Method and apparatus for payment processing using debit-based electronic funds transfer and disbursement processing using addendum-based electronic data interchange

This disclosure describes a payment and disbursement system, wherein an initiator authorizes a payment and disbursement to a collector and the collector processes the payment and disbursement through an accumulator agency. The accumulator agency processes the payment as a debit-based transaction and processes the disbursement as an addendum-based transaction. The processing of a debit-based transaction generally occurs by electronic funds transfer (EFT) or by financial electronic data interchange (FEDI). The processing of an addendum-based transaction generally occurs by electronic data interchange (EDI).

BACKGROUND OF THE INVENTION 
1. Field of the Invention 
The present invention relates generally to the processing of payments and 
disbursements. More particularly, the invention relates to a method and 
apparatus for processing payments using debit-based electronic funds 
transfer and processing disbursements using addendum-based electronic data 
interchange. 
2. Description of the Related Art 
If an employee owes a permissive or mandatory obligation to a third party, 
the employee has few options for making recurring payments through the 
employer. Presently, most employers do not have the capability to process 
payments and disbursements for an employee through their payroll systems. 
If an employee has a recurring permissive obligation, the employee may 
make payments on this obligation through the traditional means, such as, 
for example, payment by cash, payment by a check, or electronic payment 
through the employee's bank. Similarly, if an employee has a recurring 
mandatory obligation, such as, for example, a child support payment, an 
alimony payment, or other similar court-enforced mandatory obligations, 
the employee may also make payments on these obligations through the same 
traditional methods. In either of these situations, however, there are few 
options for an employee to make payments or disbursements through an 
employer. 
For recurring mandatory obligations, one option is for an employer to 
withhold an amount from an employee's wages and to make subsequent 
disbursement of the amount to a particular receiving entity. This 
withholding generally occurs as a court-sanctioned withholding, such as a 
garnishment. For example, there are presently systems that allow the 
payment and disbursement of child support obligations from an employer 
directly into the bank account of a state's child support agency. One 
present system comprises computer software that allows an employer to 
extract data from any corporate financial application in order to process 
the obligation. The software then connects with an automated clearinghouse 
and processes an electronic payment for the obligation. The electronic 
transaction is a credit-based transaction. In a credit-based transaction, 
the automated clearinghouse issues a credit to the state agency based on 
the amount of the obligation. The bank for the state agency receives the 
credit and subsequently issues a debit against the bank account of the 
employer. The automated clearinghouse receives the debit from the bank of 
the state agency and processes the debit against the bank of the employer. 
When the amount of the obligation is satisfied through the automated 
clearinghouse, the credit held by the bank of the state agency is 
satisfied by the debit issued against the bank of the employer. Another 
present system performs similar operations, but the system functions only 
on its own proprietary software. These current methodologies for payment 
and disbursement processing are inefficient and undesirable based at least 
on three grounds. 
First, the current methods for payment and disbursement processing require 
that employers use credit-based transactions. These transactions involve 
numerous interactions with an automated clearinghouse, which involve both 
financial and temporal inefficiencies. A credit-based transaction is 
financially inefficient because this type of transaction requires more 
interactions with an automated clearinghouse. Each time that a transaction 
passes through an automated clearinghouse, a processing fee is charged. 
Also, a credit-based transaction is temporally inefficient. Because a 
credit-based transaction must pass through an automated clearinghouse in 
multiple incantations, this type of transaction takes more time to 
complete. 
Second, the current methods for payment and disbursement processing only 
allow the processing of one financial transaction at a time. This 
inefficiency results because the current methods use a payment format that 
is limited to one financial exchange per payment or disbursement 
transaction. For all electronic transactions with an automated 
clearinghouse, there are four available formats: cash concentration or 
disbursement (CCD), cash concentration or disbursement plus addenda 
(CCD+), corporate trade exchange (CTX), and corporate trade payments 
(CTP). The current systems utilize the CCD+ format, a combination of the 
CCD format and an addendum. The CCD+ format is limited to a single addenda 
record and is thus limited to one payment and disbursement per 
transaction. An addenda record enables the exchange of electronic payments 
as well as payment-related information through financial institutions over 
an automated clearinghouse network. In contrast, the CTX format allows one 
electronic payment to cover multiple obligations, therefore including up 
to 9,999 addenda records. The CTP format utilizes a distinct combination 
of addenda records, but the CTP format was discontinued effective April 
1996. Therefore, because the current systems only utilize the CCD+ format, 
they can only process transactions one at a time. 
In addition to these financial and temporal inefficiencies, the current 
methods also contain inherent structural inefficiencies. The current 
methods for payment and disbursement processing all require a bank both at 
the beginning and at the end of each financial transaction. Accordingly, 
these systems do not allow the employer to initiate a financial 
transaction to a recipient directly through an automated clearinghouse. 
Instead, the systems require that an employer initiate the financial 
transaction at a bank, that the bank process the financial transaction 
through an automated clearinghouse, and that the automated clearinghouse 
complete the transaction between the employer and the recipient. For the 
current systems, these processes include multiple transactions through the 
automated clearinghouse. These structural inefficiencies inure due to the 
inability of the employer to initiate or process electronic transactions 
through an automated clearinghouse. 
The inefficiencies and other shortcomings in the current methodologies for 
payment and disbursement processing reflect undesirable diminutions in 
capacity and quality that could be achieved by further development of 
improved payment and disbursement processing methods. Thus, the current 
payment and processing methods reflect an unsatisfactory development of 
methods and systems to process both the permissive and mandatory 
obligations of an employee by an employer and subsequent disbursement to 
an intended recipient. 
SUMMARY OF THE INVENTION 
The present invention is directed to a method and system that obviates 
problems due to the limitations and disadvantages of the prior art. 
It is an object of one embodiment of the invention to provide a system 
whereby a collector of funds may easily process a payment and a 
disbursement. 
It is another object of another embodiment of the invention to enable a 
collector to transmit an electronic payment and an addendum-based file to 
an accumulator agency for processing. 
It is still another object of another embodiment of the invention to enable 
an accumulator agency to receive an electronic payment and to process a 
payment as a debit-based transaction. 
It is yet another object of another embodiment of the invention to enable 
an accumulator agency to receive an addendum-based file and to process a 
disbursement based on the addendum information. 
To achieve these and other objects, and in accordance with the purposes of 
the invention, as embodied and broadly described, one aspect of the 
invention includes a method of accumulating a payment and processing a 
disbursement. This method comprises initiating a payment with disbursement 
information from a payee to a payee through a collector; transferring to 
an accumulator agency the payment and the disbursement information from 
the collector; processing from the agency the payment as a debit 
transaction; and processing from the agency the disbursement information 
as an addendum transaction. 
A further aspect of the invention includes a method of processing a 
payment. This method comprises receiving payment information at a 
collector; sending the payment information from the collector to an 
accumulator agency; receiving at the accumulator agency payment 
information from the collector regarding the payment; and initiating by 
the accumulator agency the payment as a debit transaction. 
Another aspect of the invention includes a method of processing a 
disbursement. This method comprises transmitting by an accumulator agency 
disbursement information to an intermediary; receiving at the accumulator 
agency disbursement transaction information from the intermediary 
regarding authorization for a disbursement as an addendum transaction; and 
executing the disbursement to a recipient. 
