Patent Publication Number: US-2016224958-A1

Title: Sliding Scale Payments System and Method

Description:
BACKGROUND 
     1. Field of the Disclosure 
     Aspects of the disclosure relate in general to commercial services. Aspects include a method and analysis platform to reduce the computational burden of commercial enterprises to support sliding scale fees. 
     2. Description of the Related Art 
     A payment card is a card that can be used by an accountholder and accepted by a merchant to make a payment for a purchase or in payment of some other obligation. Payment cards include credit cards, debit cards, charge cards, and Automated Teller Machine (ATM) cards. Payment cards provide the clients of a financial institution (“accountholders”) with the ability to pay for goods and services without the inconvenience of using cash. 
     In a different art, many commercial enterprises offer need-based fee scales. These include healthcare businesses, lawyers, educational institutions, labor unions, and religious organizations. Generally, there is a burden of proof or other such application process involved in determining the fee for a given good or service. There is also administrative cost to supporting sliding scale payments. 
     SUMMARY 
     Embodiments include a system, device, method and computer-readable medium to reduce the computational burden of commercial enterprises supplying sliding scale fees. 
     The system includes a processor and a network interface. The network interface is configured to receive transaction data from a merchant bank. The transaction data describes the payment transaction and includes: an account identifier associated with the accountholder, a merchant identifier, an amount of the transaction and a sliding scale identifier. The processor matches the merchant identifier and the sliding scale identifier with a billing scale entry in a database. The billing scale entry includes billing scale requirements and a billing scale. The processor matches the account identifier with an accountholder entry in a database. The accountholder entry includes accountholder data. The processor determines whether the accountholder qualifies for sliding scale pricing based at least in part on the billing scale requirements and the accountholder data. When the accountholder qualifies for sliding scale pricing, the processor calculates a suggested bill amount based on the billing scale entry. The network interface transmits to the merchant bank the suggested bill amount when the accountholder qualifies for sliding scale pricing. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
         FIG. 1  is a block diagram illustrating a payment network to reduce the computational burden of commercial enterprises supplying sliding scale fees. 
         FIG. 2  is an expanded block diagram of an exemplary embodiment of a server architecture of a payment network embodiment configured to reduce the computational burden of commercial enterprises supplying sliding scale fees. 
         FIGS. 3A-B  illustrate a real time authorization process, from the perspective of a payment network, to reduce the computational burden of commercial enterprises supplying sliding scale fees. 
     
    
    
     DETAILED DESCRIPTION 
     One aspect of the disclosure includes the realization that the information gathering and collection for need-based sliding scale payments is burdensome and inefficient. Additionally, as many merchants or vendors provide such sliding scale payments, the process is repeated by each organization offering such a payment program. The repeated collection of the same or similar information by each party is onerous on the customer/purchaser. 
     Another aspect of the disclosure is the understanding that a central location can be used to collect accountholder data, and assess the accountholder&#39;s participation in a sliding scale payment program. 
     Aspects of the disclosure include a method and system of making fee assessments and allowing merchants to determine payments owed by each accountholder in a more efficient manner. 
     Another aspect of the disclosure is the realization that once the accountholder data is collected, accountholders may want to restrict access to selected merchants. 
     While embodiments described herein are applied to a payment network and point-of-sale context, it is understood by those familiar with the art that the concepts, apparatus, system and methods described herein may also be applicable to an issuer and point-of-sale context. 
     The systems and processes are not limited to the specific embodiments described herein. In addition, components of each system and each process can be practiced independently and separately from other components and processes described herein. Each component and process also can be used in combination with other assembly packages and processes. 
