SECURE CHECK PROCESSING SYSTEM AND METHOD

Abstract: An apparatus and a method for countering fraudulent check cashing and/or credit card transaction schemes includes a central processing center that is connected to a plurality of participating financial institutions and merchant establishments. Each check drawn or credit card transaction against the financial institutions has information stored therein, with that information corresponding to a plurality of digits/characters for the central processing center, a plurality of digits/characters for the financial institution for which the check is to be drawn against, and an account at the financial institution for which the check or credit card charge is to be drawn against. When a check is presented at a financial institution or merchant establishment, account information is sent through a secure communication channel to the central processing system, which determines whether or not the account has sufficient funds. If the check can be drawn against the account, the central processing system provisionally debits the account, so that all future requests to draw against the account will be checked against the current balance of the account, even though the check has not cleared through the financial institution system as yet. When a credit card is presented, the information on the credit card is sent to the central processing center, which determines whether the current credit card balance is sufficiently below the credit card limit to accept the pending credit card transaction. The central processing center is communicatively connected to a plurality of credit car institutions that provide it with current credit card balance information, and is optionally connected to a plurality of credit card accounts and checking accounts of the same party.

Description: SECURE CHECK PROCESSING SYSTEM AND METHOD Background of the Invention 1. Field of the Invention The present invention relates to a secure check and/or credit card processing system and method for lessening the possibility of check fraud committed against financial institutions. In particular, the present invention relates to a secure check processing system and method that utilizes a central processing or transaction center. Description of the Related Art Fraudulent banking and merchant transactions are a continual and costly problem for financial institutions and merchants, and one which they always try to combat. One fraudulent banking transaction involves a scheme whereby counterfeit checks, written on the same account, are cashed at several branches of the same financial institution, or at different financial institutions, at substantially the same time. The account on which each check is written has sufficient funds to cover only one of these checks. A similar type of fraudulent transaction may be performed at different merchant establishments at the same time. Each of the counterfeit checks is cashed by the respective branch at which it is presented, because the computer at each respective branch indicates sufficient funds in the account for the particular check being cashed. Once all of the checks have cleared a few days later, the financial institution has losses for the total of all but one of the checks. For large financial institutions, this type of fraud may amount to losses in the range of several millions of dollars per year, or perhaps more. One conventional system, described in U.S. Patent No. 4,747,050, issued to Bruno Brachtl et al., discloses the use of intelligent secure financial institution cards, which store a personal key and an account number for each user, and in which the user enters a personal identification number (PIN) that is not stored in the secure financial institution card, to enable an electronic funds transfer. However, such a system requires that the users remember their PINs, as well as requiring the users to have their secure financial institution card with them whenever a financial institution transfer is required. It would not prevent payees from cashing checks drawn on the payor's account. Another conventional system, described in U.S. Patent No. 4,109,238, issued to Robert Creekmore, involves the use of a positive check verification system. The check verification system includes a remote-located transaction processor, which » communicates with a number of local point-of-use terminals. The transaction processor includes a file of customers who are entitled to verify checks. Each check verifier has an identification card containing a unique number for each customer, and a personal customer code, which is not on the card, is also provided for manual entry into an input terminal by the customer. Check verification is then established, without the need to know the account balance of a particular account being drawn against. However, such a system has a drawback in that the check verifier must respond to a check request before the check can be verified at a point- of-use terminal, as well as requiring the customers to have the identification card with them when a financial institution transfer is being made. Also, such a system may not effectively counteract the fraudulent check cashing scheme described above. Summary of the Invention The present invention is directed to a method of verifying a check presented to one of a plurality of financial institutions and/or merchant establishments. The method includes a step of recording, on the check, information regarding an account against which the check is to be drawn, a financial institution having the account which is to be drawn against, and a central processing center. The method also includes a step of continuously storing, at the central processing center, current account information with respect to all accounts of the plurality of financial institutions. The method further includes a step of sending to the central processing center, through a communication channel connecting the one financial institution and the central processing center, the information regarding the one check presented at the one financial institution. The method still further includes a step of determining, at the central processing center, whether or not there are sufficient funds to cover the one check in the account against which the check is to be drawn. The method also includes either a step of provisionally debiting the account, and notifying the one financial institution that the check can be drawn against the account, once it is determined that sufficient funds are present in the account to cover the one check. The method further includes a step of notifying the one financial institution that the check cannot be drawn against the account if it is determined that insufficient funds are present in the account to cover the check. The present invention is also directed to an apparatus for determining whether a check can be drawn against a particular account against which the check is presented. The apparatus includes a central processing center having a memory for continuously storing information related to accounts of a plurality of financial institutions that are communicatively coupled to the central processing center. The apparatus also includes a plurality of communication channels respectively connecting the plurality of financial