Patent Publication Number: US-11397926-B2

Title: Method and system for processing electronic checks

Description:
CROSS-REFERENCE TO RELATED APPLICATION 
     This application is a continuation of and claims priority to U.S. application Ser. No. 13/857,577, filed on Apr. 5, 2013, which is a continuation of and claims priority to U.S. application Ser. No. 10/925,713, filed on Aug. 25, 2004, the entire disclosure of which is incorporated herein by reference. 
    
    
     TECHNICAL FIELD 
     This disclosure relates to check processing and, more specifically, to a method and system for processing electronic checks. 
     BACKGROUND 
     Currently, a consumer may pay a retailer or other receiving entity with an electronic check for goods or services. This electronic check may then be considered a replacement for or an alternative to a physical check drafted by the consumer. For example, the consumer may initiate the transaction through his bank using financial software. The consumer&#39;s bank prints a paper copy of the electronic check, which includes the payee, amount, and check number (as well as other information), for transfer to the receiving entity. The bank then mails or otherwise physically transmits the printed copy to the expected receiving entity. In another example, the consumer may establish an electronic draft from his bank to a retailer. Upon a purchase by the consumer, the retailer communicates the relevant information to a clearing house, which then prints the paper check for transmission to a bank of first deposit. Regardless of the technique, a printed or physical representation of the electronic check are used to deposit the check and normally include a “signature on file” mark in place of the consumer&#39;s physical signature. 
     SUMMARY 
     This disclosure provides a system and method for processing electronic checks. In one embodiment, for example, software is operable to identify checking account information from a repository, with the checking account information associated with a transaction. The software automatically generates an electronic check image based, at least in part, on the transaction and the identified checking account information. The software is then operable to communicate the electronic check image to a bank of first deposit for deposit. 
     The details of various embodiments of the disclosure are set forth in the accompanying drawings and the description below. One or more embodiments of the disclosure may include several important technical advantages. For example, the disclosure may allow a receiving entity (or other retail organization or corporation) to process retail transactions without the need for consumer&#39;s physical checks or paper representations of electronic checks. Continuing this example, this disclosure may enable the receiving entity to electronically deposit checks or similar retail payments without the need for paper. In other words, the present disclosure may provide the receiving entity with the ability to reduce or eliminate the need for physical checks from the retail transaction through the deposit process, thereby possibly expediting the deposit of the funds from the transaction. In yet another example, the consumer may quickly transact with a retailer through a courtesy card and yet receive a check image, often with a check number, with his bank statement. Of course, certain embodiments of the disclosure may have none, some or all of these advantages. Other features, objects, and advantages of the disclosure will be apparent from the description and drawings, as well as from the claims. 
    
    
     
       DESCRIPTION OF DRAWINGS 
         FIG. 1  illustrates a system for depositing electronic check images in accordance with one embodiment of the present disclosure; 
         FIG. 2  is an example table storing checking account information in accordance with one embodiment of the present disclosure; and 
         FIGS. 3A-B  are flowcharts illustrating example methods for processing electronic checks in accordance with one embodiment of the present disclosure. 
     
    
    
     DETAILED DESCRIPTION 
       FIG. 1  illustrates a system  100  for processing and depositing electronic check images in accordance with one embodiment of the present disclosure. Generally, system  100  includes at least a portion of any retail system operable to process electronic retail transactions, automatically generate at least one electronic check image (often associated with an image replacement document or IRD) from the transaction, and communicate the electronic check image to a bank of first deposit or other financial institution  108 . As used herein, an electronic check image may be a digital image of an electronic check, or a file including the image and other information, including the front, the back, both, or any suitable portion thereof. This digital image may not be based on a physical check, but may instead be populated, created, imaged, or otherwise generated based on data from an electronic checking transaction. This check image may be in any suitable format including Moving Picture Experts Group (MPEG), Joint Photographic Experts Group (JPEG), Tag Image File Format (TIFF), including any suitable version thereof (such as TIFF 6.0), and others. The term “dynamically” generally means that certain processing is determined, at least in part, at run-time based on one or more variables. The term “automatically,” as used herein, generally means that the appropriate processing is substantially performed by at least part of system  100 . It should be understood that “automatically” further contemplates any suitable user or manager interaction with system  100  without departing from the scope of this disclosure. 