       FIG. 1  is a block diagram  1000  illustrating a system and method of making fee assessments and allowing merchants to determine payments owed by each accountholder in a more efficient manner. The present disclosure is related to a payment system, such as a credit card payment system using a payment network  2000 , such as the MasterCard® interchange, Cirrus® network, or Maestro®. The MasterCard interchange is a proprietary communications standard promulgated by MasterCard International Incorporated of Purchase, N.Y., for the exchange of financial transaction data between financial institutions that are customers of MasterCard International Incorporated. Cirrus is a worldwide interbank network operated by MasterCard International Incorporated linking debit and payment devices to a network of ATMs throughout the world. Maestro is a multi-national debit card service owned by MasterCard International Incorporated. 
     In a financial payment system, a financial institution called the “issuer”  1500  issues a payment account to a consumer, who uses payment device  1100   a - c  to tender payment for a sliding scale purchase from merchant  1300 . Payment devices may include a payment card  1100   a , mobile device  1100   b  (such as key fobs, mobile phones, tablet computers, Personal Digital Assistants (PDAs), electronic wallets and the like), or computers  1100   c . Payment devices may be used to tender purchase in-person at merchant  1300 , or when connected via a mobile telephone network  1250  or the internet  1200 . 
     In this example, a user makes a purchase at merchant  1300 ; the sale may include goods or services that are subject to a sliding scale pricing system. User presents the payment device  1100  to a point-of-sale device at merchant  1300 . The merchant  1300  is affiliated with a financial institution. This financial institution is usually called the “merchant bank,” “acquiring bank” “acquirer bank,” or “acquirer”  1400 . When a payment device  1100  is tendered at merchant  1300 , the merchant  1300  electronically requests authorization from the acquirer  1400  for the amount of the purchase. The authorization request includes an indicator or indicators that certain goods or services are subject to the sliding scale pricing system. The indicators may directly relate to the goods and services. The request is performed electronically with the consumer&#39;s account information. For payment cards, the consumer&#39;s account information may be retrieved from the magnetic stripe on a payment card  100   a  or via a computer chip imbedded within the card  1100   a . For other types of payment devices  1100   b - c , the consumer&#39;s account information may be retrieved by wireless methods, such as contactless communication like MasterPass® or via Near Field Communication (NFC). The account information, along with the sliding scale pricing indicator, is forwarded to transaction processing computers of the merchant bank  1400 . Alternatively, a merchant bank  1400  may authorize a third party to perform transaction processing on its behalf. In this case, the merchant  1300  will be configured to communicate with the third party. Such a third party is usually called a “merchant processor” or an “acquiring processor” (not shown). 
     The computers of the acquirer  1400  or the merchant processor will communicate, via payment network  2000 , with the computers of the issuer bank  1500  to determine whether the consumer&#39;s account is in good standing and whether the accountholder qualifies for sliding scale purchase. It is understood that any number of issuers  1500  may be connected to payment network  2000 . 
     Based on the sliding scale pricing indicator and the consumer&#39;s account information, the payment network  2000  or issuer  1500  retrieves accountholder data to determine whether the consumer qualifies for the sliding scale pricing. When the consumer qualifies for the sliding scale pricing, the payment network  2000  or issuer  1500  recalculates the amount owed on the transaction based on the sliding scale, presenting the proposed recalculated amount to the merchant  1300 . The merchant can then either adopt or reject the proposed recalculated amount for the transaction. 
     After a transaction is captured, a clearing process occurs. 
     Eventually, the transaction is settled between the merchant  1300 , the acquirer  1400 , and the issuer  1500 . 
     Embodiments will now be disclosed with reference to a block diagram of an exemplary payment network server  2000  of  FIG. 2 , configured to make fee assessments and allowing merchants to determine payments owed by each accountholder, constructed and operative in accordance with an embodiment of the present disclosure. While payment network server is described as being part of payment network  2000 , it is understood that in some embodiments the payment network server described herein could be located at an issuer  1500 . 
     Payment network server  2000  may run a multi-tasking operating system (OS) and include at least one processor or central processing unit (CPU)  2100 , a non-transitory computer-readable storage medium  2200 , and a network interface  2300 . 
