Abstract:
Apparatus and methods for routing transaction information. The apparatus and methods may involve using receiving the transaction information; retrieving from computer readable memory: (a) a transaction information routing rule; and (b) transaction service provider information; and formulating routing information based on the transaction information, the transaction service provider information and the routing rule. The apparatus and methods may identify prospective recipients, among participants in a transaction, for receipt of the transaction information.

Description:
FIELD OF TECHNOLOGY 
       [0001]    Aspects of the disclosure relate to providing apparatus and methods for routing information relating to a transaction. In particular, the disclosure relates to apparatus and methods for routing information between financial institutions in connection with a transaction between a customer and a vendor. 
       BACKGROUND 
       [0002]    In a typical credit card transaction, a customer (the “customer”) purchases from a merchant or service provider (“the merchant”) goods or services (“the goods”) using credit. The credit is extended to the customer by an issuing bank (the “issuer”). The merchant presents a debit to an acquiring bank (the “acquirer”). The acquirer pays the merchant for (and thus “acquires”) the goods. A transaction processing network in communication with the issuer and the acquirer settles the transaction between the issuer and the acquirer. The transaction processing network may collect transaction processing network fees from the issuer and the acquirer in connection with the settlement. 
         [0003]    The issuer may impose upon the acquirer a fee for participating in the transaction. The fee may be referred to as “interchange.” Interchange may be a fixed fee for the transaction or a percentage of the transaction. Interchange flows from the acquirer, through the transaction processing network, to the issuer. The issuer typically uses interchange to cover costs of acquiring credit card customers, servicing credit card accounts, providing incentives to retain customers, mitigating fraud, covering customer credit risk, group comp and other expenses. 
         [0004]    The acquirer may deduct a “transaction fee” from the amount that the acquirer pays the merchant in exchange for the goods. The transaction fee may cover the acquirer&#39;s transaction processing network fee, interchange, and other expenses. The acquirer may obtain a profit from the transaction fee. 
         [0005]      FIG. 1  shows typical credit card transaction settlement flow  100 . Flow  100  involves transaction participants such as a merchant, a customer, and transaction service providers that are identified below. At step  1 , the merchant provides transaction information related to a proposed transaction between the merchant and a customer to a transaction authorization and clearance provider. The transaction authorization and clearance provider may provide transaction authorization and clearance information to the merchant. The transaction authorization and clearance information may include authorization for the transaction to proceed. At step  2 , the merchant provides $100 in goods to a customer. The customer pays with a credit card. At step  3 , the issuer transmits to the customer a statement showing the purchase price ($100.00) due. The issuer collects the purchase price amount, along with interest and fees if appropriate, from the customer. At step  4 , the issuer routes the purchase price amount ($100.00) through the transaction processing network to the acquirer. At step  5 , the acquirer partially reimburses the merchant for the purchase price amount. In the example shown in  FIG. 1 , the partial reimbursement is $98.00. The difference between the reimbursement amount ($98.00) and the purchase price amount ($100.00) is a two dollar ($2.00) transaction fee. 
         [0006]    At step  6 , the acquirer pays an interchange amount ($1.50), via the transaction processing network, to the issuer. At step  7 , both the acquirer and the issuer pay a transaction processing network fee ($0.07 for acquirer and $0.05 for the issuer) to the transaction processing network. 
         [0000]    
       
         
               
             
               
               
               
             
               
               
               
             
           
               
                 TABLE 1 
               
             
             
               
                   
               
               
                 Net positions, by participant, based on 
               
               
                 settlement flow 100 (shown in FIG. 1). 
               
