch of transaction tickets from the merchant, transfers corresponding finds to the merchant's account, routes tickets to the appropriate entities for settlement, and keeps records of the merchant's activity for accounting and reporting purposes. [0010] Existing systems are limited in their ability to process a merchant's transactions involving a variety of card products and transaction types. For example, in some existing systems, a private label card is implemented using a processing platform that has both the cardholder account records and the merchant account records, thereby eliminating the need to route the transactions to another system for settlement. However, such platforms may be unable to handle processing of interchange card transactions, for which different formatting and routing procedures are required. Thus, a separate platform is usually provided for interchange cards. Consequently, a merchant who accepts both a private label card and an interchange card must have a record on two different platforms, generally with a different identification number on each platform. Either the merchant must submit transactions separately (i.e., in separate batches) for the two card products or the transactions must be rebatched prior to processing. In either case, there is generally no link between the merchant records on the two processing platforms: the merchant receives reports separately for each card, and any changes to the merchant data (e.g., the merchant's address) must be made separately on each system. Similar problems may arise in regard to other combinations of card products having conflicting processing rules. In some instances, the overhead associated with handling additional card products causes acquiring banks or third-party providers to limit the merchant's options for accepting various cards. [0011] Existing systems also limit the ability of a merchant to accept different transaction types. For instance, many existing systems limit a merchant record to one or two transaction types per card product (e.g., sales and returns only, or cash advances and payments only). Thus, if a merchant desires to accept both sales and cash advance transactions for a particular card product, two records would have to be maintained for the merchant. Either the merchant is required to submit separate batches for each transaction type or the transactions are rebatched prior to processing. Again, this leads to inefficiency and overhead that may cause acquiring banks or third party providers to limit the merchant's options for allowing customers to perform different transactions. [0012] Further, existing systems also limit the acquiring bank's ability to assess fees that reflect the bank's actual costs. For example, when an acquiring bank acquires a ticket, it generally pays to the merchant account an amount less than the face value of the ticket by a percentage known as the discount rate. The discount rate reflects the risk that the acquiring bank will not be repaid by the card issuer; in the case of interchange cards, it also reflects the interchange fee (set by the card association) that the acquiring bank will have to pay in settlement of the transaction. The risk and the interchange fee may vary depending on the card product used. For instance, a card association may set an interchange fee of 2% of the transaction total for transactions using its credit card products and 3% of the transaction total for transactions using its debit card products. Such fees may vary from one association, issuer, or network to another. However, existing systems typically do not enable the acquiring bank to determine the discount rate on a transaction-by-transaction basis. In some systems, the merchant record is associated with one discount rate so that applying different discount rates for different transactions would again require maintaining multiple records for the same merchant. Further, existing systems for processing ticket acquisition often do not support determining the particular card product that was used. [0013] Hence, it would be desirable to manage merchant accounts in a manner that provides increased flexibility for acquiring banks to process different card products and different transaction types, and to price transactions according to the card product used. BRIEF SUMMARY OF THE INVENTION [0014] Embodiments of the present invention provide systems and methods for merchant processing of purchase card transactions with expanded card type acceptance, enabling processing of merchant transactions involving a number of card products for various transaction types without the need to maintain multiple records for a merchant. For each merchant, a record is maintained of each card type, and transaction processing parameters are associated with each card type. A "card type" may be defined to correspond to a single card product, a group of card products, or only certain cards of a particular card product. During transaction processing, a card type for the transaction is identified from transaction data submitted by the merchant, and the transaction processing parameters associated with the identified card type are used to control transaction processing. Because the processing parameters can be specific to a particular merchant and a particular card type, a single platform can support any merchant accepting any card type or combination of card types, including interchange cards and private label cards issued by the merchant or by other merchants. In addition, the same card can be subjected to different processing rules depending on where it is presented. [0015] According to one aspect of the invention, a method for processing a purchase card transaction submitted by a merchant is provided. A purchase card identifier is extracted from transaction data submitted by the merchant. A card type corresponding to the purchase card identifier is identified from a list of card types accepted by the merchant, the list of card types corresponding to a plurality of card products including an interchange card and a private-label card. The purchase card transaction is processed according to merchant-specific rules determined from merchant-specific processing parameters associated with the identified card type. The merchant-specific processing parameters may be used to determine, e.g., whether the merchant is allowed to submit transactions of the submitted type, where to route the transaction data for settlement, how to format the transaction data, whether the acquirer reimburses the merchant, what discount rate to apply, and so on. The list of card types accepted by the merchant may include at least one private label card issued for a retailer, where the merchant is not an outlet of the retailer. [0016] According to another aspect of the invention, a method of processing purchase card transactions is provided. A plurality of card types is defined, at least one of the plurality of card types corresponding to a purchase card and having associated therewith a plurality of merchant-specific sets of transaction processing parameters. Each of a plurality of merchants is authorized to accept one or more of the plurality of card types. Upon a cardholder presenting to a merchant the purchase card corresponding to the at least one card type having associated therewith the plurality of merchant-specific sets of transaction processing parameters for a transaction, the transaction is processed using one of the plurality of merchant-specific sets of transaction processing parameters that corresponds to the