Additional aspects of the invention are disclosed and defined by the 
appended claims. It is to be understood that both the foregoing general 
description and the following detailed description are exemplary and 
explanatory and are intended to provide further explanation of the 
invention as claimed.

DESCRIPTION OF THE PREFERRED EMBODIMENTS 
Introduction 
The system of a preferred embodiment of the invention avoids the 
inefficiencies and shortcomings of the prior art payment and disbursement 
methodologies by integrating the collection of payment and disbursement 
information by an employer and transmitting the information to an 
accumulator agency. The accumulator agency then processes the payment as a 
debit-based transaction and processes the disbursement as an 
addendum-based transaction. In this system, all parties benefit: the payor 
benefits by the availability of a simple method for payment and 
disbursement processing through an employer, the employer benefits by a 
fast and inexpensive method for transmitting payments and disbursements 
from an employee to a recipient, and the recipient benefits from the 
timely transmittal and receipt of a payment. The system is also beneficial 
to disbursement processors because the system allows for efficient 
transmittal of disbursement information without payment overhead. 
A preferred system consistent with the invention comprises several 
components, including a collector, an accumulator agency, and an 
intermediary/recipient. From an initiator, the collector receives payment 
and disbursement information, which is initially stored at the collector. 
The collector maintains a database of payment and disbursement information 
pursuant to each initiator. The accumulator agency serves as a processing 
station between the collector and the recipient/intermediary. The 
accumulator agency receives the payment and disbursement information from 
the collector, verifies the validity of the information, and if valid, 
further processes the payment and disbursement. For payment processing, 
the accumulator agency transmits payments as debitbased transactions. For 
disbursement processing, the accumulator agency transmits disbursements as 
addendum-based transactions. 
System 
FIG. 1 shows a payment and disbursement system according to one embodiment 
of the present invention. System 100 includes initiator 110, collector 
120, accumulator agency 130, debit-based payment processing 140, and 
addendum-based disbursement processing 150. Initiator 110, which is 
preferably an employee seeking to initiate a permissive payment and 
disbursement or an employee subject to a mandatory payment and 
disbursement, transacts with collector 120, which is preferably an 
employer. Collector 120 receives the payment and disbursement information 
from initiator 110, and collector 120 records the information in a 
database and transmits the information to accumulator agency 130. 
Accumulator agency 130 verifies and processes the payment and disbursement 
information. For payment processing, accumulator agency 130 transmits the 
payment according to debit-based payment processing 140. Debit-based 
payment processing 140 incorporates financial processing information. For 
disbursement processing, accumulator agency 130 transmits disbursement 
information according to addendum-based disbursement processing 150. 
Addendum-based disbursement processing 150 incorporates the non-financial 
information contained within the addendum. 
FIG. 2 illustrates an embodiment of a debit-based payment processing system 
consistent with system 100 shown in FiG. 1. As shown in FIG. 2, 
debit-based payment processing system 200 includes collector 120, 
accumulator agency 130, accumulator agency's bank 210, automated clearing 
house (ACH) 220, collector's bank 230, interriediary/recipient's bank 240, 
and intermediary/recipient 250. As described in FIG. 1, collector 120 
receives the payment and disbursement information, records the information 
in a database, and then transmits the information to accumulator agency 
130. The transmission of this information occurs in the form of an 
addendum-based financial electronic data interchange (FEDI) file. 
Electronic data interchange (EDI) describes the computer to computer 
exchange of information from one entity to another using electronic 
communication, and electronic funds transfer (EFT) describes the exchange 
of an electronic payment using electronic communication. FEDI is a 
combination of an EDI disbursement information with an EFT electronic 
payment. Accumulator agency 130 receives the FEDI file, verifies the 
validity of the information in the file, and then records the information 
in a database. Following the validation of the FEDI file, accumulator 
agency 130 segregates the payment information and the disbursement 
information from the FEDI file. Accumulator agency 130 then sends the 
payment information to debit-based payment processing 140 and the 
disbursement information to addendum-based disbursement processing 150. 
For the processing of the payment according to FIG. 2, accumulator-agency 
130 transmits an EDI addendum to intermediary/recipient 250, with data 
indicating that a payment has been made. Also, accumulator agency 130 
transmits an EFT transaction to accumulator agency's bank 210. Notably, 
accumulator agency 130 may transmit any number of EFT transactions to 
accumulator agency's bank 210 for processing. For example, if a payment is 
due to an intermediary/recipient from 500 entities, accumulator agency 130 
may transmit all 500 payments as one EFT transaction to accumulator 
agency's bank 210 for processing. In so doing, accumulator agency 130 not 
only utilizes an efficient means of transmitting an EFT transaction but 
also saves transaction costs by using a single EFT transaction. For 
example, accumulator agency 130 could transmit this single EFT transaction 
containing 500 payments using the CTX format, which provides for up to 
9,999 payments. 
Once accumulator agency's bank 210 receives the EFT transaction from 
accumulator agency 130, accumulator agency's bank 210 must process each of 
the individual debit-based transactions contained within the EFT 
transaction. Like accumulator agency 130, accumulator agency's bank 210 
may also use various EFT formats for processing multiple payments through 
ACH 220. ACH 220 is a clearing house for processing financial transactions 
through the Federal Reserve system, such as, for example, the National 
Automated Clearinghouse Association (NACHA). 
Following transmission of the payment information to ACH 220, ACH 220 then 
processes the debit-based transactions initiated by accumulator agency's 
bank 210. Because these transactions are debit-based transactions, ACH 220 
performs merely two transactions. First, ACH 220 issues a debit against 
the payor of the payment, and second, ACH 220 issues a credit to the 
recipient of the transaction. Thus, for the debit-based transactions 
initiated by accumulator agency's bank 210, ACH 220 initiates a debit 
transaction to collector's bank 230 and a credit transaction to 
intermediary/recipient's bank 240. Again, like collector 120 and 
accumulator agency 130, ACH 220 may utilize various EFT formats for 
multiple transmissions of these electronic transactions. Once ACH 220 has 
completed these transactions, payment processing has occurred, as 
intermediary/recipient 250 has received payment in 
intermediary/recipient's bank 240 from collector 120. 
FIG. 3 illustrates an embodiment of an addendum-based disbursement 
processing system consistent with system 100 shown in FIG. 1. As shown in 
FIG. 3, addendum-based disbursement processing system 300 includes 
intermediary 310, accumulator agency 130, disbursement 320, paper check 
322, direct deposit 324, debit deposit 326, and recipient 330. As 
described in FIG. 1, collector 120 receives payment and disbursement 
information from initiator 110, records the information in a database, and 
then transmits the information to accumulator agency 130. The transmission 
of payment and disbursement information occurs via a FEDI file. Once 
accumulator agency 130 receives the FEDI file, and following verification, 
accumulator agency 130 records the information in a database and 
segregates the payment and the disbursement from the FEDI file. 
Accumulator agency 130 then processes the disbursement information 
according to addendum-based disbursement processing 150. 
For the processing of the disbursement according to FIG. 3, intermediary 
310 initially receives an EDI file from accumulator agency 130, as shown 
in FIG. 2. This EDI file contains information relating to the payment made 
by initiator 110 and requests instructions regarding the disbursement. 