             
          
           
               
                   
                 Participant 
                 Net ($) 
               
               
                   
                   
               
             
          
           
               
                   
                 Issuer 
                 1.45 
               
               
                   
                 Acquirer 
                 0.43 
               
               
                   
                 Transaction processing network 
                 0.12 
               
               
                   
                 Merchant 
                 −2.00 
               
               
                   
                   
               
             
          
         
       
     
         [0007]    In settlement  100  (shown in  FIG. 1 ), the transaction fee is based on a merchant discount rate of 2%. The $1.50 interchange is based on an interchange rate of 1.5%. The sum of the transaction processing network fees ($0.07 and $0.05) is based on a total transaction processing network fee rate of 12%. 
         [0008]    Transaction processing networks and transaction processing network services offered under the trademarks VISA, MASTERCARD, NYCE and PULSE are known. Transaction processing networks typically set interchange rates. Interchange rates often depend for each transaction processing network on merchant type and size, transaction processing method and other factors. Some transaction processing networks set rules that prohibit merchants from charging an incremental fee for credit card payments, establishing minimum or maximum purchase price amounts or refusing to accept selected cards. 
         [0009]    The flow of transaction information between the transaction service providers is typically circumscribed by the relationships that are illustrated in  FIG. 1 . When relationships other than those shown in  FIG. 1  are available, the other relationships may provide pathways for routing transaction information that may be used to execute one or more of the steps of a transaction between the merchant and the customer. 
         [0010]    It would be desirable, therefore, to provide apparatus and methods for routing transaction information between transaction service providers. 
       SUMMARY OF THE INVENTION 
       [0011]    Apparatus and methods for routing transaction information are provided. The apparatus and methods may involve a receiver module configured to receive the transaction information and computer readable memory configured to store (1) a transaction information routing rule; and (2) transaction service provider information. The apparatus and methods may involve a processor module configured to output transaction information routing information based on the transaction information, the transaction service provider information and the routing rule. 
     
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
         [0012]    The objects and advantages of the invention will be apparent upon consideration of the following detailed description, taken in conjunction with the accompanying drawings, in which like reference characters refer to like parts throughout, and in which: 
           [0013]      FIG. 1  shows a prior art scenario; 
           [0014]      FIG. 2  shows apparatus in accordance with the principles of the invention; 
           [0015]      FIG. 3  shows apparatus and information in accordance with the principles of the invention; 
           [0016]      FIG. 4  shows an arrangement in which apparatus and methods in accordance with the principles of the invention may be used; 
           [0017]      FIG. 5  shows another arrangement in which apparatus and methods in accordance with the principles of the invention may be used; 
           [0018]      FIG. 6  shows yet another arrangement in which apparatus and methods in accordance with the principles of the invention may be used; 
           [0019]      FIG. 7  shows steps of a process in accordance with the principles of the invention. 
       
    
    
     DETAILED DESCRIPTION OF THE INVENTION 
       [0020]    Apparatus and methods for providing transaction information routing are provided. The apparatus and methods may involve a receiver module configured to receive the transaction information and computer readable memory configured to store (1) a transaction information routing rule; and (2) transaction service provider information. The apparatus and methods may also involve a processor module configured to output transaction information routing information based on the transaction information, the transaction service provider information and the routing rule. 
         [0021]    The transaction information may include any information that is communicated, or would be appropriate to communicate, from one transaction participant to another transaction participant in connection with a transaction between a merchant and a customer. Table 1 shows illustrative transaction participant types. 
         [0000]                              TABLE 1               Illustrative transaction participant types.       Illustrative Transaction Participant Types                                    Merchant           Customer           Authorization service           Clearance service           Issuer           Network           Acquirer                        
More than one participant of a given type may be available to participate in a transaction. Different participants of the same type may have advantages and/or disadvantages relative to the other participants of that type. For example, one issuer may be a member of a lending consortium while another is not a member, one network may require payment a small interchange fee while another network requires payment of a large interchange fee, and the like.
 
         [0022]    The transaction routing rule may require that the transaction information be communicated from a first transaction participant to a second transaction participant. The rule may identify the second transaction participant. The rule may identify uniquely the second participant. The rule may require that the second participant be a member of an identified group. The rule may require that the second participant satisfy one or more criteria. The rule may require that the second participant satisfy one or more conditions. The rule may provide priorities with respect to the criteria or conditions. 
         [0023]    The transaction routing rule may require that one or more transaction services be performed in connection with the transaction. For example, the transaction routing rule may require that one or more of the illustrative transaction services (and associated activities) shown in  FIG. 1  or listed in Table 2 be performed. 
         [0000]    
       
         
               
             
               
               
             
           
               
                 TABLE 2 
               
               
                   
               
               
                 Illustrative transaction services. 
               