     System  100  is typically distributed into at least one receiving entity (or point-of-sale)  102  and at least one financial institution  108 . Often, portions of system  100  are electronically inter-coupled, thereby allowing efficient communications among the various components. Generally, financial institution  108  is any agent, third-party resource, clearing house, branch, processing center, or central office of a bank of first deposit or other similar financial institution. Indeed, while illustrated as two banks, first financial institution  108   a  and second financial institution  108   b  respectively, any number of banks and/or other institutions may be included in system  100  without departing from the scope of this disclosure. Moreover, two or more financial institutions  108  may represent two or more ABA routing/transit numbers associated with one bank. 
     As illustrated, system  100  also includes one or more receiving entities  102 . Receiving entity  102  is any organization or person, including a corporation, a privately owned store, an online vendor, a telephony system, outside representative or agent, a local or remote automated teller machine (ATM), or other original recipient, point-of-sale, or location operable to at least partially transact through electronic checks. Receiving entity  102  may also represent a teller at one of the financial institutions  108  without departing from the scope of the disclosure. Receiving entity  102  may also be operable to generate an Automated Clearing House (ACH) transaction based on the retail transaction for quickly processing the transaction with financial institutions  108 . Regardless, at any appropriate time and using any suitable automatic or manual technique, receiving entity  102  is normally operable to generate electronic check images based on electronic transactions and deposit these electronic check images with any appropriate financial institution  108 . In the illustrated embodiment, receiving entity  102  includes two stores,  103   a  and  103   b  respectively, and a service center  104 . But it will be understood that receiving entity  102  may include none, one, or both (as well as other) components without departing from the scope of this disclosure. In other words, receiving entity  102  may be considered a merged point-of-receipt  103  and service center  104  and reference to point-of-receipt  103  and service center  104  is meant to include a singular or standalone receiving entity  102  as appropriate. 
     Point-of-receipt  103  is any person or entity that receives information associated with electronic checks. For example, point-of-receipt  103  may be a store, an ATM, a hospital, and others. In certain embodiments, point-of-receipt  103  may be operable to generate electronic check images and communicate encrypted or unencrypted electronic check images to a service center  104 . Illustrated first point-of-receipt  103   a  includes an electronic cash register (ECR)  122  for receiving and storing physical checks. ECR  122  may be operable to generate electronic check images from scanned physical checks upon receipt. Of course, receiving entity  102  may include other additional or alternative components for processing transactions. For example, point-of-receipt  103  may include one or more card readers  124 . Card reader  124  is any suitable device operable to capture or otherwise obtain information from a consumer via, for example, his retail or courtesy card, a key card, a drivers license, and such. For example, card reader  124  may be a scanner, a key card reader, an automated teller machine (ATM), a debit or credit card machine, check reader or sorter, or any other similar device (or combination thereof) that can at least partially process a retail transaction or identify checking account information (such as through a retail courtesy account). Card reader  124  may also be operable to receive an electronic signature or scan a physical signature for insertion into the particular electronic check image. In certain embodiments, card reader  124  may be further operable to generate the electronic check images based on the received or identified information. 
     Example service center  104  is any office, agent, department, data processing center, or other entity or computer operable to provide centralized or managed processing of electronic check image from a plurality of points-of-receipt  103 . For example, service center  104  may be a corporate headquarters, a regional management office, a designated point-of-receipt  103 , as well as others. Indeed, service center  104  may be unaffiliated with point-of-receipt  103 , such as comprising an outsourced data processing organization, without departing from the scope of the disclosure. Moreover, any or all points-of-receipt  103  may act or be operable to perform as service center  104 . Illustrated service center  104  includes server  106  and computer  105 , but it will be understood that service center  104  may include none, some, as well as other components without departing from the scope of this disclosure. 