institutions with the central processing center. The apparatus further includes reading units in each of the plurality of financial institutions, the reading units configured to read the check presented at one of the plurality of financial institutions and to send information stored on the one check to the central processing center. The central processing center further includes a processor to determine, based on the stored information in the memory and the received information from the reading units, whether sufficient funds are present in the particular account to cover the one check. The processor is configured to send a pay authorization or a refusal to the one financial institution at which the one check was presented, depending on whether or not sufficient funds are present in the account to cover the check. In an alternative embodiment, the central processing center sends an inquiry to a respective financial institution that has the particular account, and receives information from the respective financial institution as to whether or not sufficient funds are present in the account to cover the check. In this alternative embodiment, much less information is needed to be stored at the central processing center with respect to the other embodiment. Brief Description of the Drawings The above-mentioned objects and advantages of the invention will become more fully apparent from the following detailed description when read in conjunction with the accompanying drawings, with like reference numerals indicating corresponding parts throughout, and wherein: Figure 1 shows one example of a location of information on a check that is used by a processing center, according to the present invention; Figure 2 shows a block diagram of a secure check processing system communicatively connected to financial institutions and merchant establishments, according to a first or second embodiment of the present invention; Figure 3 shows a block diagram of a central processing center according to the present invention; and Figure 4 shows a block diagram of a central processing center communicatively connected to credit card companies, financial institutions, and merchant establishments, according to a third or fourth embodiment of the present invention. Detailed Description of the Preferred Embodiments Preferred embodiments of the invention will be explained in detail below with reference to Figures 1-4. The present invention is directed to a system and a method for lessening the possibility of fraudulent banking and/or fraudulent merchant transactions, by the use of a national, regional, or international processing center that is accessible by computer to all banking establishments and merchant establishments participating in the system. In the present invention, a processing center will be assigned a unique numeric code of a plurality of digits. The number of digits for the unique code will be determined based on the number of processing centers in the system, as well as the security code utilized for the information transfer between financial institutions and merchant establishments and processing centers. In a preferred configuration of the first embodiment, which will be described in detail hereinbelow, only one processing center exists in the system. However, in alternative configurations of the first embodiment, other processing centers may co-exist, such that these processing centers have the capability to retrieve information from each other in a quick and easy manner, such as via the Internet or World Wide Web using encrypted data, or via dedicated lines or any remote signaling or transmission system communicatively connecting these processing centers to each other. As stated above, each processing center of the plurality of processing centers in the network has its own unique code. The use of several processing centers relieves the bottleneck that may occur if only one processing center is utilized, whereby each processing center may be assigned to a particular region (e.g., Southeastern United States, Western United States, Eastern United States, Midwestern United States) to obtain updated account balance information from participating financial institutions in that region. Each financial institution will have its own unique numeric code of a plurality of digits, with the number of digits of the unique code again depending on the total number of different financial institutions in the system, as well as the security code utilized. Also, each customer, or account, will have its own unique digital code of a plurality of digits, with the number of digits of the unique code depending upon the number of accounts in the financial institution that has the largest number of accounts, as well as the particular security code utilized. For example, a processing center may be assigned a five-digit number, e.g., 75432. A financial institution may be assigned a six-digit number, e.g., 987654 for Bank of America, or 987653 for Suntrust Bank. A customer or account may be assigned an eight-digit number, e.g., 98765432. If a customer has more than one account, each account is preferably assigned a different eight-digit number. However, for financial institutions that allow for money to be drawn against other of the customer's accounts or an overdraft line of credit when a particular account that is being drawn against does not have sufficient funds, all of those accounts may be assigned the same eight-digit number for purposes of check verification by the processing center. hi the system and method according to the first embodiment of the invention, all of the above-mentioned information will be provided on a check. For example, a check may have the following digits placed thereon: 98765432. . . 987654. . . 75432. The digits may be placed in any suitable location on the check, such as the front-bottom portion of the check or certain areas on the back of the check. The digits may be encoded onto the check in any of a variety of forms, such as, for example, a numeric format, a bar code format a magnetic strip (such as those used with credit cards) with data encoded therein, or any other types of visible or invisible means for encoding or labeling this data on the check. The bar code or magnetic strip format will allow for rapid, automatic processing of checks. With an optical character or other recognition device (OCR), the processing of a check with digits for the coded information may be performed as rapidly as a check having bar codes or magnetic strips for the coded information. The example given above uses numbers or digits for representing the information on the check, but other representations, such as letters or characters, e.g., ABC, #, %, $, or combinations of numbers, letters and characters, may also be utilized in order to uniquely identify a processing center, a financial institution, or an account. For example, 98765# or ABC may represent a particular financial institution, while 98765® or KNB may represent another particular financial institution. Also, as an optional feature for the present invention, each account will have a personal identification number (PIN) assigned to it, or a NAME code assigned to it, for added security measures. When a check is introduced for payment to any financial institution