               
                 Illustrative Transaction Service 
               
               
                   
               
             
             
               
                   
               
             
          
           
               
                   
                 Sale of goods to customer 
               
               
                   
                 Authorization of customer credit 
               
               
                   
                 Clearance of customer credit 
               
               
                   
                 Notice of customer balance 
               
               
                   
                 Invoice of customer for bank service 
               
               
                   
                 Invoice of network fee 
               
               
                   
                 Invoice of interchange fee 
               
               
                   
                 Matching of acquirer and issuer 
               
               
                   
                 Acquisition of goods 
               
               
                   
                   
               
             
          
         
       
     
         [0024]    Each of the transaction services may be performed by a transaction participant. In some circumstances, a participant may perform more than one of the services. Each participant may charge a fee for providing the service. The fee may be charged to one or more of the other participants (as shown in  FIG. 1 ). Thus, for each transaction, a participant may be required to pay (or collect), in sum, a “net” fee. The rule may require that the net fee for a designated participant conform to a requirement. For example, the rule may require that the participants be chosen such that the customer is assessed a minimum fee based on the transaction services to be provided. 
         [0025]    Table 3 shows illustrative conditions and corresponding rules. Conditions and rules may include a preference for one or more participant. For example, a minimum net fee rule may prefer an acquirer. In such a rule, the transaction information would be required to be routed to participants such that the acquirer&#39;s net fee is minimized. 
         [0000]    
       
         
               
             
               
               
             
           
               
                 TABLE 3 
               
             
             
               
                   
               
               
                 Illustrative conditions and corresponding 
               
               
                 transaction information routing rules. 
               
             
          
           
               
                 Illustrative Condition 
                 Illustrative Rule 
               
               
                   
               
               
                 Acquirer-preferred 
                   
               
               
                 Acquirer = Issuer (“ON US”) 
                 Route transaction information 
               
               
                   
                 internally to an issuing function. 
               
               
                 Acquirer and Issuer are members 
                 Route transaction information 
               
               
                 of a lending consortium (“ON 
                 directly to Issuer. 
               
               
                 WE”) 
               
               
                 Network “X” provides lowest 
                 Route transaction to network X. 
               
               
                 interchange fee, greatest 
               
               
                 reliability (e.g., lowest 
               
               
                 occurrence of chargeback or 
               
               
                 exceptions) or highest 
               
               
                 incentives to acquirer 
               
               
                 Issuer-preferred 
               
               
                 Customer has selected form 
                 Select authorization service and 
               
               
                 (e.g., credit card, debit card 
                 route transaction information to 
               
               
                 and the like) 
                 same. 
               
               
                   
                 Select clearance service and route 
               
               
                   
                 transaction information to same. 
               
               
                   
                 Select settlement service and route 
               
               
                   
                 transaction information to same. 
               
               
                   
                 Suggest to customer a different 
               
               
                   
                 payment type based on advantage to 
               
               
                   
                 issuer (e.g., highest net revenue to 
               
               
                   
                 issuer based on available routing 
               
               
                   
                 options). 
               
               
                 Issuer = Acquirer (“ON US”) 
                 Route transaction information 
               
               
                   
                 internally to internal acquiring 
               
               
                   
                 function. 
               
               
                 Issuer and Acquirer are members 
                 Route transaction information 
               
               
                 of a lending consortium (“ON 
                 directly to acquirer. 
               
               
                 WE”) 
               
               
                 Merchant-preferred 
               
               
                 Acquirer “Y” offers lowest 
                 Route transaction information to 
               
               
                 acceptance costs 
                 acquirer Y for acquisition from 
               
               
                   
                 merchant. 
               