     Processor  2100  may be any central processing unit, microprocessor, micro-controller, computational device or circuit known in the art. It is understood that processor  2100  may temporarily store data and instructions in a Random Access Memory (RAM) (not shown), as is known in the art. 
     As shown in  FIG. 2 , processor  2100  is functionally comprised of a data collection manager  2110 , a payment-purchase engine  2130 , a data processor  2120 , a fraud scoring engine  2140 , and a sliding scale pricing calculator  2150 . 
     Data processor  2120  interfaces with storage medium  2200  and network interface  2300 . The data processor  2120  enables processor  2100  to locate data on, read data from, and writes data to, these components. 
     Payment-purchase engine  2130  performs payment and purchase transactions, and may do so in conjunction with data collection manager  2110 . 
     Data collection manager  2110  is the structure that facilitates input of sliding scale accountholder information. The sliding scale accountholder information is supplied by the accountholder when they opt-into a sliding scale pricing program. In some embodiments, the data collection manager  2110  is a World-Wide-Web interface that allows the accountholder to load information into the accountholder database  2210 . In other embodiments where the accountholder has supplied sliding scale accountholder information to merchant  1300 , data collection manager  2110  may receive the information directly from merchant  1300 . 
     In some embodiments, data collection manager  2110  may include telephone support, mail processing, or receive third party data extracts stored locally. 
     Sliding scale accountholder information may include, but is not limited to: 
     income information, including pay stubs, tax returns, and social entitlements; 
     insurance information; 
     asset information, including bank accounts, investment accounts, and real property information; 
     debt information, including loan information and credit line information; 
     dependent information, including minor children and other dependents; 
     association information, such as union membership and the like; and 
     privacy information, including which merchants are allowed to access (or denied access to) the above information. 
     Accountholder information is stored in an accountholder database  2210 . 
     In some embodiments, data collection manager  2110  may include telephone support, mail processing, or receive third party data extracts stored locally at accountholder database  2210 . 
     Sliding scale pricing calculator  2150  is configured to apply merchant sliding scale rules (also referred to as a “billing scale entry”), which are saved in a merchant sliding scale database  2220 , to determine whether an accountholder qualifies for sliding scale pricing. A billing scale entry may include billing scale requirements and a billing scale. The billing scale requirements determine the qualifications for the billing scale. When the accountholder qualifies for sliding scale pricing, the sliding scale pricing calculator  2150  recalculates the amount owed on the transaction based on the sliding scale, presenting the proposed recalculated amount to the merchant  1300 . The merchant  1300  can then either adopt or reject the proposed recalculated amount for the transaction. 
     Merchant sliding scale rules may be collected from merchant  1300  on a periodic basis, and may include, but is not limited to: 
     algorithms to calculate fees, and may be based on information stored by payment network  2000 ; 
     information collected by merchant  1300 , such as treatment plans, visit frequency, available assistance; 
     pricing data, including the service rendered; and 
     pricing tiers and cost for each service. 
     These structures may be implemented as hardware, firmware, or software encoded on a computer readable medium, such as storage medium  2200 . Further details of these components are described with their relation to method embodiments below. 
     Computer-readable storage medium  2200  may be a conventional read/write memory such as a magnetic disk drive, floppy disk drive, optical drive, compact-disk read-only-memory (CD-ROM) drive, digital versatile disk (DVD) drive, high definition digital versatile disk (HD-DVD) drive, Blu-ray disc drive, magneto-optical drive, optical drive, flash memory, memory stick, transistor-based memory, magnetic tape or other computer-readable memory device as is known in the art for storing and retrieving data. In some embodiments, computer-readable storage medium  2200  may be remotely located from processor  2100 , and be connected to processor  2100  via a network such as a local area network (LAN), a wide area network (WAN), or the Internet. 