     Server  106  includes memory  120  and processor  125  and comprises an electronic computing device operable to receive, transmit, process, and store data associated with system  100  and, more specifically, receiving entity  102 . For example, server  106  may be any computer or processing device such as, for example, a blade server, general-purpose personal computer (PC), Macintosh, workstation, a mainframe, or any other suitable device. Generally,  FIG. 1  provides merely one example of servers or computers that may be used with the disclosure. For example, although  FIG. 1  illustrates one server  106  that may be used with the disclosure, system  100  can be implemented using computers other than servers, as well as a server pool. In other words, the present disclosure contemplates computers other than general purpose computers as well as computers without conventional operating systems. As used in this disclosure, the term “computer” is intended to encompass a personal computer, workstation, network computer, or any other suitable processing device. Server  106  may be adapted to execute any operating system including Linux, UNIX, Windows Server, or any other suitable operating system. According to one embodiment, server  106  may also include or be communicably coupled with a web server and/or a secure financial server. 
     Memory  120  may include any memory or database module and may take the form of volatile or non-volatile memory including, without limitation, magnetic media, optical media, random access memory (RAM), read-only memory (ROM), removable media, or any other suitable local or remote memory component. In the illustrated embodiment, memory  120  includes one or more retail account tables  140 , but memory  120  may include any appropriate data such as audit information, administration profiles, MICR codes, one or more hash values, an all-items file, and others. 
     Retail account table  140  includes information associated with a plurality of retail and/or checking accounts, typically provided by a consumer through a paper or online application process. In one embodiment, retail account table  140  may be a temporary file or other data structure used for efficiently associating retail account information with checking account information. In an alternative embodiment, retail account table  140  may be a persistent file used for collecting or storing checking account information such as checking account holder, check account number, and a unique identifier (driver&#39;s license number, retail account number, etc.). For example, memory  120  may store checking account information in a relational database, typically including tables defined using SQL statements and interrelated using schemas. In this example, one table may store checking account information and another table may store retail account information. In another example, memory  120  may store checking account information in one or more comma-separated-values (CSV) files, run-time parameters, XML documents, Virtual Storage Access Method (VSAM) files, Btrieve files, text files, encrypted files, object-oriented database data structures, and others. 
     Server  106  also includes processor  125 . Processor  125  executes instructions and manipulates data to perform the operations of server  106  such as, for example, a central processing unit (CPU), a blade, an application specific integrated circuit (ASIC), or a field-programmable gate array (FPGA). Although  FIG. 1  illustrates a single processor  125  in server  106 , multiple processors  125  may be used according to particular needs and reference to processor  125  is meant to include multiple processors  125  where applicable. In the illustrated embodiment, processor  125  executes image processing engine  130 , which performs or executes various check processes such as, for example, techniques described in  FIGS. 3A-B . 
     Image processing engine  130  could include any hardware, software, firmware, or combination thereof operable to, among other things, automatically generate electronic check images from electronic checking transactions. For example, image processing engine  130  may be written or described in any appropriate computer language including C, C++, Java, Perl, Visual Basic, assembler, any suitable version of 4GL, and others or any combination thereof. It will be understood that while image processing engine  130  is illustrated in  FIG. 1  as a single multi-tasked module, the features and functionality performed by this engine may be performed by multiple modules such as, for example, an image generation module, a deposit processing module, and an administration module. Further, while illustrated as internal to server  106 , one or more processes associated with image processing engine  130  may be stored, referenced, accessed, or executed remotely (such through electronic check register  122  and/or card reader  124 ). Moreover, image processing engine  130  may be a child or sub-module of another software module (not illustrated) without departing from the scope of this disclosure. In one embodiment, image processing engine  130  may include in or be communicably coupled with a computer  105  or graphical user interface (GUI)  116 . 
     Computer  105  may include any computing device operable to present information to a user such as at point-of-receipt  103  or at home. While not illustrated, computer  105  (as well as ECR  122  or card reader  124 ) may also include, execute, or present a portion or a version of image processing engine  130  (illustrated in server  106 ) for performing or implementing depositing or other check processing without departing from the scope of the disclosure. For example, local image processing engine  130  may collect or otherwise identify electronic check images for communication to service center  104  or depositing to financial institution  108 . In another example, computer  105  may allow an administrator to log-on to image processing engine  130 , monitor a communication of images, communicate the images via an included or referenced file transfer program such as secure FTP. Regardless, computer  105  may be a computer that includes an input device, such as a keypad, touch screen, mouse, or other device that can accept information, and an output device that conveys information associated with the operation of server  106 , financial institutions  108 , or receiving entities  102 , as appropriate. Both the input device and output device may include fixed or removable storage media such as a magnetic computer disk, CD-ROM, or other suitable media to both receive input from and provide output to users through the display, namely GUI  116 . 