               
                 Customer-preferred 
               
               
                 Purchase instrument “Z” offers 
                 Provide customer with opportunity to 
               
               
                 smallest fees to customer or 
                 utilize purchase instrument Z and 
               
               
                 greatest incentives 
                 route transaction information to 
               
               
                   
                 offeror or processor of purchase 
               
               
                   
                 instrument Z. 
               
               
                   
               
             
          
         
       
     
         [0026]    In some embodiments, the rule may be conditioned on a purchasing instrument that the customer selects for executing the transaction. The purchasing instrument may be a credit card, a debit card, an instrument or device that includes a contactless chip, such as an ISO14443-compliant contactless chip, a cell phone, a personal data assistant or any other suitable electronic purchasing devices. Purchasing instruments may store data in a magnetic strip, a bar code, a silicon chip or any other suitable data storage device or format. The merchant may provide a POS terminal that is configured to receive data from, provide data to, or exchange data with the purchasing instrument. 
         [0027]    The customer may select a card that is associated with an issuer. The customer may select a signature-based transaction. The customer may select a PIN-based transaction. The selections may fulfill conditions necessary for application of the rule. The selections may not fulfill conditions necessary for application of the rule. 
         [0028]    In some embodiments, the rule may be conditioned on information about the customer&#39;s credit or purchasing behavior. For example, the rule may require routing the transaction history in a manner that attenuates risk if the customer has a poor credit history. 
         [0029]    The rules may be provided by a one or more of the participants. The rules may be updated and/or revised. 
         [0030]    The transaction service provider information may include transaction service provider identification information. The transaction service provider information may include a transaction service provider attribute. The attribute may relate to group membership, transaction service features and any other suitable transaction service provider information. The attribute may be a condition for the transaction routing rule. 
         [0031]    The transaction information routing information may identify one or more second participants to whom the transaction information should be directly or indirectly routed in order to satisfy one or more transaction rules. For example, the routing information may identify an individual second participant, a group of second participants, a list of one or more prospective second participants and the like. The routing information may include a routing table. The routing table may include a list of participants. Each of the participants on the list may correspond to a transaction service that is provided by one or more of the participants identified in  FIG. 1  or Table 1. In some embodiments, the table may include more than one list. When more than one list is included, one or more of the lists may be prioritized with respect to one or more of the other lists. In some embodiments, when more than one list is included, one or more of the lists may be conditioned upon an outcome of a routing that is based on one or more of the other lists. 
         [0032]    Illustrative embodiments of apparatus and methods in accordance with the principles of the invention will now be described with reference to the accompanying drawings, which form a part hereof. It is to be understood that other embodiments may be utilized and structural, functional and procedural modifications may be made without departing from the scope and spirit of the present invention. 
         [0033]    As will be appreciated by one of skill in the art, the invention described herein may be embodied in whole or in part as a method, a data processing system, or a computer program product. Accordingly, the invention may take the form of an entirely hardware embodiment, an entirely software embodiment or an embodiment combining software, hardware and any other suitable approach or apparatus. 
         [0034]    Furthermore, such aspects may take the form of a computer program product stored by one or more computer-readable storage media having computer-readable program code, or instructions, embodied in or on the storage media. Any suitable computer readable storage media may be utilized, including hard disks, CD-ROMs, optical storage devices, magnetic storage devices, and/or any combination thereof. In addition, various signals representing data or events as described herein may be transferred between a source and a destination in the form of electromagnetic waves traveling through signal-conducting media such as metal wires, optical fibers, and/or wireless transmission media (e.g., air and/or space). 
         [0035]      FIG. 2  is a block diagram that illustrates a generic computing device  201  (alternatively referred to herein as a “server”) that may be used according to an illustrative embodiment of the invention. The computer server  201  may have a processor  203  for controlling overall operation of the server and its associated components, including RAM  205 , ROM  207 , input/output module  209 , and memory  225 . Server  201  may include one or more receiver modules, server modules and processors that may be configured to receive transaction information, receive transaction information routing rules, receive transaction participant information, receive transaction service provider information, apply transaction information routing rules, generate transaction information routing information and perform any other suitable tasks related to routing transaction information. 
