Abstract:
A method and system of check presentation. At least some of the illustrative embodiments are methods comprising accepting a first paper check and a second paper check in exchange for a good or service (the second paper check postdated), converting the first paper check and the second paper check into a first electronic request and a second electronic request respectively, presenting the first electronic request for payment through a funds transfer network, electronically storing the second electronic request, and then presenting the second electronic request for payment through the funds transfer network on the postdated date.

Description:
BACKGROUND  
       [0001]     Many merchants implement in-house financing (e.g., 90 days same as cash) by taking a series of checks from the customer, depositing the first check on the day of purchase, and holding the remaining checks until the agreed upon dates for further payments. When each agreed upon date arrives, the merchant deposits each check. There are several shortcomings to such a system. One such shortcoming is that if the checks are all dated the day of the original purchase, the checks deposited near the end of the term (e.g., the third month&#39;s check) may be “stale” and therefore refused by a bank. Another shortcoming is that it is a labor intensive process for the merchant to safeguard, identify and deposit the checks on the particular agreed-upon days.  
       SUMMARY  
       [0002]     The problems noted above are solved in large part by a method and system of check presentation. At least some of the illustrative embodiments are methods comprising accepting a first paper check and a second paper check in exchange for a good or service (the second paper check postdated), converting the first paper check and the second paper check into a first electronic request and a second electronic request respectively, presenting the first electronic request for payment through a funds transfer network, electronically storing the second electronic request, and then presenting the second electronic request for payment through the funds transfer network on the postdated date.  
         [0003]     Other illustrative embodiments are systems comprising a point of sale (POS) device configured to accept data regarding a first paper check and a second paper check (the second paper check postdated and the first and second paper checks in payment for the same purchase), and a computer system configured to couple to the POS device (the computer system also configured to couple to a funds transfer network). The POS device creates a digital image of a first paper check, and communicates the digital image to the computer system (and wherein the POS device creates a digital image of a second paper check and communicates the digital image and the postdated date to the computer system). The computer system is configured to present a transaction represented by the first paper check as an electronic debit through the funds transfer network, and wherein the computer system is configured to store the digital image of the second paper check and present a transaction represented by the second paper check as an electronic debit through the funds transfer network on the postdated date.  
         [0004]     Yet still other illustrative embodiments are methods comprising receiving a digital image of a current dated check, receiving a digital image of a postdated check along with a postdated date (the current dated check and postdated check payment for a purchase), presenting a first electronic request representing the current dated check (the presenting to an electronic funds transfer network), and presenting a second electronic representing the postdated check (the presenting to the electronic funds transfer network and proximate in time to the postdated date).  
         [0005]     Finally, other illustrative embodiments are a computer readable media storing a computer program that, when executed by a processor, performs a method comprising receiving a digital image of a current dated check, receiving a digital image of a postdated check along with a postdated date (the current dated check and postdated check payment for a purchase), presenting a first electronic request representing the current dated check, the presenting to an electronic funds transfer network, and presenting a second electronic representing the postdated check, the presenting to the electronic funds transfer network and proximate in time to the postdated date. 
     
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
       [0006]     For a detailed description of exemplary embodiments of the invention, reference will now be made to the accompanying drawings in which:  
         [0007]      FIG. 1  shows a system in accordance with the embodiments of the invention; and  
         [0008]      FIG. 2  shows a method in accordance with the embodiments of the invention. 
     
    
     NOTATION AND NOMENCLATURE  
       [0009]     Certain terms are used throughout the following description and claims to refer to particular system components. As one skilled in the art will appreciate, computer companies may refer to a component by different names. This document does not intend to distinguish between components that differ in name but not function.  
         [0010]     In the following discussion and in the claims, the terms “including” and “comprising” are used in an open-ended fashion, and thus should be interpreted to mean “including, but not limited to . . . .” Also, the term “couple” or “couples” is intended to mean either a direct or indirect electrical or optical connection. Thus, if a first device couples to a second device, that connection may be through a direct connection, through an indirect connection via other devices and connections.  