     In addition, as shown in  FIG. 2 , storage medium  2200  may also contain an accountholder database  2210  and a merchant sliding scale database  2220 . Accountholder database  2210  contains information about an accountholder, including payment accounts (and their Primary Account Numbers) associated with an accountholder, an account transaction history, and any information collected by the data collection manager  2110 . Merchant sliding scale database  2220  is configured to store merchant sliding scale rules, which define the conditions and requirements for a sliding scale pricing at a merchant  1300 . Merchant sliding scale rules are provided by merchant  1300  when the merchant decides to allow sliding scale pricing assessments to be made by payment network server  2000 . 
     Network interface  2300  may be any data port as is known in the art for interfacing, communicating or transferring data across a computer network, examples of such networks include Transmission Control Protocol/Internet Protocol (TCP/IP), Ethernet, Fiber Distributed Data Interface (FDDI), token bus, or token ring networks. Network interface  2300  allows payment network server  2000  to communicate with acquirer  1400  and issuer  1500 . 
     We now turn our attention to a method or process embodiment of the present disclosure,  FIGS. 3A-3B . It is understood by those known in the art that instructions for such method embodiments may be stored on their respective computer-readable memory and executed by their respective processors. It is understood by those skilled in the art that other equivalent implementations can exist without departing from the spirit or claims of the invention. 
       FIG. 3  illustrates a process  3000 , from the perspective of a payment network server  2000 , to reduce the computational burden of commercial enterprises supplying sliding scale fees, constructed and operative in accordance with an embodiment of the present disclosure. It is understood by those familiar with the art that process  3000  is a real-time authentication process. 
     At block  3010 , payment network  2000  receives a transaction authorization request from a merchant bank  1400 . The transaction authorization request is received electronically via a network interface  2300 , and contains transaction data including: an account identifier for a payment account (which can be a Primary Account Number), a merchant identifier, an amount of the transaction, a transaction type (purchase, return, cash-advance, and the like), and a sliding scale identifier. The sliding scale identifier identifies the item or items in the transaction that may be subject to a sliding scale payment. Suppose, for example, the merchant offers necessities, such as food, on a need-based sliding scale payment program. In this case, the necessities may be marked for with sliding scale identifier, while luxury items (non-necessities) are not marked. 
     Payment-purchase engine  2130  matches the transaction authorization request with a billing scale entry in the merchant sliding scale database  2220 , block  3020 . Generally, the combination of the merchant identifier and sliding scale identifier of the transaction authorization request is used for the matching. 
     At block  3030 , the sliding scale pricing calculator  2150  retrieves the associated billing scale entry from the merchant sliding scale database  2220 . 
     At decision block  3040 , the sliding scale pricing calculator  2150  determines whether the payment account (identified via the account identifier) has an associated accountholder profile stored in the accountholder database  2210 . 
     If the payment account does not have an accountholder profile, as determined at decision block  3040 , the accountholder automatically does not qualify for the sliding scale pricing via process  3000 , the purchase transaction is updated with the standard amount for the item, block  3050 , and the authorization process  3000  continues at block  3130 . 
     If the payment account has an accountholder profile, as determined at decision block  3040 , the process continues at block  3060 . 
     At block  3060 , the sliding scale pricing calculator  2150  retrieves the account holder profile. 
     The billing scale is applied to the accountholder profile by the sliding scale pricing calculator  2150 , block  3070 . Sliding scale accountholder information is used to access the accountholder&#39;s qualification (need, income, assets, and the like) and calculate payment (pricing tiers, fee algorithms and the like) under the sliding scale pricing program. Algorithms provided by the merchant  1300  are applied to determine the cost of the sliding scale priced goods and services, resulting in a revised suggested bill amount. 
     The suggested bill amount is transmitted to merchant  1300  by network interface  2300  for approval, block  3080 . 