branch or any financial institution participating in the system, or when the check is presented at a merchant establishment (such as a grocery store, a department store, etc.), a bank teller or merchant employee enters the information, which is printed oh the check, into the computer. This entering of information may be done either manually or automatically with a device that is configured to read the coded information, such as a bar code scanner for reading bar codes, a magnetic strip reader for reading information on magnetic strips, an OCR device, and the like. Once the information on the check has been read, it is transmitted, via a computer located at the financial institution or merchant establishment where the check is being presented, to a computer at the processing center. The means of transfer may be by any of a number of ways, such as by a modem-to-modem hookup between the financial institution branch (or merchant establishment) and the processing center over a public switched telephone network, a wide area network connecting the financial institution branch with the processing center, an Internet connection, or the like. In a first embodiment, the processing center maintains an accurate and always current record of each account at each participating financial institution, as well as the current balance in that account. The processing center does not maintain any personal identification information, but only stores numbers or characters as an index to a current balance of a particular account. That way, a customer's privacy is maintained in the system and method according to the invention. In the first embodiment, the current balance information is preferably updated as soon as an account balance at a participating financial institution changes. That way, the possibility of fraud due to nearly-simultaneous transactions made at a plurality of locations is thwarted by the system and method according to the first embodiment. hi a second embodiment, the processing center stores a record of each account of each participatory financial institution, but does not store a current balance of each account. Instead, in the second embodiment, the processing center sends a current balance request to the financial institution from which the check is to be drawn against. Upon reception of information from that financial institution to the processing center concerning the current amount of funds available in the account from which the check is to be drawn against, the processing center notifies the financial institution branch or merchant establishment at which the check is being presented as to whether or not that check can be cashed. In the second embodiment, the processing center provides a data relay function between different financial institutions and financial institution branches of the same branch, and/or a merchant establishment, in a fast and effective manner. Also, in the second embodiment, the memory storage at the processing center is less than in the first embodiment, since account balances for all financial institution accounts using the system and method according to the invention is not stored at the processing center. In the first embodiment, once a computer at the processing center reads the received information sent from a first financial institution or a merchant establishment at which a check has been presented for cashing, the processing center determines whether there are sufficient funds in the account to be drawn against, and if so, the account is provisionally debited at the processing center until such time as the actual check clears the system through the Automated Clearing House (ACH) currently used by all financial institutions. In the second embodiment, once the processing center has read the received information sent from the first financial institution or merchant establishment, and then has sent an inquiry to a second financial institution having the account that is to be drawn against, and has received current account balance information from the second financial institution as a result of the inquiry, the processing center determines whether there are sufficient funds in the account to be drawn against. If there are sufficient funds in the account, the processing center notifies the second financial institution to provisionally debit the relevant account, even though the check has not cleared through the ACH. At the time of clearance through the ACH, in both the first and second embodiments, the provisional debit becomes a true debit on the account. However, for purposes of the processing center in the first embodiment and the participatory financial institutions in the second embodiment, a provisional debit is treated the same as an actual debit on an account. Such clearance can be either at the processing center or at a financial institution's own transaction center, so long as the processing center eventually gets the account balance from its participatory financial institutions. In this manner, any branch of a financial institution or any merchant establishment can make an instant assessment as to the availability of funds to cover a check that is presented at that financial institution. For example, assume an account #101 at Financial institution #5 has a balance of $1000. When customer A arrives at a Walmart store at 10:00 a.m. on May 15, 1998 with a check for $990 to be drawn against account #110 at Financial institution #5, that check will have information related to the account number (101), the financial institution number which maintains the account against which the check is to be drawn (5), and the processing center that is to receive that information. Such a check 50 is shown in Figure 1, with the pertinent information being read off the bottom-right-hand portion of the check 50. In Figure 1, the beginning digits 98765432 correspond to the pertinent account number (101), the middle digits 987654 correspond to Financial institution #5, and the ending digits 75432 correspond to the processing center. A cashier at the Walmart store enters the pertinent data (either manually or automatically) read from the check 50, and those data are sent immediately to the processing center. The digits (55317281101) shown on the bottom-left portion of the check 50 correspond to the information that is currently used by all financial institutions to route checks through the banking system. In the first embodiment, the processing center checks its stored to determine whether or not account #110 of Financial institution #5 has sufficient funds to cover this check, and provisionally debits account #110 in the amount of $990, leaving a provisional available balance of $10 (i.e., $1000 - $990 = $10). The processing center also sends back information to the Walmart store, informing the store that the check can be drawn against the relevant account. The total time for accomplishing this transaction is typically very short, and may only take from a few seconds up to a minute or so to complete. In the second embodiment, the processing center inquires at Financial institution #5 (that is, the financial institution issuing the check) as to the current balance in account #110. Based on the information sent to the processing center from Financial institution #5, the processing center