       DETAILED DESCRIPTION  
       [0011]     The following discussion is directed to various embodiments of the invention. Although one or more of these embodiments may be preferred, the embodiments disclosed should not be interpreted, or otherwise used, as limiting the scope of the disclosure. In addition, one skilled in the art will understand that the following description has broad application, and the discussion of any embodiment is meant only to be exemplary of that embodiment, and not intended to intimate that the scope of the disclosure is limited to that embodiment.  
         [0012]      FIG. 1  illustrates a system  100  in accordance with the embodiments of the invention. In particular, system  100  comprises a Point Of Sale (POS) terminal  10 . A POS terminal  10  has a keypad  12  for entry of pertinent information and also has a check scanner  13 . The check scanner  13  allows the POS terminal  10  to read the magnetic ink character recognition (MICR) line of check  14 , and in some embodiments allows the POS terminal  10  to make a digital image of check  14 . Although there may be merchants who have only a single POS terminal  10 , in alternative embodiments a merchant may have a plurality of POS terminals at each location. The POS terminal  10  may be, for example, a NURIT terminal available from Lipman USA of Syosset, N.Y.  
         [0013]     The illustrative POS terminal  10  couples to a computer system  16  by way of a communication system  18 . In some embodiments, POS terminal  10  is remotely located from the illustrative computer system  16 , and therefore the communication system  18  may take many forms. In some embodiments the communication system  18  may be a voice-based telephone system, and in these embodiments the POS terminal  10  thus has the capability to act as a telephone modem. In alternative embodiments, the POS terminal  10  may couple to the computer  16  by way of a dedicated digital communication system (e.g., a dedicated T1 line). In yet still other embodiments, the POS terminal  10  may be coupled to the computer system  16  by way of the communication network  18  being: an Internet connection; a satellite connection; a radio-based connection; a cellular telephone based system; or a combination these.  
         [0014]     Regardless of the precise nature of the communication system  18 , the POS terminal  10  and computer system  16  communicate regarding potential purchases by a consumer. In particular, when a consumer proposes to purchase a good or service and to pay for that good or service by way of a paper check  14 , the merchant uses the POS terminal  10  to provide information to the computer system  16  to obtain an indication of whether the check should be accepted by the merchant. For example, the merchant may use the POS terminal  10  to provide information to the computer system  16  such as: the name of the person writing the check; the account number of the check; the check number of the check; and/or the driver&#39;s license number of the person writing the check. Regardless of the precise information provided from the POS terminal  10  to the computer system  16 , the information may be entered by way of the keypad  12  and/or the determined by scanning the check through the check scanner  13 .  
         [0015]     Still referring to  FIG. 1 , the computer system  16 , which may comprise a processor  20  coupled to a non-volatile storage device  22 , may perform a verification process with respect to the check and/or the check writer. In some embodiments, the computer system  16  provides some or all of the data regarding the check  14  and/or the check writer to a funds availability network  24 . As the name implies, a funds availability network has the ability to electronically access current account balances and provide an indication of whether there are sufficient funds in the account to cover the proposed check. In accordance with at least some embodiments, the funds availability network  24  may be the Visa Network, which allows subscribers to check available balances as part of a check verification procedure. Other funds availability networks may be equivalently used.  
         [0016]     In addition to, or in place of, checking for funds availability by way of a funds availability network  24 , in the process of verifying the check the computer system  16  may also access a positive and/or negative check writing history database  26 . The database  26  contains information about the check writing history of the person writing the check and/or the account upon which the check is drawn. As the name implies, that history might be positive (indicating a substantially long string of checks where there were sufficient funds to cover checks), and may also contain negative history (an indication of how many checks were written that were returned for insufficient funds). Thus, the positive/negative history information is returned to the computer system  16  for analysis. In accordance with at least some embodiments, the history database  26  is the National Check Network, a subsidiary of the Electronic Clearing House, Inc. of Camarillo, Calif. Other history services may be equivalently used.  