         [0036]    Input/output (“I/O”) module  209  may include a microphone, keypad, touch screen, and/or stylus through which a user of device  201  may provide input, and may also include one or more of a speaker for providing audio output and a video display device for providing textual, audiovisual and/or graphical output. Software may be stored within memory  225  and/or storage to provide instructions to processor  203  for enabling server  201  to perform various functions. For example, memory  225  may store software used by server  201 , such as an operating system  217 , application programs  219 , and an associated database  221 . Alternatively, some or all of server  201  computer executable instructions may be embodied in hardware or firmware (not shown). As described in detail below, database  221  may provide storage for customer information, transaction information, merchant information, transaction fee information, transaction fee factors and any other suitable information. 
         [0037]    Server  201  may operate in a networked environment supporting connections to one or more remote computers, such as terminals  241  and  251 . Terminals  241  and  251  may be personal computers or servers that include many or all of the elements described above relative to server  201 . The network connections depicted in  FIG. 2  include a local area network (LAN)  225  and a wide area network (WAN)  229 , but may also include other networks. When used in a LAN networking environment, computer  201  is connected to LAN  225  through a network interface or adapter  223 . When used in a WAN networking environment, server  201  may include a modem  227  or other means for establishing communications over WAN  229 , such as Internet  231 . It will be appreciated that the network connections shown are illustrative and other means of establishing a communications link between the computers may be used. The existence of any of various well-known protocols such as TCP/IP, Ethernet, FTP, HTTP and the like is presumed, and the system can be operated in a client-server configuration to permit a user to retrieve web pages from a web-based server. Any of various conventional web browsers can be used to display and manipulate data on web pages. 
         [0038]    Additionally, application program  219 , which may be used by server  201 , may include computer executable instructions for invoking user functionality related to communication, such as email, short message service (SMS), and voice input and speech recognition applications. 
         [0039]    Computing device  201  and/or terminals  241  or  251  may also be mobile terminals including various other components, such as a battery, speaker, and antennas (not shown). 
         [0040]    Terminal  251  and/or terminal  241  may be portable devices such as a laptop, cell phone, blackberry, or any other suitable device for storing, transmitting and/or transporting relevant information. 
         [0041]    Any information described above in connection with database  221 , and any other suitable information, may be stored in memory  225 . 
         [0042]    One or more of applications  219  may include one or more algorithms that may be used to receive transaction information, receive transaction information routing rules, receive transaction participant information, receive transaction service provider information, apply transaction information routing rules, generate transaction information routing information and perform any other suitable tasks related to routing transaction information. 
         [0043]    The invention may be operational with numerous other general purpose or special purpose computing system environments or configurations. Examples of well known computing systems, environments, and/or configurations that may be suitable for use with the invention include, but are not limited to, personal computers, server computers, hand-held or laptop devices, mobile phones and/or other personal digital assistants (“PDAs”), multiprocessor systems, microprocessor-based systems, set top boxes, programmable consumer electronics, network PCs, minicomputers, mainframe computers, distributed computing environments that include any of the above systems or devices, and the like. In a distributed computing environment, devices that perform the same or similar function may be viewed as being part of a “module” even if the devices are separate (whether local or remote) from each other. 
         [0044]    The invention may be described in the general context of computer-executable instructions, such as program modules, being executed by a computer. Generally, program modules may include routines, programs, objects, components, data structures, etc., that perform particular tasks or store or process data structures, objects and other data types. The invention may also be practiced in distributed computing environments where tasks are performed by separate (local or remote) processing devices that are linked through a communications network. In a distributed computing environment, program modules may be located in both local and remote computer storage media including memory storage devices. 