informs the Walmart store as to whether or not the check can be cashed. If the check can be cashed, processing center notifies Financial institution #5 so that it can provisionally debit account #110. In the second embodiment, there is no checking of stored account balance information at the processing center, as is done in the other embodiment. Rather, the processing center sends requests to relevant financial institutions in order to determine current balances on accounts to be drawn against. Now assume another customer, customer B, arrives at Financial institution #12 at 10:05 a.m. on May 15, 1998 to try to cash a counterfeit check for $990 against account #110 of Financial institution #5. When a teller at Financial institution #12 either manually or automatically enters the data on the check, that information is sent immediately to the processing center. In the first embodiment, the processing center checks its stored information to determine that account #110 of Financial institution #5 does not have sufficient funds to cover this check, since account #110 of Financial institution #5 now has a provisional available balance of $10. The processing center sends back information to Financial institution #12, informing it that the check for $990 cannot be drawn against the relevant account. Other persons trying to draw against account #110 of Financial institution #5 will meet with the same fate. hi the second embodiment, the processing center inquires at Financial institution #5 as to the current balance in account #110. Based on the information sent to the processing center from Financial institution #5, in which Financial institution #5 informs the processing center that account #110 has been provisionally debited to $10, the processing center informs Financial institution #12 that the check for $990 cannot be drawn against the relevant account. The ability to centrally debit an account from any particular financial institution or merchant establishment based on a first presentation for cashing a check against that account, with the debiting being performed by a processing center that is accessible to all of the financial institutions via secure communication lines, allows for these financial institutions and/or merchant establishments to thwart certain types of fraudulent check cashing schemes. Figure 2 shows a structure of the system according to either the first or second embodiments of the invention. In Figure 2, Financial institutions and/or Merchant Establishments 1 - 10 are connected to Processing Center 21 via secure communication lines 11-20, respectively. The means of security can be by a variety of conventional methods, such as using a private key /public key system, or the like. Once a check is presented at any one financial institution or merchant establishment, say financial institution 1, for example, the processing center/financial institution/account number information stored on the check is read at financial institution 1, and is sent via the respective secure communication line 11 to the processing center 21. Referring now to Figure 2 and Figure 3, the processing center 21 has a bank of modems 30 to communicate with the financial institutions or merchant establishments 1 - 10 over the secure communication lines 11-20. The processing center 21 also has a memory 40. In the first embodiment, memory 40 stores information as to current account balances for accounts at each of the financial institutions 1 - 10. Based on that stored information as well as the received information over the secure communication line 11, a computer 35 at the processing center 21 determines whether the account that a check is drawn against has sufficient funds at the present time. That determination is sent to the pertinent financial institution over the corresponding secure " communication line (e.g., secure communication line 11 for financial institution 1), and the financial institution acts appropriately. In the second embodiment, memory 40 does not store information as to all current account balances, but only stores information as to account balances for accounts to be drawn against due to submission of checks against those accounts. In the second embodiment, the processing center 21 requests information as to those relevant accounts to be drawn against from the pertinent financial institutions via lines 11 - 20, and stores the received information in the memory 40. In the present invention, the processing center 21 has stored in the memory 40 information corresponding to account numbers and financial institutions. There is not stored any personal information in the memory 40, such as the name of a particular person who owns a particular financial institution account. That way, anonymity is maintained for all financial institution customers using the present invention. In the first embodiment, the financial institutions or merchant establishments 1 - 10 transmit information related to changes in their respective accounts to the processing center via communication lines 11-20 as soon as these changes take place. For example, if an account has a direct deposit made to it, that information is relayed to the processing center 21 immediately by the financial institution receiving the transfer of funds. , Similarly, if the account is to be debited by a particular amount, such as a financial institution customer withdrawing money from an account, that information is also immediately relayed to the processing center 21. Thus, the processing center 21 always has stored therein a current status of all accounts in the participating financial institutions or merchant establishments 1 - 10. In the second embodiment, this updating of information in the memory 40 is not required, since the processing center 21 will send a request to the pertinent financial institution for an account balance at the time a request from another financial institution or merchant establishment (at which a check has been presented for cashing) has been made. If an account holder or a financial institution branch or a merchant establishment needs to communicate with the processing center to fix a problem, such as when a customer claims an error in that the account surely must have enough funds to cover a particular check, then, in the present invention, the customer must provide his or her special PIN number or NAME code (e.g., mother's maiden name) for identification. Optionally, the customer may also hold a valid identification card bearing his or her picture and/or fingerprint, which can be used to authenticate the customer. The fingerprint could also be scanned by a fingerprint identification machine at the financial institution, if one is available, in order to determine the true identification of the customer desiring to cash a check. Although identification cards and fingerprint records can be counterfeited or stolen, in the present invention, the financial institution's exposure is limited to the balance in the account, and no more. Also, a computer at the processing center can be used to monitor the number of checks, frequency of check cashing, and location of presentation, with certain patterns setting off a signal requiring confirmation of the individual presenting the check. Thus, for example, if the previous one hundred