         [0017]     In addition to or in place of funds verification and checking the history, the computer system  16  may itself maintain records regarding the person writing the check or the account on which the check is drawn. Using some or all of the gathered information, the computer system  16  sends an indication to the POS terminal  10  of whether the check  14  should be accepted. In some embodiments, the indication that the check should be accepted is displayed on a display device  28  of the POS terminal  10 . However, other methods of giving an indication of whether the check should be accepted may be equivalently used.  
         [0018]     The indication of whether to accept the check sent from the computer system  16  to the POS terminal  10  may mean different things in different embodiments. In some embodiments, the merchant using the POS terminal  10  may subscribe to a system that merely provides a recommendation on whether the check should be accepted. In alternative embodiments, the merchant using the POS terminal  10  may subscribe to a system where the check is guaranteed. In these embodiments, when the computer system  16  sends the indication that the check should be accepted, this indication also signifies that the company providing the service represented by computer system  16  guarantees payment of the check to the merchant, thus relieving the merchant of the possibility of the check being returned for insufficient funds.  
         [0019]     Still referring to  FIG. 1 , in addition to being a mechanism by which a merchant makes a determination as to whether to accept a check, the POS terminal  10  and computer system  16  also act together to be mechanism by which funds are transferred with respect to the check. In particular, many companies have developed services which transfer funds between the accounts of a payee and the payor. In order to utilize these services, banking laws have been amended to allow the conversion or “truncation” of a check into an electronic transaction (also known as an electronic debit) such that the paper check itself never need be presented to the bank on which it is drawn. In accordance with the embodiments of the invention, the computer system  16  and the POS terminal  10  work together to initiate electronic funds transfer with respect to the paper checks. Considering for purposes of example the illustrative check  14 , as part of a check verification and/or guarantee process discussed above the merchant scans the check  14  to one or more of: read the account number and check number of the check; and/or produce a digital image of the check. Moreover, the POS terminal  10  accepts data related to the check writer (e.g., driver&#39;s license number of the check writer) and to the check itself (e.g., the amount). This information is then transferred though the communication system  18  to the computer system  16  which performs the verification and/or guarantee process. If the check is ultimately accepted, the computer system  16  converts or truncates the check into an electronic debit, and presents the check for payment to an electronic funds transfer network  30 . In some embodiments, the electronic funds transfer network  30  may be a transfer system governed by the National Automated Clearing House Association (NACHA). Such a network  30  facilitates the transfer of funds electronically from the payor (check writer) to the payee (merchant). While  FIG. 1  shows three separate entities implementing the funds availability network  34 , the check writing history database  26  and the electronic funds transfer network  30 , in some embodiments these services may in whole or in part be provided by way of a single service provider.  
         [0020]     In accordance with the embodiments of the invention, the illustrative hardware as discussed in  FIG. 1  may be used to perform in-house financing by the merchant based on the customer providing a plurality of checks for the purchase of an item. However, rather than the merchant having to store the physical checks and deposit them at some future date, the illustrative system of  FIG. 1 , and in particular the computer system  16 , is charged with electronically storing and later presenting those checks.  
         [0021]      FIG. 2  illustrates a method in accordance with the embodiments of the invention. The steps of  FIG. 2  are merely illustrative and many of the steps may be equivalently combined, separated, or performed in a different order. In particular, the process starts (block  200 ) and moves to receiving a current-dated check as down payment for a purchase (block  202 ). The check is then provided, along with other information, to the POS terminal  10  (block  204 ). In some embodiments, these illustrative steps may be implemented by scanning the check through the POS terminal  10  to read the account number and check number and providing information about the check writer by way of the keypad  12  (e.g., a driver&#39;s license number).  