Intermediary 310 then processes the information and determines whether a 
disbursement is to be made. If a disbursement is approved by intermediary 
310, intermediary 310 transmits another EDI file to accumulator agency 130 
with instructions for the disbursement. Accumulator agency 130 then 
processes disbursement 320. Disbursement 320 may include any of a number 
of several disbursement methods, including paper check 322, direct deposit 
324, and debit deposit 326. Accumulator agency 130 processes paper check 
322 by the traditional methodology, by printing and mailing the check to 
recipient 330. Accumulator agency 130 processes direct deposit 324 also 
through the traditional methods, by issuing the deposit by EFT. 
Accumulator agency 130 processes debit deposit 326 through any number of 
available options by issuing an EFT, including the creation of a debit 
deposit at a bank operated by a state agency or the creation of a debit 
deposit account at a bank operated by accumulator agency 130. Whatever the 
methodology for disbursement, according to system 300, disbursement 320 
processes a disbursement to recipient 330 according to instructions 
provided to accumulator agency 130 from intermediary 310. 
FIG. 4 illustrates a preferred embodiment for a payment and disbursement 
system according to the present invention. System 400 depicts a payment 
and disbursement system for transmitting child support obligations from a 
non-custodial to a custodial parent through an employer. Of course, one 
skilled in the art will realize many alternative applications for this 
system. 
As shown in FIG. 4, system 400 anticipates that initiator 110 (in the case 
of the preferred embodiment, an employee) has already initiated a payment 
and disbursement. System 400 thus shows three alternatives for collector 
120 (shown here as employer 410) for initiating a payment and disbursement 
consistent with the invention. Employer 410 depicts alternative ways that 
an employer can initiate a payment and disbursement for an employee, 
illustrated as employer 412, employer 414, and employer 416. Employer 412 
has only one employee subject to a child support obligations, employer 414 
has 200 employees subject to child support obligations, and employer 416 
also has 200 employees subject to child support obligations. In the case 
of employer 412, the FEDI file transmitted from employer 412 to 
accumulator agency 130 comprises the CCD+ format. As noted above, the CCD+ 
format provides for an EFT transaction plus an addendum, but the CCD+ 
format is limited to one addendum per transaction. Thus, employer 414 also 
utilizes the CCD+ format, but due to the limitations of this EFT format, 
employer 414 would be required to use 200 separate FEDI transactions in 
the CCD + format. In contrast, employer 416 transmits all 200 transactions 
utilizing the CTX format. As noted above, the CTX format allows for the 
transmission of a payment with up to 9,999addenda records. Employer 416 
therefore saves both time and expense by using the CTX format. Whatever 
the format, once employer 410 transmits the necessary FEDI files, 
accumulator agency 130 receives the FEDI files from employer 410 and 
processes the payment and disbursement transactions. 
For payment processing according to system 400, accumulator agency 130 
transmits an EDI transaction to state 460 and an EFT transaction to 
accumulator agency's bank 210. The EDI transaction from accumulator agency 
130 to state 460 indicates that a payment has been made. The EFT (or FEDI) 
transaction from accumulator agency 130 to accumulator agency's bank 210 
contains the payment information to initiate a payment from initiator 110 
(that is, a non-custodial parent) to recipient 330 (that is, custodial 
parent 480). As depicted in system 400, state 460 comprises state A 462, 
state B 464 and state C 466. System 400 contains three representations of 
state 460 for purposes of describing three alternatives for payment and 
disbursement processing. For similar reasons, system 400 contains three 
representations of state bank 470, including state A's bank 472, state B's 
bank 474, and state C's bank 476, and accordingly, system 400 contains 
three representations of custodial parent 480, including custodial parent 
A 482, custodial parent B 484, and custodial parent C 486. 
Continuing with payment processing according to system 400, accumulator 
agency's bank 210 receives the payment information from accumulator agency 
130 and processes the payment via ACH 220 as a debit-based transaction. In 
processing the debit-based transaction, ACH 220 issues a debit against 
employer's bank 440 and issues a credit to state bank 470. In this maimer, 
the payment is completed from initiator 110, or the non-custodial parent, 
to state 460 via employer 410 for the benefit of recipient 330, or 
custodial parent 480. The particular steps associated with the processes 
of payment processing are described in connection of FIGS. 10-16. 
For disbursement processing according to system 400, state 460 issues an 
EDI transaction to accumulator agency 130, authorizing a disbursement to 
custodial parent 480. Accumulator agency 130 then processes the 
disbursement 320 according to one of three methods, paper check 322, 
direct deposit 324, or debit deposit 326. As shown in FIG. 4, for a 
disbursement by paper check, state A 462 transmits an EDI file to 
accumulator agency 130, authorizing a disbursement to custodial parent A 
482. Accumulator agency 130 then prints and issues a check directly to 
custodial parent A 482. For a disbursement by direct deposit, state B 464 
issues an EDI file to accumulator agency 130, authorizing a disbursement 
to custodial parent B 484. Accumulator agency 130 then issues an EFT 
transaction to accumulator agency's bank 210, authorizing a direct deposit 
to custodial parent B 484. Accumulator agency's bank 210 issues an EFT 
transaction to ACH 220, initiating a direct deposit to custodial parent B 
484. Based on this instruction for a direct deposit, ACH 220 issues a 
debit transaction against state B's bank 474 and issues a credit 
transaction to custodial parent B's bank 490, for the benefit of custodial 
parent B 484. For a disbursement by debit deposit, state C transmits an 
EDI to accumulator agency 130, authorizing a debit deposit to custodial 
parent C 486. Accumulator agency 130 transmits an EFT transaction to 
accumulator agency's bank 210, authorizing the creation of a debit deposit 
account to the benefit of custodial parent C 486. Accumulator agency's 
bank 210 issues an EFT transaction to ACH 220, providing for the creation 
of a debit deposit in state C's bank 476. Once a debit deposit is created 
in state C's bank 476, custodial parent C 486 may access the account and 
receive the disbursement. The particular steps associated with the 
processes of disbursement processing are described in connection with 
FIGS. 17-21. 
In the payment and disbursement system described in FIG. 4, it should be 
noted that all the designations are exemplary. One skilled in the art 
would be able to recognize various implementations of system 400. For 
example, the reference to a state does not limit the scope of this 
invention to a state of the United States, but in the context of the 
preferred embodiment, the reference may apply to any local, regional, 
federal, or international governmental entity. In other embodiments, 
moreover, the reference to a state could even apply to a nongovernmental 
entity, such as, for example, a mutual fund, a bill payment center, or any 
other commercial entity. Indeed, all the designations in system 400 entail 
such broad applications in the context of payment and disbursement 
processing. 
FIG. 5 illustrates one embodiment of collector 120 used in system 100 shown 
in FIG. 1. As shown in FIG. 5, collector 120 preferably includes collector 
terminal 500 equipped with conventional hardware, including central 
processing unit (CPU) 510, random access memory (RAM) 512, display memory 
514, video interface circuit (VIC) 516, input/output controller (I/O) 518, 
data storage device (disk) 520, input device 530, display 540, external 
device 550, and optional network interface 560. Collector terminal 500 
basically functions as a conventional data processor. 
As shown in FIG. 5, CPU 510 is directly coupled to each of the other 
elements of collector terminal 500. CPU 510 executes program code (not 
shown) stored in one or more RAM 512 or disk 520 to carry out the 
functions and acts described in connection with collector terminal 500. 