checks (checks 1-100) drawn off a particular account were presented at financial institutions and/or merchant establishments in New Jersey, and if the next check (check 101) is presented to a financial institution in Las Vegas, then the information concerning the next check as weir as where it is presented, will be sent to the processing center. The processing center may then determine that a precise identification of the drawee is required, even though the account has sufficient funds for the check being presented to a financial institution in Las Vegas. This precise identification may be made by the above-mentioned fingerprint record or identification card that now has be presented by the drawee to a teller in the financial institution or a cashier in a merchant establishment in Las Vegas. Thus, the processing center may have computers programmed to require additional information from drawees for a variety of reasons, even when the check being presented for cashing can be accommodated by the account from which it is drawn against. Thus, in the example given above, even if the account has sufficient funds, the drawee in Las Vegas may still be required to show more detailed proof of his or her identity, due to the unusual transaction (based on prior history) of a withdrawal being made outside of New Jersey. The present invention allows for a financial institution check security system that codes all checks for verification, where the coded information from these checks are presented to a regional, national, or international financial institution processing center. By utilizing only the unique digits/characters for individual financial institutions and individual accounts to be mapped against data corresponding to current account balances, the processing center does not know or require personal information as to persons or corporations who own particular accounts. In the alternative configurations having regional or national processing centers that may operate with an international processing center, all transactions within the region or within the nation can be checked to ensure the integrity of checks presented within the particular region or the particular nation, but any transactions outside of that region or nation would not be known to the regional or national processing center. In those instances, the financial institution or merchant establishment outside the particular region must use other means to ensure that the check being presented is a valid one, and that the account that is being drawn against has sufficient funds. This may amount to that financial institution holding the check and not cashing it until such verification (such as by a telephone call from one financial institution to another financial institution) is made, if there is no processing center for that particular region in which the check is being presented. In a third embodiment, information regarding credit cards is interconnected via the central processing center described with respect to either the first or second embodiments. That way, the central processing center is connected to obtain access to a customer's credit card accounts, such as a VISA, MasterCard, or American Express accounts. That way, instead of having to contact a different phone number based on the credit card being submitted to a merchant, one central number, that being the number to the central processing center, is all that is required. Similar to the check approval process described above, a credit card approval may be accomplished by the merchant contacting the central processing center, such as by a modem dial-up connection, and then having the central processing center deteraiine if the particular credit card being submitted by a customer can be approved for a particular transaction with the merchant. The central processing center obtains current information with respect to the current credit amount on the credit card, from a secure connection between the central processing center and the pertinent credit card company's computer. If the credit card transaction is approved, the customer's credit card account is updated to reflect the additional credit amount placed on the customer's credit card. In one configuration, similar to the first embodiment described above, the central processing center updates its stored information to reflect the increased credit amount for the customer's credit card. Like the first embodiment, the central processing center "provisionally" debits the customer's credit card credit balance to obtain a new credit card balance. That, way, when another credit card transaction request for the same credit card is received by the central processing center immediately after it has accepted a credit card transaction for the same credit card, it will use the new credit card balance to determine if the other credit card transaction request is to be accepted. This will counter one type of fraudulent transaction whereby near-simultaneous credit card transaction requests are made at different locations. In another configuration, similar to the second embodiment described above, the central processing center does not store any credit card account amount information, but rather obtains a customer's current credit card account balance from the pertinent credit card company when it sends a credit card account balance request to the credit card company based on the current credit card transaction request that was forwarded to it from a merchant establishment. Based on the current credit card account balance information, the central processing center can determine whether or not the current credit card transaction is to be approved or not. Or, alternatively, the credit card company can send a "deny transaction" signal or command back to the central processing center, which forwards that information to the merchant establishment. The credit card approval will typically be based on the credit card limit for a particular credit card account. The inclusion of the credit card information, according to the third embodiment, along with the check and financial institution account balance information according to the first or second embodiments, allows for a "one-stop" central processing center that can determine whether a particular check or credit card transaction is acceptable at a financial institution or merchant establishment. This determination is made by way of the financial institution or merchant establishment contacting the central processing center by way of a single communications channel (e.g., telephone call or Internet connection). That way, the financial institution or merchant establishment does not have to use different phone numbers in order to verify a particular method of payment (e.g., one phone number to verify a check, another phone number to verify a VISA credit card, and yet another phone number to verify a MasterCard credit card). hi the third embodiment, the credit card has a first set of digits and/or characters that represent a particular central processing center (for the case where there is more than one central processing center in the system), a second set of digits and/or characters that represent a credit card service (or type) that issued the credit card, and a third set of digits and/or characters that are used