merchant. A first one of the plurality of merchant-specific sets of transaction processing parameters may include a first routing destination parameter, and a second one of the merchant-specific sets of transaction processing parameters may include a second routing destination parameter different from the first routing destination parameter. The purchase card may bear a first badge identifying a first card issuing entity and a second badge identifying a second card issuing entity. In this case, the first routing destination parameter can correspond to a routing destination for a card product of the first card issuing entity while the second routing destination parameter corresponds to a routing destination for a card product of the second card issuing entity. [0017] According to another aspect of the invention, a method for processing purchase card transactions submitted by a plurality of merchants is provided. A plurality of card types is defined, each card type corresponding to a group of purchase cards and having associated therewith a set of merchant-independent transaction processing parameters. For each of the plurality of merchants, a merchant card type list is created. Each merchant card type list includes a subset of the plurality of card types, and a set of merchant-specific transaction processing parameters is associated with each card type in the subset. For each purchase card transaction, a card type corresponding to the purchase card used in the purchase card transaction is identified from the merchant card type list for the merchant submitting the purchase card transaction. The merchant-specific transaction processing parameters and the merchant-independent transaction processing parameters associated with the identified card type are used to control processing of the purchase card transaction. The plurality of card types may include a private label card type corresponding to a private label card of an issuing retailer, and a first merchant card type list for a first merchant that is not an outlet of the issuing retailer can include this private label card type. A second merchant card type list for a second merchant that is an outlet of the issuing retailer can also include this private label card type. Merchant card type lists may be created from default card type lists, and additional card types can be added to the default card types on a merchant-by-merchant basis. [0018] According to another aspect of the invention, a method for processing purchase card transactions submitted by a plurality of merchants, each of which is associated with one of a plurality of acquirers, is provided. A master card product list is defined to include a plurality of card types, each card type corresponding to a group of purchase cards and having associated therewith a set of merchant-independent transaction processing parameter values for the group of purchase cards. For each acquirer, an acquirer-level card product list is defined, each acquirer-level card product list including a subset of the plurality of card types. Each merchant is associated with at least one of the card types included in the acquirer-level card product list of the associated acquirer, and for each card type associated with the merchant, values are established for a set of merchant-specific transaction processing parameters. For each purchase card transaction submitted by one of the plurality of merchants, a card type for the purchase card used in the purchase card transaction is identified from the at least one card type associated with the merchant. The merchant-specific transaction processing parameter values and the merchant-independent transaction processing parameter values associated with the identified card type are then used to control processing of the purchase card transaction. [0019] According to another aspect of the invention, a system for processing a purchase card transaction submitted by a merchant is provided. The system includes: an interface configured to receive transaction data for the purchase card transaction; control logic configured to identify a card type for the purchase card transaction from a list of card types accepted by the merchant using the received transaction data, the list of card types corresponding to a plurality of card products including an interchange card and a private label card; and control logic configured to process the purchase card transaction according to one or more merchant-specific rules associated with the identified card type. [0020] According to another aspect of the invention, a system for processing purchase card transactions for a plurality of merchants is provided. The system includes: an interface configured to receive transaction data to be processed; a server configured to perform a transaction processing operation using the transaction data; a card product data store containing a master card product list, the master card product list defining a plurality of card types and associated merchant-independent processing parameters; and a merchant master data store containing a merchant card type list for each of the plurality of merchants, each merchant card type list including at least one of the plurality of card types and associated merchant-specific processing parameters. The server is further configured to use a merchant card type list for a merchant to identify a card type for a purchase card transaction submitted by the merchant and to use the merchant-independent and merchant-specific processing parameters associated with the identified card type to control the transaction processing operation. [0021] According to another aspect of the present invention, a system for processing purchase card transactions submitted by a plurality of merchants, wherein each of the merchants is associated with one of a plurality of acquirers is provided. The system includes a data store having: (1) a master card product list including a plurality of card types, each card type corresponding to a group of purchase cards and having associated therewith one or more merchant-independent transaction processing parameters; (2) a plurality of acquirer-level card product lists, each acquirer-level card product list including a respective subset of the plurality of card types; and (3) a plurality of merchant card product lists corresponding to the plurality of merchants, each merchant card product list including at least one of the card types included in the acquirer-level card product list of the associated acquirer, each card type in each merchant card product list further having associated therewith one or more merchant-specific transaction processing parameters. The system also includes control logic configured to identify a card type for a purchase card used in a purchase card transaction submitted by a merchant, the card type being identified from a merchant card product list corresponding to the merchant submitting the purchase card transaction; and control logic configured to process the purchase card transaction using the one or more merchant-independent transaction processing parameters and the one or more merchant-specific transaction processing parameters associated with the identified card type. [0022] The following detailed description together with the accompanying drawings will provide a better understanding of the nature and advantages of the present invention. Continue reading about Method and system for merchant processing of purchase card transactions with expanded card type acceptance... 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