     GUI  116  comprises a graphical user interface operable to allow the user of the workstation to interface with at least a portion of system  100  for any suitable purpose. Generally, GUI  116  provides the user of computer  105  with an efficient and user-friendly presentation of data provided by or communicated within system  100 . GUI  116  may comprise a plurality of customizable frames or views having interactive fields, pull-down lists, and buttons operated by the user. In one embodiment, GUI  116  presents reports that includes the various electronic check information and associated buttons and receives commands from the user via one of the input devices. Moreover, it should be understood that the term graphical user interface may be used in the singular or in the plural to describe one or more graphical user interfaces and each of the displays of a particular graphical user interface. Therefore, GUI  116  contemplates any graphical user interface, such as a generic web browser or touch screen, that processes information in system  100  and efficiently presents the results to the user. Server  106  can accept data from computer  105  via the web browser (e.g., Microsoft Internet Explorer or Netscape Navigator) and return the appropriate HTML or XML responses using network  112 . 
     Server  106  may also include interface  117  for communicating with other computer systems or components, such as another server  106  or receiving entity  102 , over network  112  in a client-server or other distributed environment. In certain embodiments, server  106  receives electronic check information or retail account data from internal or external senders through interface  117  for storage in memory  120  and/or processing by processor  125 . Generally, interface  117  comprises logic encoded in software and/or hardware in a suitable combination and operable to communicate with network  112 . More specifically, interface  117  may comprise software supporting one or more communications protocols associated with communications network  112  or hardware operable to communicate physical signals. 
     Network  112  facilitates wireless or wireline communication between computer servers  106  and any other local or remote computer or component, such as all or a portion of a bank posting systems or other intermediate systems. While illustrated as two networks,  112   a  and  112   b  respectively, network  112  may be a continuous network without departing from the scope of this disclosure, so long as at least portion of network  112  may facilitate communications between the requisite parties or components. In other words, network  112  encompasses any internal or external network, networks, sub-network, or combination thereof operable to facilitate communications between various computing components in system  100 . Network  112  may communicate, for example, Internet Protocol (IP) packets, Frame Relay frames, Asynchronous Transfer Mode (ATM) cells, voice, video, data, and other suitable information between network addresses. Network  112  may include one or more local area networks (LANs), radio access networks (RANs), metropolitan area networks (MANs), wide area networks (WANs), all or a portion of the global computer network known as the Internet, and/or any other communication system or systems at one or more locations. 
     In one aspect of operation of certain embodiments, point-of-receipt  103  is involved in a retail transaction with a consumer. Point-of-receipt  103  receives retail account information from the consumer, such as through card reader  124 . Point-of-receipt  103  communicates this retail account information to server  106 , which often resides at service center  104 . Image processing engine  130  then receives retail account information from point-of-receipt  103  and identifies the associated checking account information for the consumer using, for example, retail account table  140 . In certain embodiments, card reader  124  further communicates information associated with the retail transaction to server  106 . Image processing engine  130  then performs any suitable processing using the transaction information in the identified checking account information. For example, image processing engine  130  may verify that the consumer&#39;s checking account has sufficient funds for the transaction. In another example, image processing engine  130  may verify account status, such as holds, open or closed, and others. Based on this verification processing, image processing engine  130  may reject the transaction or accept or process the transaction. Returning to the insufficient funds example, receiving entity  102  may deny the transaction or may accept, process, present, or otherwise handle a known or suspected “non-sufficient” transaction as appropriate. 