CPU 510 preferably comprises at least one high-speed digital data 
processor adequate to execute program modules consistent with the 
invention, such as accumulation of a payment and disbursement, 
transmission of a payment and disbursement, and the processing and 
completion of a payment and disbursement. The processes performed by these 
modules are described in connection with FIGS. 10-21. CPU 510 interacts 
with RAM 512 and disk 520 to execute stored program code according to 
conventional data processing techniques. 
As also shown in FIG. 5, input device 530 permits collector terminal 500 to 
receive payment and disbursement information about initiator 110 and, 
although shown as a single device, may comprise one or more data input 
devices of various types, such as an alphanumeric keyboard, a numeric 
keypad, a bar code scanner, a credit card reader, a disk drive, a memory, 
an electronic communication line, and a wireless transceiver. Input device 
530 preferably transmits received information to CPU 510 for storage in 
disk 520. VIC 516 comprises a video driver sending signals to display 540 
displaying either text or graphics based on the contents of display memory 
514. Display 540 is preferably large enough to display information 
relating to payment and disbursement processing for initiators 110. 
External device 550 allows operability of other components with collector 
120, such as, for example, a modem, a printer, a scanner, a photocopying 
device, or any other form of input or output device. Optional network 
interface 560 links CPU 510 to allow communication with other collector 
devices, such as multiple collector terminals 500. 
As shown in FIG. 5, disk 520 preferably comprises a large capacity memory 
capable of maintaining FEDI file database 522 and EDI addenda database 
524. FEDI file database 522 contains data pertaining to payment and 
disbursement information accumulated from initiators 110. The contents of 
FEDI file database 522 are transmitted to accumulator agency 130 for 
processing. EDI addenda database 524 contains the disbursement information 
from FEDI file database 522. Data contained in one or more of these 
databases 522 and 524 may be periodically updated from collectors 120 via 
input device 530, external device 550, or optional network interface 560. 
Samples of the records and their respective fields contained in databases 
522 and 524 are shown in and described in connection with FIGS. 8A-8B and 
9A-9B. 
FIG. 6 illustrates one embodiment of accumulator agency 130 used in system 
100 shown in FIG. 1. Accumulator agency 130 preferably comprises 
accumulator agency server 600 equipped with conventional hardware, 
including CPU 610, RAM 612, display memory 614, VIC 616, I/O 618, disk 
620, input device 630, display 640, external device 650, and optional 
network interface 660. In general, elements of accumulator agency server 
600 common to collector terminal 500 preferably operate in substantially 
the same manner as described above. Because accumulator agency server 600 
may service one or more external devices 650, accumulator agency server 
600 is preferably capable of interfacing with one or more collector 
terminals 500. Alternatively, accumulator agency server 600 130 may also 
interface with one or more collector terminals 500 via optional network 
interface 660. 
As shown in FIG. 6, disk 620 preferably comprises a large capacity memory 
capable of maintaining FEDI file database 622, EFT debit database 624, and 
EDI addenda database 626. FEDI file database 622 contains data pertaining 
to the payment and disbursement information transmitted by collector 
terminals 500. Indeed, FEDI file database 622 contains data corresponding 
to FEDI file database 522. EFT debit database 624 contains the payment 
information from FEDI file database 622. EDI addenda database 626 contains 
the disbursement information from FEDI file database 622. Data contained 
in one or more of these databases 622, 624, and 626 may be periodically 
obtained and updated from collector terminals 500 via external device 650 
or optional network interface 660. Samples of the records and their 
respective fields contained in databases 622, 624, and 626 are shown in 
and described in connection with FIGS. 8A-8B and 9A and 9B. 
FIG. 7 illustrates one embodiment of intermediary/recipient 250 used in 
system 200 shown in FIG. 2. Intermediary/recipient 250 preferably 
comprises intermediary/recipient terminal 700 equipped with conventional 
hardware, including CPU 710, RAM 712, display memory 714, VIC 716, I/O 
718, disk 720, input device 730, display 740, external device 750, and 
optional network interface 760. Again, elements of intermediary/recipient 
terminal 700 common to collector terminal 500 or accumulator agency server 
600 preferably operate in substantially the same manner as described 
above. External device 750 or optional network interface 760 allows 
connectivity of intermediary/recipient terminal 700 to external computers 
or networks. In a preferred embodiment, one such external computer is 
accumulator agency server 600. 
As shown in FIG. 7, disk 720 maintains EDI addenda database 721, EFT credit 
database 723, disbursement database 725, initiator database 727, and 
recipient database 729. EDI addenda database 721 contains the addendum 
information transmitted by accumulator agency server 600. Indeed, EDI 
addenda database 721 contains data corresponding to EDI addenda database 
626. EFT credit database 723 contains the credit transactions transmitted 
from ACH 220. Disbursement database 725 contains information designating 
whether a disbursement will be authorized and transmitted to accumulator 
agency server 600. Initiator database 727 contains a listing of authorized 
initiators for payment transactions. Recipient database 729 contains a 
listing of the authorized recipients for the receipt of disbursements. 
Samples of the records and their respective fields contained in databases 
721, 723, 725, 727, and 729 arc shown in and described in connection with 
FIGS. 8A-8B and 9A-9B. 
Database Formats 
Samples of the contents of FEDI file database 522, EDI addenda database 
524, FEDI file database 622, EFT debit database 624, EDI addenda database 
626, EDI addenda database 721, EFT credit database 723, disbursement 
database 725, initiator database 727, and recipient database 729 are shown 
in FIGS. 8A-8B and 9A-9B. The specific data and fields illustrated in 
these figures represent only one embodiment of the records stored in the 
databases consistent with the invention. In most cases, the fields shown 
in FIGS. 8A-8B and 9A-9B are relatively straight forward and 
self-explanatory. In addition to the disclosed databases, the data and 
fields of these databases, as well as the number of databases, can be 
readily modified from the described embodiments, for example, to include 
more or fewer data fields. 
FEDI file database 522 maintained in collector terminal 500 contains a 
listing of information relating to payments and disbursements for use by 
collector terminal 500. FIGS. 8A and 8B illustrate a sample of the 
contents of FEDI file database 522, with FIG. 8A depicting a sample of the 
contents of a FEDI file in the CCD format and FIG. 8B depicting a sample 
of a FEDI file in the CTX format. 
As shown in FIG. 8A, using the CCD format, FEDI file database 522 contains 
eleven fields with data element names corresponding to, for example, 
record type code, transaction code, receiving depository financial 
institution (DFI) identification, check digit, DFI account number, amount, 
identification number, receiving company name, discretionary data, addenda 
record indicator, and trace number. FIG. 8A also indicates the attributes 
of each field. After the field row and the data element name row, the 
field inclusion requirement row indicates the requirements for each of the 
eleven fields, "M" indicating a mandatory element, "R" indicating a 
required element, and "O" indicating an optional element. The contents row 
indicates a sample stricture for the contents of each field, and the link 
row indicates the length of characters available for each field. Finally, 
the position row indicates the position of the data element in the 
database record. The CCD format allows a database record of 94 characters. 
For field 1, located at position 01-01, record type code allows a single 
character, which the example shows as a "6." 
For field 2, located at position 02-03, transaction code encompasses two 
characters, which the example shows as requiring a numeric form. 
For field 3, located at position 04-11, receiving DFI identification 
provides for 8 characters, which the example depicts in the form, 
"TTTTAAAA." 