         [0045]      FIG. 3  shows illustrative routing engine  300 . Illustrative routing engine  300  may include one or more of the devices or features shown in connection with server  201  (shown in  FIG. 2 ). Routing engine  300  may receive transaction information  302  in connection with a transaction between a merchant and a customer. Routing engine  300  may apply rules  304  to transaction information  302  to generate routing information  306 . 
         [0046]    Transaction information  302  may include merchant identification information, customer identification information, purchasing instrument identification information, issuer information (e.g., a bank issuer number (“BIN”)), customer bank account information, transaction processing network identification information, transaction amount information and any other suitable information. 
         [0047]    Rules  304  may be stored in a database and managed by a database engine. 
         [0048]      FIG. 4  shows illustrative routing topology  400 . Routing engine  402 , which may have some or all of the features of routing engine  300  (shown in  FIG. 3 ), is in direct communication with participants such as: merchant M, authorization/clearance service ACS, customer C, issuer I, transaction processing network TPN and acquirer ACQ. Some or all of routing engine  402  and associated functions may be located with apparatus owned and/or controlled by one of the participants, in a location that is different from the participants&#39; locations, or in any other suitable location. One or more of each participant type may be present in topology  400 . 
         [0049]      FIG. 5  shows illustrative routing topology  500 . Illustrative routing topology  500  may operate in conjunction with electronic communication network  502 . Electronic communication network  502  may have some or all of the features of Internet  231  (shown in  FIG. 2 ). Routing engine  504 , which may have some or all of the features of routing engine  300  (shown in  FIG. 3 ), may manage the flow of transaction information between and among the transaction participants shown. Routing engine  504  may designate none, some or all of the shown participants of a given participant type to participate in the transaction. Routing engine  504  may thus select individual participants from within a participant type based on attributes of the individual participants. For example, different acquirers may require different acquisition fees, different transaction processing networks may require different interchange fees and different issuers may require different service charges. 
         [0050]      FIG. 6  shows illustrative scenario  600  in which routing engine  504  governs routing of transaction information between participants that include acquirers ACQ 1 , ACQ 2 , ACQ 3  and issuers I 1 , I 2  and I 3 . In scenario  600 , ACQ 1  and I 3 , which are both identified by a broken-line box, are members of a lending consortium. If, for example, customer C presented a purchasing instrument, such as a credit card, that was issued by issuer I 3 , routing engine  504  may route the transaction information directly to acquirer ACQ 1  to execute the transaction. If, for example, acquirer ACQ 1  does not have an acquisition relationship with merchant M, routing engine  504  may select a different acquirer with whom to execute the transaction. Routing engine  504  may be configured to select a different acquirer who is a member of the lending consortium. If no appropriate acquirer can be identified, routing engine  504  may query one of the transaction processing networks for an acquirer to complete the transaction. 
         [0051]    Processes in accordance with the principles of the invention may include one or more features of the process illustrated in  FIG. 7 . For the sake of illustration, the steps of the process illustrated in  FIG. 7  will be described as being performed by a “system”. The “system” may include one or more of the features of the apparatus that are shown in  FIG. 2  and/or any other suitable device or approach. The “system” may be provided by an entity. The entity may be an individual, an organization or any other suitable entity. 
         [0052]      FIG. 7  shows illustrative process  700  for routing transaction information. Process  700  may begin at step  702 . At step  702 , the system may receive transaction information. For example, the system may receive transaction information from a transaction participant. At step  704 , the system may identify one or more elements of the transaction information that trigger one or more routing rule conditions. At step  706 , one or more routing rules may be identified based on the conditions. At step  708 , the system may generate routing information based on the one or more rules. The transaction information may identify one or more other transaction participants to whom the information may be directly or indirectly routed. 
         [0053]    One of ordinary skill in the art will appreciate that the steps shown and described herein may be performed in other than the recited order and that one or more steps illustrated may be optional. The methods of the above-referenced embodiments may involve the use of any suitable elements, steps, computer-executable instructions, or computer-readable data structures. In this regard, other embodiments are disclosed herein as well that can be partially or wholly implemented on a computer-readable medium, for example, by storing computer-executable instructions or modules or by utilizing computer-readable data structures. 
         [0054]    Thus, systems and methods for routing transaction information have been provided. Persons skilled in the art will appreciate that the present invention can be practiced by other than the described embodiments, which are presented for purposes of illustration rather than of limitation. The present invention is limited only by the claims that follow.