     At this point, the merchant  1300 , can either adopt the suggested bill amount or revise the transaction amount in a merchant transaction amount update. At block  3090 , network interface  2300  receives the merchant transaction amount update. In some embodiments, the merchant transaction amount update may be a new (or same) amount specified for the transaction. In other embodiments, the merchant transaction amount update may be an identifier signifying whether the suggested bill amount or original bill amount should be adopted. 
     When the merchant decides to override the suggested bill amount, as determined at decision block  3100 , the purchase transaction is updated with the merchant revised amount, block  3110 , and the process continues at block  3130 . 
     When the merchant declines to override the suggested bill amount, as determined at decision block  3100 , the purchase transaction is updated with the suggested bill amount, block  31120 , and the process continues at block  3130 . 
     At block  3130 , fraud scoring engine  2140  fraud scores the transaction using the applicable bill amount. Fraud scoring refers to an indication, or likelihood, that a payment transaction is fraudulent. In one embodiment, the fraud scoring engine  2140  provides a number back to the payment card issuer between zero and 1,000, which translates into zero and 100 percent, in tenths of percentage points. The fraud-scoring is based at least in part on the transaction authorization request and prior spending behavior as derived from the accountholder database  2210 . 
     Payment network  2000  transmits the scored transaction authorization request to issuer  1500  for approval, block  3140 . The authorization transaction message including the type of transaction, a merchant identifier, the amount of transaction, and an account identifier; the account identifier may be a Primary Account Number or other representation of an account. 
     Depending upon the issuer  1500  approval of the transaction, as determined at decision block  3150 , an approval message is sent to merchant  1300 , block  3170 , or a decline message is sent, block  3160 . 
     Use Examples 
     It is understood that the system described herein may be applied to a variety of different applications. This section describes some of the possible applications. 
     In one embodiment, the system described herein may be used in a medical provider context. Suppose an accountholder requires medical care from a number of different area clinics. The accountholder provides all of their relevant income, asset, and dependent information to the accountholder database  2210  as an alternative to providing their information to each individual clinic. The clinics provide their pricing algorithms to the merchant sliding scale database  2220 . As a result, the clinics are able to apply sliding scale payments without the administrative overhead of collecting the patient&#39;s information. 
     In an insurance-related embodiment, insurance coverage may be used to calculate the sliding scale payments. The accountholder data would include any insurance policy information, while merchant sliding scale database  2220  would include insurance policy rules, which define the conditions and requirements for a sliding scale (insurance policy) pricing at a merchant  1300 . In another embodiment, an insurance company could be a third-party payer and the insurance company would only be charged the patient&#39;s liability. 
     In an alternate embodiment, a merchant  1300  changes their fees for different, established pricing tiers. The merchant  1300  can update their pricing with the merchant sliding scale database  2220  and all future billing is handled without having to make updates within their own system. 
     In another embodiment, the system described herein may be used in a service provider context. Suppose a service provider, such as a lawyer, bills clients based on an hourly rate. Instead of passing a transaction amount to the payment network  2000 , the service provider passes the number of hourly units that the accountholder utilized. A fee is determined and multiplied times the number of hours utilized in order to calculate the charge to the accountholder. 
     In some embodiments, accountholders may opt to share their sliding scale data (stored within the accountholder database) with some merchants  1300 , but not others. For example, an accountholder may decide to share their sliding scale information with their psychotherapist, but elect to withhold the same information from their attorney. As a result, sliding scale payments are calculated during transaction processing for psychotherapy, but their lawyer must handle their billing without the services of process  3000 . 
     It is understood by those familiar with the art that the system described herein may be implemented in hardware, firmware, or software encoded on a non-transitory computer-readable storage medium. 
     The previous description of the embodiments is provided to enable any person skilled in the art to practice the disclosure. The various modifications to these embodiments will be readily apparent to those skilled in the art, and the generic principles defined herein may be applied to other embodiments without the use of inventive faculty. Thus, the present disclosure is not intended to be limited to the embodiments shown herein, but is to be accorded the widest scope consistent with the principles and novel features disclosed herein.