For field 4, located at position 12-12, check digit encompasses a single 
character, which the example shows as requiring a numeric form. 
For field 5, located at position 13-39, DFI account number entails 17 
characters, which the example shows as allowing any alphanumeric form. 
For field 6, located at position 30-39, amount provides for a character 
length of 10, which the example shows as $$$$$$$$.cent..cent. (thus, 
allowing a numerical entry of 999,999.99 or below). 
For field 7, located at position 40-54, identification number spans 15 
characters, which the example shows as allowing any alphanumeric form. 
For field 8, located at position 55-76, receiving company name encompasses 
22 characters, which the example shows as allowing any alphanumeric form. 
For field 9, located at position 77-76, discretionary data involves only 2 
characters, which the example shows as allowing any alphanumeric form. 
For field 10, located at position 79-79, addenda record indicator allows a 
single character, which the example shows as requiring a numeric form. 
For field 11, located at position 80-94, trace number encompasses a number 
of up to 15characters, which the example shows as requiring a numeric 
form. 
As shown in FIG. 8B, using the CTX format, FEDI file database 522 may also 
contain thirteen fields with data element names corresponding to, for 
example, record type code, transaction code, receiving DFI identification, 
check digit, DFI account number, total amount, identification number, 
number of addenda records, receiving company name/ID number, reserved, 
discretionary data, addenda record indicator, and trace number. The CTX 
format also allows a database record of 94characters. Indeed, the 13 
fields of FIG. 8B correspond to the fields described in FIG. 8A, except 
that FIG. 8B contains two additional fields, namely, number of addenda 
records (field 8) and reserved (field 10). For field 8, located at 
position 55-58 of the addenda for the CTX format, number of addenda 
records encompasses 4 characters, which the example shows as requiring a 
numeric form; for field 10, located at position 75-76 of the addenda for 
the CTX format, reserved provides for 2 characters, which the example 
indicates as "blank" due to the reserved status of this field. Otherwise, 
the fields of the CTX format correspond exactly to the fields of the CCD 
format. Indeed, both the CTX format and the CCD format contain 94 
characters. Accordingly, FEDI file database 522 contains fields 
corresponding to either the CCD or CTX format, and in either case, the 
number of characters in the database for each record does not exceed 94. 
Notably, FIGS. 8A and 8B only depict the fields for the EFT-portion of the 
FEDI file. Accordingly, these fields for the CCD and CTX formats operate 
according to the Operating Rules and Guidelines of the National Automated 
Clearinghouse Association (NACHA), hereby incorporated by reference. 
Also maintained in collector terminal 500, EDI addenda database 524 
contains a listing of the information relating to disbursements either 
authorized by or required from initiators 110. As shown in FIGS. 8A and 
8B, the addenda record indicator (field 10 for CCD, field 12 for CTX) 
designates the presence or absence of an addenda record in an FEDI file. 
If this flag is positive, FIG. 9A illustrates a sample of the contents of 
such an addenda record. As shown in FIG. 9A, an addenda record contains 
five fields with data element names corresponding to, for example, record 
type code, addenda type code, payment related information, addenda 
sequence number, and entry detail sequence number. The row structure of 
the addenda record depicted in FIG. 9A corresponds to the structure and 
contents of the rows in FIGS. 8A-8B. Of the five fields shown in FIG. 9A, 
payment related information (field 3) contains the pertinent disbursement 
information, in the context of EDI addenda database 524. 
FIG. 9B illustrates a sample of the contents of EDI addenda database 524, 
in its preferred implementation of a payment and disbursement processing 
system for child support payments. As shown in FIG. 9B, EDI addenda 
database 524 contains records having fields with segment identifiers for 
deductions (DED) corresponding to, for example, application identifier 
DEDO1, case identifier DED02, pay date DED03, payment amount DED04, 
non-custodial parent social security number DED05, medical support 
indicator DED06, non-custodial parent name DED07, FIPS code DED08, an 
employment termination indicator DEDO9. Therefore, as shown in FIG. 9B, 
the addenda record for a child support payment contains nine segment 
identifiers. 
Application identifier DED01 indicates the type of deduction being withheld 
from an employee's pay. 
Case identifier DED02 is the case number or court order number that the 
child support receiving agency uses for the processing of payments and 
disbursements. 
Pay date DED03 indicates the pay date or the date of income withholding 
from the non-custodial parent. 
Payment amount DED04 indicates the amount of withholding from the pay of 
the non-custodial parent, which is paid to the child support receiving 
agency. 
Non-custodial parent social security number DED05 provides the child 
support receiving agency with the social security number of the 
non-custodial parent. 
Medical support indicator DED06 indicates whether the non-custodial parent 
has family medical insurance available through his or her employer. 
Non-custodial parent name DED07 indicates the first seven letters of the 
last name of the non-custodial parent followed by at least three of the 
first three letters of his or her first name. 
Federal information process standard (FIPS) code DED08 refers to the code 
used by the child support entity receiving the transaction, usually 
indicating the state and county of the child support entity. 
Employment termination indicator DED09 is used to indicate to the child 
support enforcement agency that the non-custodial parent's employment has 
been terminated. 
For the contents of an EDI addendum for child support payment and 
disbursement, FIG. 9B also indicates the mandatory and permissive 
attributes of each field. Attribute column 1 indicates the field 
requirement, "M" indicating a mandatory element and "O" indicating an 
optional element. Attribute column 2 indicates the data type, including 
"AN" for string type data, "DT" for date type data, "ID" for identifier 
data from a predefined list of values, and "N2" indicating a numeric type 
data with two decimal places to the right of a fixed decimal point 
(indicating a financial amount). Attribute column 3 indicates the 
minimum/maximum allowable length for the element, for example, 
1/20indicates a minimum of one character and a maximum of 20 characters. 
Of course, the example of the addenda requirements for a child support 
payment and disbursement are only one implementation of a system 
consistent with the present invention. Other implementations for payment 
and disbursement processing may also be used, such as, for example, 
alimony payments, payments on a judgment, payments on an attachment, tax 
payments, or even permissive payments, such as, for example, payments for 
investments or a mutual fund, payments upon a loan, or any other form of 
private or commercial obligation. 
FEDI file database 622 maintained in accumulator agency server 600 contains 
a listing of information corresponding to FEDI file database 522. FEDI 
file database 622 contains those FEDI files transmitted to accumulator 
agency server 600 by collector terminals 500. Following transmission of 
these FEDI files, accumulator agency server 600 then validates the 
information, and if valid, segregates the EFT information from the EDI 
information. EFT debit database 624 contains the EFT information obtained 
from FEDI file database 622, and EDI addenda database 626 contains the EDI 
information obtained from FEDI file database 622. As described above, 
FIGS. 8A and 8B show samples of EFT information, and FIGS. 9A and 9B show 
samples of EDI information. EFT debit database 624 and EDI addenda 
database 626 contain information consistent with that shown in and 
described in connection with FIGS. 8A-8B and 9A-9B. 
EDI addenda database 721 maintained in intermediary/recipient terminals 700 
contains a listing of disbursement information corresponding to the EDI 
information transmitted to intermediary/recipient terminal 700 from 
accumulator agency server 600, which was transmitted to accumulator agency 
server 600 from collector terminals 500. EDI addenda database 721 contains 
information similar to that contained within EDI addenda database 524 and 
EDI addenda database 626. FIGS. 9A and 9B show samples of EDI information. 