     Once the appropriate processing (if any) has been completed, image processing engine  130  automatically generates an electronic check image using the identified checking account information and the transaction information. For example, image processing engine  130  may populate the electronic check image with the ABA routing/transit number, the checking account number, the bank name, the payee name, the checking account holders name, and other check information. In another example, image processing engine  130  may load a default electronic check image and populate the remaining fields using the identified transaction information. Image processing engine  130  may insert a “signature on file” tag into the signature field of the electronic check image, possibly received during retail account enrollment. Alternatively, image processing engine  130  may request an electronic signature during the transaction, which is then inserted into the electronic check image. Moreover, image processing engine  130  may automatically determine the check number for this electronic check image based on the identified checking account information. For example, image processing engine  130  may retrieve a last check number for the checking account from retail account table  140  and increment this number by one for use in the check image. In another example, image processing engine  130  may request the next electronic check number from the appropriate financial institution  108 . In certain embodiments, this check number may be selected from among a subset of checks assigned to, selected by, or otherwise associated with retail entity  102 . Once all the appropriate check information has been gathered, collected, or otherwise identified, image processing engine  130  populates a data structure to be used in the electronic check image generation. As described above, this electronic check image may be operable to print or otherwise generate an image replacement document. In certain embodiments, once the electronic check image has been suitably generated, image processing engine  130  then deposits this electronic check image without a physical representation of the check at any point during that transaction. For example, image processing engine  130  may generate an electronic deposit including one or more electronic check images for communication to the appropriate financial institution  108 . 
       FIG. 2  is a diagram illustrating an example retail account table  140  in accordance with one embodiment of the present disclosure. In general, system  100  may use retail account table  140  to store and process objects from the queries. In the illustrated embodiment, retail account table  140  is a multi-dimensional data structure that includes at least a plurality of account records. Each record includes multiple example columns. In this example, each record includes a retail account number, a name, an address, a checking account number, ABA routing/transit number, a last check number, and a “signature on file” switch (which may be used to indicate whether an electronic signature is required during the transaction). It will be understood that the illustrated fields are for example purposes only and one or more these fields may not be in retail account table  140  without departing from the scope of this disclosure. In one embodiment, the account record may include a link to another table, such as, for example, a purchase history table. Moreover, retail account table  140  may be separated into multiple tables without departing from the scope of the disclosure. In one embodiment, retail account table  140  is coupled with or referenced by two data structures or objects: a retail account data structure and checking account data structure. In other words, the illustrated retail account table  140  is merely to aid understanding and may not represent certain embodiments, formats, or data structures within the scope of this disclosure. 
       FIGS. 3A-B  are flowcharts illustrating example methods,  300  and  350  respectively, for depositing electronic check images at a retail level, such as receiving entity  102 , in accordance with one embodiment of the present disclosure. At a high level, method  300  includes image processing engine  130  gathering checking account information based on a retail transaction, automatically generating an electronic check image based on this information, and depositing the image; whereas method  350  includes generating an electronic check image at a financial institution  108  based on user input at computer  105 . The following descriptions focus on the operation of image processing engine  130  in performing these methods. But system  100  contemplates using any appropriate combination and arrangement of logical elements implementing some or all of the described functionality. Indeed, while described as at least partially occurring at a retail level store, method  300  may be performed at any appropriate location such as, for example, at an ATM or other standalone receiving entity  102  or financial institution  108 , as illustrated by method  350 . 
     Method  300  begins at step  302 , where receiving entity  102  associates a checking account with a retail account. For example, a customer may include the checking account information in an online or paper application for a new retail account associated with receiving entity  102 . The retail account may be a discount plan, a courtesy account, a frequent buyer account, or any other retail or marketing association. Part of this application process may include the consumer putting his signature on file, providing a blank or voided check to receiving entity  102 , and any other suitable tasks. Typically, receiving entity  102  stores this checking account information in retail account table  140 . But it will be understood that the checking information may be stored in any appropriate repository such as, for example, a secure server or data center, a dedicated computer, and others. Once approved or otherwise accepted, receiving entity  102  may generate or identify a unique identifier for the consumer (or his family, organization, or business). For example, receiving entity  102  may provide a retail account number, such as a retail courtesy card, to the consumer. In another example, receiving entity  102  may use the consumer&#39;s driver&#39;s license number, social security number, checking account number, or any other unique or substantially unique identifier. 