to interconnect the credit card with other credit cards and/or checking accounts of the same account holder. The credit card would optionally have a fourth set of digits and/or characters that identify the relevant financial institution (or institutions) with checking accounts of the same account holder. Lastly, the credit card has another set of digits and/or characters that provide for individual account identification. With such information, and by use of the central processing center and as interconnect to various institutions, flexibility is obtained to allow financial institutions (e.g., banks) to establish their own credit card systems, which are then linked to the relevant checking accounts for the same account holder. Similarly, existing credit card services, such as VISA and Mastercard, can also be linked to accounts of the same account holder that are held with other financial institutions. As stated before, the links from the central processing center to each of these entities are via secure communications channels. Each of the different sets of digits and/or characters are preferably magnetically encoded onto the magnetic strip on the back side of the credit card. These digits and/or characters may also be encoded onto the credit card by other ways, such as those explained earlier with respect to bank checks. Like the description provided above with respect to check transactions, information regarding locations and numbers of transactions within a particular time period can trigger the need to obtain more information from a customer who has presented a credit card for payment. While this may be considered to be burdensome for some customers, most customers will appreciate this added security in order to counter credit card fraud. Thus, if one customer has made the last 100 credit card transactions with merchants in New Jersey, this information is recorded at the central processing center. If the 101 th credit card transaction is made in Botswana, that may trigger a need to obtain more verification information from the customer in Botswana, where that "extra verification information" request would be forwarded by the central processing center to the merchant establishment in Botswana. A fourth embodiment of the invention will now be described below. In the fourth embodiment, credit card transactions and check transactions are linked via the central processing center (or centers), and thereby linked with financial institutions that are connected to the central processing center. That way, checking accounts and one or more credit cards can be linked, so that debits to a checking account can be made, optionally, from credit card purchases. In this way, a customer can link these through his financial institution, and the financial institution can establish its own credit/debit card system for the customer. Figure 4 shows a system in which financial institutions 410-420 are communicatively connected to a central processing center 405, credit card companies 421-425 are communicatively connected to the central processing center 405, and merchant establishments 426-430 are communicatively connected to the central processing center 405. Each of these connections is preferably by way of a secure communications link (e.g., encrypted, such as by a public key/private key system). For example, if the customer desires this type of account, the customer may be provided with a credit card having a certain credit limit, say $1000.00 for example. Amounts in excess of this limit would be debited from the customer's checking account, either with or without a limit, so long as it does not exceed the balance in the customer's checking account (which is debited for ail checks cashed and credit card transactions instantaneously through the central processing center). This system results in linking credit card accounts and checking accounts, which may be with two separate institutions. For example, assume that a customer is currently attempting a $50.00 purchase by credit card. Further, assume that the current information stored at the central processing center shows that the customer's current credit balance is $980.00 and the customer's current checking account balance is $500.00. When information regarding the desired $50.00 credit card purchase is sent to the central processing center from a merchant establishment via a communications channel, the central processing center will determine that the $50.00 purchase will exceed the $1000.00 credit card limit (since $980.00 + $50.00 = $1030.00 > $1000.00). However, the central processing center would determine that the $50.00 credit card * transaction is to be accepted, and would raise the customer's credit card balance to $1000.00 and would provisionally debit the customer's checking account balance by $30.00 (to a new account balance of $470.00). The new $1000.00 credit card credit balance value would be sent by the central processing center to the credit card company via a secured link, and the new $470.00 account balance value would be sent by the central processing center to the financial institution which is holding that account for the customer. Also, the $30.00 taken from the customer's checking account would be forwarded from the financial institution to the credit card company to pay a portion of the $50.00 credit card transaction. Based on the credit card number received by the central processing center, the central processing center is capable of finding the relevant customer number assigned to that credit card number (such as by a table lookup procedure), as well as any financial institution accounts also assigned to the relevant customer number. In an alternative configuration of the central processing center in which no current credit card balance or financial account balance information is stored at the central processing center, when the $50.00 credit card purchase request was received by the central processing center, it would contact the relevant credit card company to determine the current credit card balance ($980.00). The central processing center would also contact the relevant financial institution to determine the customer's current account balance ($500.00). This can be done at the same time via separate, secure communications link to the credit card company and to the financial institution. Based on information received from the credit card company and the financial institution, the central processing center would determine if the credit card purchase request is to be accepted, and whether or not the request is to be accepted based only on the credit card account or based on a combination of the credit card account and the customer's financial institution account (or accounts). If the credit card transaction is to be accepted, updated information with respect to a new credit card credit balance and a new financial institution account balance is respectively forwarded to the credit card company and the financial institution via secure communication links. While preferred embodiments have been described herein, modification of the described embodiments may become apparent to those of ordinary skill in the art, following the teachings of the invention, without departing from the scope of the invention as set forth in the appended claims.