Intermediary/recipient terminal 700 receives EDI transactions into EDI 
addenda database 721 from accumulator agency server 600 in order to 
process disbursements according to the information contained within the 
EDI addenda. 
EFT credit database 723 maintained in intermediary/recipient terminal 700 
contains information relating to payments processed through accumulator 
agency's bank 210 and ACH 220 for the purpose of later distribution and 
processing. In an implementation pertaining to child support, once 
initiator 110, or a non-custodial parent, has issued a payment through 
employer 410 to custodial parent 480, EFT credit database 723 indicates to 
intermediary/recipient terminal 700 (such as a terminal at a state child 
support agency) that the non-custodial parent has paid the obligation. 
Once the payment has occurred, intermediary/recipient terminal 700 may 
then authorize the disbursement to custodial parent 480. 
Disbursement database 725, initiator database 727, and recipient database 
729 maintained in intermediary/recipient terminal 700 enable authorization 
of disbursements pursuant to the information contained within EDI addenda 
database 721. Initiator database 727 contains a listing of the authorized 
initiators for payment processing, recipient database 729 contains a 
listing of the authorized recipients for disbursement processing, and 
disbursement database 729 contains a listing of disbursements authorized 
for processing. EFT credit database 723 thus indicates to disbursement 
database 725 whether a disbursement is authorized. Once a disbursement is 
authorized under disbursement database 725, intermediary/recipient 
terminal 700 transmits such authorization to accumulator agency server 
600. Disbursement database 725 may also contain a historical database of 
prior disbursements. In an implementation pertaining to child support, for 
example, initiator database 727 would contain a listing of initiators 110, 
or non-custodial parents, recipient database 729 would contain a listing 
of custodial parents 480, and disbursement database 729 would contain the 
information regarding payments due by the non-custodial parents to 
custodial parents for child support obligations. 
Process 
In processing a payment and disbursement from collector 120 (such as an 
employer) based on an obligation of initiator 110 (such as an employee), 
the system shown and described in connection with FIG. 1 preferably 
executes several distinct modules, or processes. These processes include 
facilitating the accumulation of a payment and disbursement at collector 
120 from initiator 110, transmitting the payment and disbursement 
information from collector 120 to accumulator agency 130, processing the 
payment via debit-based payment processing 140, and processing the 
disbursement via addendum-based disbursement processing 150. The steps 
associated with these processes are described in connection with FIGS. 
10-21 and can be performed in any order, unless otherwise specified or 
dictated by the steps themselves. 
In describing the processes consistent with the invention, various 
implementations of systems consistent with the invention are also 
described herein. For example, FIG. 10 illustrates a payment processing 
system consistent with the preferred embodiment of the invention as shown 
in FIG. 4. FIGS. 11 and 12 depict flow diagrams illustrating the series of 
steps performed by system 1000 as shown in FIG. 10. In initiating payment 
processing pursuant to the preferred embodiment, employer 410 (shown here 
as employers 412, 414, 416) receives a withholding order from initiator 
110 (here, a non-custodial parent/employee), authorizing employer 410 to 
withhold funds from salary regarding a child support obligation (step 
1110). If employer 410 receives a withholding order, the order will 
involve either a wage assignment income withholding or wage lien from a 
state agency or court ordering the withholding of funds from the salary of 
an employee pursuant to a child support obligation. Alternatively, an 
employee can also authorize an employer to withhold funds from his or her 
salary for a child support obligation. Whatever the form of authorization, 
once authorized, the employer converts the withholding obligation into a 
FEDI file (step 1120). This FEDI file may contain a payment with addendum 
information regarding disbursement in either the CCD or CTX formats. The 
FEDI file preferably is in the CTX format for greater efficiency and cost 
savings. Following the creation of the FEDI file, the employer then 
transmits the FEDI file to accumulator agency 130 (step 1130). 
Once accumulator agency 130 receives the FEDI file from employer 410 (step 
1202), accumulator agency 130 validates the FEDI transmission (step 1205). 
The validation of the FEDI transmission may include certification of the 
employer. In this certification process, accumulator agency 130 determines 
whether employer 410, which transmitted the FEDI file, is registered with 
accumulator agency 130. If employer 410 is not registered with accumulator 
agency 130, the FEDI file is rejected (step 1210). If employer 410 is 
registered with accumulator agency 130, employer 410 is certified and 
processing of the FEDI file continues. Note that this certification step 
is only one of many possible certification steps pursuant to methods 
consistent with the invention. Other certification steps may include, for 
example, validation of the data contained within the FEDI file. 
Following certification of the employer, accumulator agency 130 initiates 
two transmissions. On the one hand, accumulator agency 130 sends an EDI 
file to state 460 (shown here as state A 462, state B 464, and state C 
466) (step 1220). This EDI file indicates to state 460 that a payment has 
been made by initiator 110 (or, an employee) via employer 410. Once state 
460 receives the EDI file, state 460 uses the information contained within 
the addendum and updates its records pertaining to the payment by the 
employee (step 1230). On the other hand, accumulator agency 130 also 
periodically accumulates EFT files for subsequent transmission (step 
1240). Accumulator agency 130 preferably transmits EFT files by the use of 
a FEDI file. For example, using the CTX format, accumulator agency 130 can 
accumulate 9,999 EFT payment transactions for transmissions in a single 
FEDI file. Once accumulator agency 130 has created such a FEDI file, the 
file is transmitted to accumulator agency's bank 210 (step 1250). 
Upon receipt of the FEDI file from accumulator agency 130, accumulator 
agency's bank 210 processes the payment transactions (step 1260). If 
accumulator agency 130 transmitted a FEDI file, accumulator agency's bank 
210 segregates and processes the payments, but if accumulator agency 130 
transmitted a single EFT file, then accumulator agency's bank 210 simply 
processes the single payment transaction. Once accumulator agency's bank 
210 has accumulated and processed the payment transactions received from 
accumulator agency 130, accumulator agency's bank 210 then interacts with 
ACH 220. As done by accumulator agency 130, accumulator agency's bank 210 
may also utilize FEDI when transacting with ACH 220. Thus, accumulator 
agency's bank may periodically accumulate and transmit payment 
transactions in the form of a FEDI file in the CTX format to ACH 220 
Once ACH 220 receives the payment transaction information from accumulator 
agency's bank 210, ACH 220 processes the payments as debit-based 
transactions. Accordingly, ACH 220 processes the payments as debit-based 
transactions by transmitting a debit transaction to employer's bank 440 
(step 1280) and transmitting a credit transaction to state bank 470 (step 
1270), such as, state A's bank 472, state B's bank 474, and state C's bank 
476. Following the processing of these transactions by ACH 220, the 
payment obligation from employer's bank 440 is satisfied with regard to 
state 460, for example, including state 463, state 464 and state 466. 
Although the system and processes described by FIGS. 10-12 describe the 
preferred embodiment for the payment processing system shown in FIG. 4, 
other implementations are also available. FIG. 13, for example, 
illustrates an alternative embodiment for a payment processing system 
consistent with the invention. FIGS. 14-15 depict flow diagrams 
illustrating the series of steps performed by system 1300 as shown in FIG. 