     At this or at any subsequent time, the consumer may then buy or pay for good or services (or perform any other suitable electronic checking transaction) through receiving entity  102 . Accordingly, at step  304 , point-of-receipt  103  receives a retail account identification from the consumer during the particular transaction. For example, the consumer may swipe a retail account card at checkout. In another example, the consumer may present with his driver&#39;s license, which point-of-receipt  103  then uses to locate the retail account. Typically, the consumer is then presented with various payment options, such as checking, credit card, cash, and others. Point-of-receipt  103  then receives a selection indicating that the consumer is paying through his checking account at step  306 . At step  308 , point-of-receipt  103  identifies the particular transaction amount. Next, point-of-receipt  103  identifies checking account information associated with the particular retail account at step  310 . For example, point-of-receipt  103  may communicate the retail account identifier, which was identified earlier, to service center  104  for identification of the checking account information. In certain embodiments, receiving entity  102  may verify the checking account information, as indicated at decisional step  312 . This verification may include verifying the ABA routing/transit number, verifying account status (holds, open, and such), verifying that there is sufficient funds in the account to cover the transaction (such as through the ABA routing/transit number and checking account number), and any other suitable verification or authentication. If the checking account is not verified, then point-of-receipt  103  may present a rejection message to the consumer at step  314 . Otherwise, receiving entity  102  automatically generates an electronic check at step  316 . It will be understood that generation of the electronic check may merely be the population of a temporary data structure, creation of an ACH transaction, or any other suitable process. Moreover, in certain embodiments or based on particular criteria, point-of-receipt  103  may continue to process an unverified or invalidated transaction as appropriate. 
     Once point-of-receipt  103  has collected or identified the appropriate information, it determines if it should transmit the electronic check information to service center  104  at decisional step  318 . If point-of-receipt  103  is to transmit electronic check information to the service center  104  at step  320 , then service center  104  generates an electronic check image based on the electronic check information at step  322 . As indicated above, the generation of the electronic check image may include identifying one or more fields within a data structure and populating the electronic check image with the identified fields. Next, service center  104  communicates the generated electronic check image to a bank of first deposit or other financial institution  108  at step  324 . Returning to decisional step  318 , if point-of-receipt  103  is operable to directly deposit with financial institution  108 , then it generates an electronic check image based on the electronic check information at step  326 . As indicated above, the generation of the electronic check image may include identifying one or more fields within a data structure and populating the electronic check image with the identified fields. Next, point-of-receipt communicates the generated electronic check image to a bank of first deposit or other financial institution  108  at step  328 . Part of this communication may include an electronic deposit ticket or header record, often automatically generated. 
     Method  350  illustrates an alternative technique for receiving entity  102  to process an electronic check image for a particular transaction. In this embodiment, the consumer sends an electronic check to receiving entity  102  through financial institution  108 . This electronic check would typically be in the form of an electronic check image generated by financial institution  108  from electronic checking information. For example, method  350  begins at step  352 , where financial institution  108  receives payee information from a particular checking account holder. For example, financial institution  108  may receive the payee information via a web site, financial software, a telephony system, or any other system. In the illustrated embodiment, the consumer may use computer  105  to transmit the desired information to financial institution  108 . Next, financial institution  108  receives transaction information from the checking account holder at step  354 . For example, this transaction information may include a check date, a transaction amount, and others. At step  356 , financial institution  108  automatically generates an electronic check based on the received information. As above, this electronic check may be a temporary data structure, a file, an ACH transaction, or any other appropriate logical component. Using the generated electronic check, financial institution  108  generates an electronic check image, in any particular format, based on the identified electronic check information at step  358 . Next, financial institution  108  communicates the electronic check image to the payee, illustrated as receiving entity  102 , at step  360 . At any appropriate point, receiving entity  102  may then deposit the electronic check image using any appropriate technique. 
     The preceding flowcharts and accompanying descriptions illustrate exemplary methods  300  and  350 . In short, system  100  contemplates using any suitable technique for performing this and other tasks. Accordingly, many of the steps in these flowcharts may take place simultaneously and/or in different orders than as shown. Moreover, system  100  may use methods with additional steps, fewer steps, and/or different steps, so long as the methods remain appropriate. 
     Although this disclosure has been described in terms of certain embodiments and generally associated methods, alterations, and permutations of these embodiments and methods will be apparent to those skilled in the art. For example, techniques similar to those illustrated may be substantively performed at a cash register. In another example, the receiving entity may use a driver&#39;s license or other similar unique identifier to automatically associate checking account information with a particular transaction. Accordingly, the above description of example embodiments does not define or constrain this disclosure. Other changes, substitutions, and alterations are also possible without departing from the scope of this disclosure.