         [0022]     Still referring to  FIG. 2 , next is a determination whether the check is verified or guaranteed (block  206 ). As discussed above, the verification and/or guarantee may come from the computer system  16  after checking for funds availability, positive and/or negative check writing history and other sources of information available to the computer system  16 . If the computer system  16  indicates that the check should not be accepted, the process ends (block  208 ). If, on the other hand, the computer system  16  indicates that the check should be accepted, then one or more postdated checks are also provided to the POS terminal  10  (block  210 ). Much like providing the information for the current-dated check, providing the information for the one or more postdated checks in some embodiments involves using the keypad  12  to provide the amount of the check, and scanning the check through the POS terminal  10  to read the MICR information and/or to create a digital image of the check. However, the one or more postdated checks in accordance with the embodiments of the invention will not be presented for payment until the postdated date. For this reason, and in most cases, a funds availability check for the postdated checks would be futile. In accordance with the embodiments of the invention, if the current-dated check (for which information was provided to the computer system  16  at block  204 ) was indicated to be acceptable by the computer system  16 , then the entire transaction (including the postdated checks) is accepted. Another consideration arising from the fact that the postdated checks will not be presented until the postdated date is that the date of presentation is a valuable piece of information in implementing the method. Thus, in accordance with the embodiments of the invention, the merchant also keys in a future date by way of the keypad  12  (the future date being the postdated date of the check). On currently existing terminals, the future date for presentation is may be provided by way of the “other data” field; however, the future POS terminals may be programmed to specifically query for future date data.  
         [0023]     Still referring to  FIG. 2 , the computer system  16  then converts all the checks to electronic requests (block  212 ), such as electronic debits created from the conversion or truncation of the paper check, and stores them in the non-volatile storage  22 . Thereafter, the computer system  16  presents the electronic request of the current-dated check for payment (block  214 ). As discussed with respect to  FIG. 1 , this presentation may be to the electronic funds transfer network  30 . Moreover, inasmuch as the current-dated check is for a contemporaneous purchase, the electronic presentation is coded to the electronic funds network as a Point Of Purchase (POP) transaction. Coding the electronic request as a POP transaction indicates that in the event of a dispute of any kind, part of the paper trail evidencing the transaction will include a receipt for the good or service.  
         [0024]     The next step in the illustrative method of  FIG. 2  is a determination of whether the day of presentation for the postdated checks has arrived (block  216 ). If not, the illustrative method waits until the date matches the date of one of the postdated checks. Waiting in the loop illustrated by decision block  216  does not necessarily mean that a program executed on processor  20  of computer system  16  waits in a software loop until the appropriate day; rather, this step may be implemented by having a program executed on the processor  20  scan through records stored on a non-volatile storage device  22  on a daily basis searching for records containing electronic requests that should be presented on the current date. If a check is found whose postdated date is that of the current date (block  216 ), the illustrative computer system  16  presents the electronic request represented by that postdated check to the electronic funds transfer network  30  (block  218 ). In accordance with at least some embodiments, the electronic requests representative of the postdated checks, are, by definition, on a day different than the actual transaction where the good or services were exchanged and where there was a paper receipt bearing the date of the transaction. For this reason, the electronic requests representative of the postdated checks are each coded as Accounts Receivable Conversion (ARC) transactions to the electronic funds transfer network  30 . Thus, in the event of a dispute regarding a transaction, the electronic request is indicative of the fact that the funds transfer is similar to an account receivable transaction in spite of the fact that, from a consumers standpoint, the plurality of checks were written contemporaneous with the actual transaction.  
         [0025]     In alternative embodiments, a consumer may not provide all the checks representing the total purchase price of the goods or services at the initial transaction. Instead, the consumer may provide the merchant checks at a later date. The merchant still gets the benefits of the system, because as soon as the checks arrive they may be scanned in through the POS terminal  10 , along with the date the check should actually be presented for payment, thus relieving the merchant of the related art need of having to keep track of the paper checks and deposit those paper checks at some future date.  
         [0026]     Finally, a decision is made as to whether there are more postdated checks with respect to the transaction (block  220 ). If there are no further postdated checks in the transaction, the process simply ends (block  208 ). If, on the other hand, there are further postdated checks for presentation in the transaction, the illustrative method retreats to determining whether the current date is the day of presentation for the postdated checks (block  216 ).  
         [0027]     The above discussion is meant to be illustrative of the principles and various embodiments of the present invention. Numerous variations and modifications will become apparent to those skilled in the art once the above disclosure is fully appreciated. It is intended that the following claims be interpreted to embrace all such variations and modifications.