13. Similar to system 1000 in FIG. 10 and the processes described in FIGS. 
11-12, system 1300 allows collectors 120 (shown here as collector 1312, 
collector 1314, and collector 1316) to transmit payment information to 
accumulator agency 130 in alternative methods (step 1410). In contrast to 
the system and methods described in FIGS. 10-12, the system and methods 
consistent with this embodiment do not limit collector 120 to an employer. 
Otherwise, system 1300 and the associated methods operate similarly as 
system 1000 and its associated methods. Collectors 120 create a FEDI file 
(step 1420) and transmit the FEDI file to accumulator agency 130 (step 
1430). Accumulator agency 130 then receives the FEDI file from collectors 
120 (step 1502) and performs certification (step 1505). 
If certification fails, the FEDI file is rejected (step 1510). If 
certification passes, accumulator agency 130 performs two steps. First, 
accumulator agency 130 sends an EDI file to intermediary/recipient 250 
(step 1520). Upon receipt of the EDI file, intermediary/recipient 250 
updates its records regarding the payment described in the EDI file (step 
1530). In contrast to the system and methods described in FIGS. 10-12, the 
system and methods consistent with this embodiment do not limit 
intermediary/recipient 250 to a state. However, to show that payment 
transaction can be processed to multiple recipients, system 1300 
distinguishes intermediary/recipients 1322, 1324, 1326. Second, 
accumulator agency accumulates EFT files from the FEDI files received from 
collectors 120 and periodically creates combined FEDI files for later 
transmission (step 1540). Accumulator agency 130 then transmits the FEDI 
file to accumulator agency's bank 210 (step 1550). Accumulator agency's 
bank 220 then receives the FEDI file from accumulator agency 130 and 
processes the payment as a debit-based transaction via ACH 220 (step 
1560). ACH 220 subsequently performs two transactions: ACH 220 processes a 
debit transaction to collector's bank 1310 (step 1580) and transmits a 
credit transaction to intermediary/recipient's bank 240, here designated 
as intermediary/recipient A's bank 1332, intermediary/recipient B's bank 
1334, and intermediary/recipient C's bank 1336 (step 1570). Following 
these transactions, the payment obligation from intermediary/recipient's 
bank 240 is satisfied with regard to intermediary/recipient 250, for 
example, including intermediary/recipient A 1322, intermediary/recipient B 
1324, and intermediary/recipient C 1326. 
As described above, the system and methods associated with FIGS. 13-15 
provide for a more dynamic payment processing system than the system and 
methods associated with FIGS. 10-12. The system and methods consistent 
herewith allow for payment processing of mandatory as well as permissive 
obligations. Also, the system and methods consistent herewith allow for 
payment processing from entities other than non-custodial parents, through 
entities other than states, and to entities other than custodial parents. 
FIG. 16 illustrates another alternative embodiment for a payment processing 
system consistent with the invention. Similar to system 1300, described in 
FIG. 13, system 1600 operates in the same manner as the system and methods 
disclosed in FIGS. 13-15, except system 1600 allows accumulator agency 130 
to transact directly with ACH 220. In short, system 1600 allows 
accumulator agency 130 to function as a bank. 
In system 1600, collectors 120 (here shown as collector 1312, collector 
1314, and collector 1316) transmits payment information to accumulator 
agency 130. Once accumulator agency 130 receives the FEDI file from 
collectors 120, following certification, accumulator agency 130 then sends 
an EDI file to intermediary/recipient 250, and accumulator agency 130 
sends an FEDI file to a ACH 220. Notably, in contrast to the system and 
methods described by FIGS. 10-15, the system and methods consistent with 
FIG. 16 allow accumulator agency 130 to transact directly with ACH 220. In 
this manner, accumulator agency 130 functions as a bank. Following the 
transactions between ACH 220 and accumulator agency 130, ACH 220 processes 
the payments as debit-based transactions. In so doing, ACH 220 processes a 
debit transaction to collector's bank 1310 and transmits a credit 
transaction to intermediary/recipient's bank 240. Like the system and 
methods consistent with the embodiment of the invention associated with 
FIGS. 13-15, the system and methods consistent with FIG. 16 also provide 
for a more dynamic payment processing system. By allowing accumulator 
agency 130 to transact directly with ACH 220, transaction steps are 
omitted that allow for a more efficient and thus timely processing of 
payments. Of course, the omission of this one step includes but one of 
many changes that can be made to the systems and methods for payment 
processing consistent with the invention. 
FIG. 17 illustrates a disbursement processing system consistent with the 
preferred embodiment of the invention as shown in FIG. 4. FIG. 18 depicts 
a flow diagram illustrating the series of steps performed by system 1700 
as shown in FIG. 17. In transacting disbursement processing pursuant to 
the preferred embodiment, state 460 (here shown as state A 462, state B 
464, and state C 466) computes the child support disbursement due to 
recipient 330 and transmits the disbursement information in an EDI file to 
accumulator agency 130 (step 1810). Accumulator agency 130 receives the 
EDI file from state 460 and processes the disbursement (step 1820). If the 
disbursement is a check (step 1825), accumulator agency 130 prints the 
check and transmits it directly to custodial parent 480 (step 1830). In 
system 1700, the issuance of a check by accumulator agency 130 is 
transmitted to custodial parent A 482. The issued check is drawn on the 
bank account of state 460. In system 1700, the check issued by accumulator 
agency 130 to custodial parent A 482 is drawn on state A's bank 472 (step 
1835). 
If the disbursement is not a check, accumulator agency 130 must process an 
electronic transaction for the disbursement (step 1840). To do so, 
accumulator agency 130 issues an EFT/FEDI transaction to accumulator 
agency's bank 210 (step 1842) and accumulator agency's bank then transmits 
the transaction to ACH 220 (step 1845). ACH 220 then transmits the 
EFT/FEDI transaction to state bank 470 (step 1850). If the EFT/FEDI 
transaction is for a direct deposit (step 1855), state bank 470 
subsequently issues a direct deposit via ACH 220 (step 1860). In system 
1700, the issuance of a direct deposit by accumulator agency 130 results 
in the transmission of a direct deposit to ACH 220. ACH 220 then processes 
the direct deposit to custodial parent B's bank 490. In so doing, ACH 220 
issues a debit transaction to state B's bank 474 (step 1866) and issues a 
credit transaction to custodial parent B's bank 490 (step 1867). Thereby, 
custodial parent B 484 receives a disbursement in the form of a direct 
deposit (step 1868). 
If disbursement is not by direct deposit, accumulator agency 130 processes 
the disbursement as a debit deposit (step 1870). In establishing a debit 
deposit, accumulator agency 130 has the option of where to locate the 
debit deposit account. In system 1700, accumulator agency 130 establishes 
the direct deposit account at state C's bank 476, by transmitting the 
debit deposit information via ACH 220. Thereby, custodial parent C 486 
receives the disbursement in the form of a debit account at state C's bank 
476 (step 1880). Alternatively, accumulator agency 130 can also establish 
a debit deposit account at accumulator agency's bank 210. Additionally, 
although not depicted in FIG. 18, the system and methods consistent with 
the preferred embodiment also contemplate the issuance of an invoice to 
custodial parent 480 for any disbursement (as indicated by the dotted line 
on FIG. 17). 
Although the system and processes described by FIGS. 17-18 describe the 
preferred embodiment for the disbursement processing system shown in FIG. 