Claims: What Is Claimed Is: 1. A method of verifying a check presented to one of a plurality of financial institutions or merchant establishments, the method comprising the steps of: a) recording, on the check, information regarding an account to which the check is to be drawn against, a financial institution having the account which is to be drawn against, and a central processing center; b) retrieving, by the central processing center, current account information with respect to all accounts of the plurality of financial institutions; c) sending to the central processing center, through a communication channel connecting the one financial institution or merchant establishment and the central processing center, the information regarding the check presented at the one financial institution or merchant establishment; and d) determining, at the central processing center, whether or not the check is capable of being drawn against the account to which the check is to be drawn against; e) if the check is capable of being drawn against the account, provisionally debiting the account and notifying the one financial institution or merchant establishment that the check can be drawn against the account; and f) if the check is not capable of being drawn against the account, notifying the one financial institution or merchant establishment that the check cannot be drawn against the account. 2. The method according to claim 1, wherein the step e) is performed before the check clears, and wherein when another check is presented against the account prior to the check clearing, the central processing center uses a current balance of the account based on the provisional debiting of the account to determine if the another check can be drawn against the account. 3. The method according to claim 1, wherein each of the plurality of financial institutions and merchant establishments are connected to the central processing center through a corresponding secure communication channel. 4. The method according to claim 1, wherein the information recorded in the step a) includes a first plurality of digits or characters representing the central processing center, a second plurality of digits or characters representing the financial institution having the account which is to be drawn against, and a third plurality of digits or characters representing the account. 5. The method according to claim 4, wherein the information is stored on the check as one of a bar code, a magnetic strip, and a string of digits and/or characters, and an invisible imprint on the check. 6. A method of verifying a check presented to one of a plurality of financial institutions or merchant establishments, the method comprising the steps of: a) recording, on the check, information regarding an account to which the check is to be drawn against, a financial institution having the account which is to be drawn against, and a central processing center; b) sending to the central processing center, through a communication channel connecting the one financial institution and the central processing center, the information regarding the check presented at the one financial institution or merchant establishment; c) sending a request, by the central processing center to the financial institution having the account which is to be drawn against, regarding current account information of the account which is to be drawn against; d) receiving, by the central processing center, the current account information sent from the financial institution having the account which is to be drawn against; e) determining, at the central processing center, whether or not the check is capable of being drawn against the account to which the check is to be drawn against; f) if the check is capable of being drawn against the account, provisionally debiting the account and notifying the one financial institution or merchant establishment that the check can be drawn against the account; and g) if the check is not capable of being drawn against the account, notifying the one financial institution or merchant establishment that the check cannot be drawn against the account. 7. An apparatus or facility for determining whether a check can be drawn against a particular account for which the check is presented against, the apparatus comprising: a central processing center having a memory for storing information related to accounts of a plurality of financial institutions that are communicatively coupled to the central processing center; a plurality of communication channels respectively connecting the plurality of financial institutions with the central processing center; and reading units in each of the plurality of financial institutions, the reading units configured to read the check presented at one of a financial institution and merchant establishment and to send information stored on the check to the central processing center, wherein the central processing center determines, based on the stored information in the memory and the received information from the reading units, whether the check can be drawn against the particular account, and wherein the central processing center sends information related to the determination by the central processing unit to the one of the financial institution and merchant establishment at which the check was presented. 8. The apparatus or facility according to claim 7, wherein, when the determination is that the check can be drawn against the particular account, the particular account is provisionally debited by the central processing center and the memory is updated to reflect the provisional debiting. 9. The apparatus or facility according to claim 8, wherein the memory is updated before the check clears the financial institution clearing house system, and wherein when another check is presented against the particular account prior to the check clearing, the central processing center uses a current balance of the particular account based on the provisional debiting of the particular account to determine if the another check can be drawn against the particular account. 10. The apparatus or facility according to claim 7, wherein each of the plurality of communication channels is a secure communication channel. 11. The apparatus or facility according to claim 7, further comprising a recording unit for recording the information onto the check, the information including, a first plurality of digits or characters representing the central processing center, a second plurality of digits or characters representing the financial institution having the account which is to be drawn against, and a third plurality of digits or characters representing the particular account. 12. The apparatus or facility according to claim 11, wherein the information is stored on the check as one of a bar code, a magnetic strip, and a string of digits and/or characters, and an invisible imprint on the check. 13. A method of verifying one of a check transaction and/or a credit card transaction presented to one of a plurality of financial institutions or merchant establishments, the method comprising the steps of: a) if the verifying is for the check transaction, al) obta-iiing, from a check presented by a customer for initiating the check transaction, information regarding an account to which the check is to be drawn against, a financial institution having the account which is to be drawn against, and a central processing center; a2) retrieving, by the central processing center, current account information with respect to all accounts of the plurality of financial institutions; a3) sending to the central processing center, through a communication channel connecting the one financial institution or merchant establishment and the central processing center, the information regarding the check presented at the one financial institution or merchant establishment; a4) determining, at the central processing center, whether or not the check is capable of being drawn against the account to which the check is to be drawn against; a5) if the check is capable of being drawn against the account, provisionally debiting the account and notifying the one financial institution or merchant establishment that the check can be drawn against the account; and a6) if the check is not capable of being drawn against the account, notifying the one financial institution or merchant establishment that the check cannot be drawn against the account; and b) if the verifying is for the credit card transaction, bl) obtaining, from a credit card presented by a customer for initiating the credit card transaction, information with respect to a credit card account of the credit card; b2) sending the information obtained in step bl) to the central processing center; b3) retrieving, by the central processing center, current credit balance information with respect to the credit card account; b4) determining, at the central processing center, whether or not the credit card transaction is to be accepted based on the current credit balance information and a current credit card transaction amount of the credit card transaction; b5) sending information related to the determination in step b) to the one financial institution or merchant establishment. 14. The method according to claim 13, wherein the information obtained in step bl) includes a first plurality of digits or characters representing the central processing center, a second plurality of digits or characters representing a type of the credit card, and a third plurality of digits or characters that are unique to a particular holder of the credit card. 15. The method according to claim 14, wherein the plurality of digits or characters are used by the central processing center to link the credit card transaction with any other credit cards or bank accounts held by the particular holder of the credit card, as determined by information stored at the central processing center. 16. An apparatus or facility for determining whether a check or credit card can be accepted when presented at one of a financial institution and a merchant establishment, the apparatus comprising: a central processing center having a memory for storing information related to accounts of a plurality of financial institutions and credit card institutions that are communicatively coupled to the central processing center; a plurality of communication channels respectively connecting the plurality of financial institutions and credit card institutions with the central processing center; and reading units in each of the plurality of financial institutions or merchant establishments, the first reading units configured to read the check or credit card presented at one of a financial institution and merchant establishment and to send information stored on the check or credit card to the central processing center, wherein the central processing center determines, based on the stored information in the memory and the received information from the reading units, whether the check can be drawn against the particular account or the credit card can be accepted for a particular credit card transaction, and wherein the central processing center sends information related to the determination by the central processing unit to the one of the financial institution and merchant establishment at which the check or credit card was presented. 17. A method of verifying a credit card transaction presented to a merchant establishment, the method comprising the steps of: a) sending, to a central processing center communicatively connected to the merchant establishment, information regarding the credit card transaction to be verified; b) determining, at the central processing center, whether of not an amount of the credit card transaction added to a current credit balance of a credit card presented to the merchant establishment, exceeds a credit card limit of the credit card; c) if the determination in step b) is that the credit card limit is not exceeded, provisionally debiting the credit card to create an updated credit card balance, and informing the merchant establishment that the credit card transaction is verified; d) if the determination in step b) is that the credit card limit is exceeded, dl) determining, by the central processing center, whether or not an owner of the credit card has other accounts that can be used to cover a portion or all of the amount of the credit card transaction; d2) if no other accounts exist for the owner of the credit card or if accounts exist but do not have sufficient funds to handle an amount of the credit card transaction that exceeds the credit card limit, informing the merchant establishment that the credit card transaction is invalid due to the credit card limit being exceeded; d3) if at least one account exists for the owner of the credit card and if the at least one account has sufficient funds to handle the amount of the credit card transaction that exceeds the credit card limit, informing the merchant establishment that the credit card transaction is verified, and provisionally debiting the at least one account and provisionally debiting the credit card accordingly. 18. A network for verifying checking or credit card accounts, comprising: at least one central processing center that interconnects a plurality of financial institutions and/or credit card services and/or merchant establishments, the at least one central processing center configured to receive account balance information continuously received from the plurality of financial institutions and/or credit card services and to receive from one of the merchant establishments a current checking transaction or credit card transaction to be verified, so that account balances in all checking accounts and/or credit card accounts pertinent to a specific account holder are capable of being instantaneously identified and monitored by the at least one central processing center; a plurality of communication channels respectively connecting the plurality of financial institutions and credit card services and merchant establishments with the at least one central processing center; and reading units in each of the plurality of financial institutions and merchant establishments, the first reading units configured to read the check or credit card presented at one of a financial institution and merchant establishment and to send information stored on the check or credit card to the at least one central processing center, wherein the at least one central processing center determines, based on the stored information in the memory and the received information from the reading units, whether or not the checking transaction or the credit card transaction can be verified, and wherein the at least one central processing center sends information related to the determination by the at least one central processing unit to the one of the financial institution and merchant establishment at which the check or credit card was presented. 19. A network for verifying a transaction that is to be made by one of a credit card and a check, the network comprising: at least one central processing center communicatively connected to a plurality of financial institutions, a plurality of merchant establishments, and a plurality of credit card services, via respective communications lines, the at least one central processing center including, a plurality of input ports respectively provided for the plurality of communication lines; a memory that stores information related to current account balances and credit card balances for a plurality of accounts for a plurality of account holders; and a processing unit that is configured to receive information related to the transaction to be verified from one of the plurality of input ports, and to determine whether or not the transaction is to be verified based on the information stored in the memory, wherein, if the transaction is for a credit card transaction and the current credit card balance added to a value of the credit card transaction exceeds a credit card limit, the processing unit then determines whether an account holder of the credit card has at least one other account that can be used either with the credit card or by themselves in order to verify the credit card transaction, and wherein the at least one other account and the credit card balance are provisionally debited accordingly. 20. The network according to claim 19, wherein an amount to be provisionally debited from the at least one other account is capable of being limited to no more than a predetermined amount, by either the account holder or the respective financial institution or credit card service, or both. 21. The network according to claim 19, wherein then at least one central processing center provides for instantaneous review of all credit card accounts and other accounts of the account holder of the credit card that is used in the credit card transaction. 22. The network according to claim 19, wherein the at least one central processing center is communicatively connected to the plurality of credit card services that respectively correspond to a plurality of different credit cards, and wherein, upon approval by the respective credit card services, the credit card transaction may be verified by using at least two different credit cards from at least two different credit card services where one of the two different credit cards was presented for the credit card transaction and where a credit card limit and a current credit card balance of the one of the two different credit cards is such that the credit card transaction cannot be verified using only the one of the two different credit cards, and wherein the at least two different credit cards are provisionally debited accordingly at the at least one central processing center in order to verify the credit card transaction.

Inventors: GOLDENBERG DAVID M, GOLDENBERG, DAVID, M.
Applicants: GOLDENBERG DAVID M, GOLDENBERG, DAVID, M.
Application year: 2001
Main classification: G07F19
IPC codes: G06Q40, G07F7