4, other implementations are also available. FIG. 19, for example, 
illustrates an alternative embodiment for a disbursement processing system 
consistent with the invention. FIG. 20 depicts a flow diagram illustrating 
the series of steps performed by system 1900 as shown in FIG. 19. Similar 
to system 1700 in FIG. 17 and the processes described in FIG. 18, system 
1900 enables intermediary 310 to compute a payment due to recipient 330 
and to transmit the disbursement information in an EDI file to accumulator 
agency 130 (step 2010). In contrast to the system and methods described in 
FIGS. 17-18, the system and methods consistent with this embodiment do not 
limit intermediary 310 to a state. Otherwise, system 1900 and the 
associated methods operate similarly as system 1700 and its associated 
methods. Accumulator agency 130 receives the EDI file from intermediary 
310 and processes the disbursement (step 2020). If the disbursement is a 
check (step 2025), accumulator agency 130 prints the check and transmits 
it directly to recipient 330 (step 2030). Again, in contrast to the system 
and methods described in FIGS. 17-18, the system and methods consistent 
with this embodiment do not limit recipient 330 to a custodial parent. 
However, to show that multiple disbursement transaction can be processed 
to multiple recipients, system 1900 distinguishes recipient A 1932, 
recipient B 1934, and recipient C 1936. As indicated in system 1900, the 
issuance of a check by accumulator agency 130 is transmitted to recipient 
A 1932. The issued check is drawn on the bank account of intermediary A's 
bank 1912. In system 1900, the check issued by accumulator agency 130 
recipient A 1932 is drawn on intermediary A's bank 1912 (step 2035). 
If the disbursement is not a check, accumulator agency 130 must process an 
electronic transaction for the disbursement (step 2040). To do so, 
accumulator agency 130 issues an EFT/FEDI transaction to accumulator 
agency's bank 210 (step 2042) and accumulator agency's bank then transmits 
the transaction to ACH 220 (step 2045). ACH 220 then transmits the 
EFT/FEDI transaction to intermediary/recipient's bank 240 (step 2050). If 
the EFT/FEDI transaction is for direct deposit (step 2055), 
intermediary/recipient bank 240 subsequently issues a direct deposit via 
ACH 220 (step 2060). In system 1900, accumulator agency 130 issues a 
direct deposit to ACH 220, which results in the transmission of a direct 
deposit to intermediary B's bank 1914, which transacts with ACH 220 to 
process the direct deposit to recipient B's bank 1920. In so doing, ACH 
220 issues a debit transaction to intermediary B's bank 1914 (step 2066) 
and issues a credit transaction to recipient B's bank 1920 (step 2067). 
Thereby, recipient B 1934 receives a disbursement in the form of a direct 
deposit (step 2068). 
If disbursement is not by direct deposit, accumulator agency 130 processes 
the disbursement as a debit deposit (step 2070). Similar to the system and 
methods described in FIGS. 17-18, in establishing a debit deposit, 
accumulator agency 130 has the option of where to locate the debit 
account. In system 1900, accumulator agency 130 establishes the direct 
deposit account at intermediary C's bank 1916, by transmitting the direct 
deposit information via ACH 220. Thereby, recipient C 1936 receives the 
disbursement in the form of a debit account at intermediary C's bank 1916 
(step 2080). Alternatively, accumulator agency 130 can establish a debit 
deposit account at other locations, including accumulator agency's bank 
210. Finally, although not depicted in FIG. 20, the system and methods 
consistent with this embodiment also contemplate the issuance of an 
invoice to recipient 330 for any disbursement (as indicated by the dotted 
line on FIG. 19). 
As described above, the system and methods associated with FIGS. 19-20 
provide for a more dynamic disbursement processing system than the system 
and methods associated with FIGS. 17-18. The system and methods consistent 
herewith allow for disbursement processing for mandatory as well as 
permissive obligations. Also, the system and methods allow for 
disbursement processing from entities other than non-custodial parents, 
through entities other than states, and to entities other than custodial 
parents. 
FIG. 21 illustrates another alternative embodiment for a disbursement 
processing system consistent with the invention. Similar to system 1900 
described in FIG. 19, system 2100 operates in the same manner as the 
system and methods disclosed in FIGS. 19-20, except system 2100 allows 
accumulator agency 130 to transact directly with ACH 220. In short, system 
2100 allows accumulator agency 130 to function as a bank. 
In system 2100 intermediary 310 (here shown as intermediary A 1912, 
intermediary B 1914, and intermediary C 1916) computes the disbursement 
due to recipient 330 and transmits the disbursement information in an EDI 
file to accumulator 130. Accumulator agency 130 receives the EDI file from 
intermediary 310 and processes the disbursement. If the disbursement is a 
check, accumulator agency 130 issues the check consistent with the system 
and methods disclosed for system 1700 in FIGS. 19-20. 
If the disbursement is not a check, accumulator agency 130 processes an 
electronic transaction for the disbursement by issuing an EFT/FEDI 
transaction directly to ACH 220. Notably, in contrast to the system and 
methods described by FIGS. 17-20, the system and methods consistent with 
FIG. 21 allow accumulator agency 130 to transact directly with ACH 220. In 
this manner accumulator agency 130 functions as a bank. If the EFT/FEDI 
transaction is for a direct deposit, accumulator agency 130 issues a 
direct deposit via ACH 220. In system 2100, accumulator agency 130 issues 
a direct deposit to ACH 220, and in so doing, issues a debit transaction 
to accumulator agency 130 and issues a credit transaction to recipient B's 
bank 1920. Thereby, recipient B 1934 receives a disbursement in the form 
of a direct deposit. Alternatively, if the disbursement is not by direct 
deposit, accumulator agency 130 processes the disbursement as a debit 
deposit. In establishing a debit deposit, accumulator agency 130 
establishes a direct deposit account directly at accumulator agency 130. 
Thereby, accumulator agency 130 merely instructs recipient 1936 that a 
debit deposit account has been formed for its benefit. Although not 
depicted in FIG. 21, the system and methods consistent with this 
embodiment also contemplate the issuance of an invoice to recipient 330 
for any disbursement (as indicated by the dotted line on FIG. 21). 
Just as FIG. 16 describes a more dynamic payment processing system 
consistent with the invention by allowing accumulator agency 130 to 
function as a bank, the system and methods consistent with FIG. 21 enable 
the same advantages for a disbursement processing system. By allowing 
accumulator agency 130 to transact directly with ACH 220, transaction 
steps are omitted that allow for a more efficient and timely processing of 
disbursements. Of course, the omission of this one step includes but one 
of many changes that can be made to the systems and methods for 
disbursement processing consistent with the invention. 
CONCLUSION 
The systems consistent with the invention provide for more efficient and 
more economical methods for the processing of either or both payments and 
disbursements. The systems process payments using debit-based EFT and 
processes disbursements using addendum-based EDI. This improved payment 
and disbursement methodology provides many advantages over the current 
payment and disbursement technologies. 
As described above, it will be apparent to those skilled in the art that 
various modifications and variations can be made in the processes of the 
present invention without departing from the spirit and scope of the 
invention. Thus, it is intended that the present invention cover the 
modifications and variations of this invention, provided they come within 
the scope of the appended claims and their equivalents. In this context, 
equivalents means each and every implementation for carrying out the 
functions recited in the claims, even if not explicitly described herein.