Abstract:
A system for managing a securities-based card spending account is disclosed. The system comprises a processor and an account comprising one or more securities. A first set of instructions is executable on the processor that is capable of allowing the setting of trade parameters defining percentages of the one or more securities to be traded to cover a purchase. A second set of instructions is executable on the processor for triggering one or more trades of the one or more securities according to the percentages defined in the trade parameters.

Description:
FIELD OF THE INVENTION 
       [0001]    The present invention generally relates to a securities based card spending settlement management system and method. More specifically, the invention relates to a system and method for automatic approval of college savings plan purchases, and funding of such purchases through the automated triggering of trades. 
       BACKGROUND OF THE INVENTION 
       [0002]    A 529 plan is a tax-advantaged investment vehicle in the United States designed to encourage saving for the future higher education expenses of a designated beneficiary. 529 plans are named after section 529 of the Internal Revenue Code 26 U.S.C. §529. While most plans allow investors from out of state, there can be significant state tax advantages and other benefits, such as matching grant and scholarship opportunities, protection from creditors and exemption from state financial aid calculations for investors who invest in 529 plans in their state of residence. 
         [0003]    There are two types of 529 plans: prepaid and savings. Prepaid plans allow one to purchase tuition credits at today&#39;s rates to be used in the future. Therefore, performance is based upon tuition inflation. Currently, 12 states provide a prepaid tuition plan. Savings plans are different in that all growth is based upon market performance of the underlying investments, which typically consist of mutual funds. Most 529 savings plans offer a variety of age-based asset allocation options where the underlying investments become more conservative as the beneficiary gets closer to college age. 
         [0004]    Although states administer savings plans, record-keeping and administrative services for many savings plans are usually delegated to a mutual fund company or other financial services company. 
         [0005]    With the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), 529 plans gained their current prominence and tax advantages. Qualified distributions from 529 plans for qualified higher education expenses are exempt from federal income tax. 
         [0006]    According to the way the current system works in most states, a benefactor establishes an account and contributes assets or funds to it. Section 529 (c)(1)(B) of the Code states that the amount put into the account by a contributing benefactor for a designated beneficiary will not be included in the benefactor&#39;s gross income with respect to any distribution or earnings under the program. That is, no federal tax is due on money withdrawn from a 529 investment account, a long term savings account (LSA), or a similar type account whose funds are used for the payment of qualified higher education expenses (qualified purchases or items) if the money is used to pay for qualified and substantiated expenses incurred for the beneficiary&#39;s higher education. 
         [0007]    Money from a 529 plan can be used for tuition, fees, books, supplies and equipment required for study at any accredited college, university or vocational school in the United States and at some foreign universities. 
         [0008]    The money can also be used for room and board, as long as the fund beneficiary is at least a half-time student. Off-campus housing costs are covered up to the allowance for room and board that the college includes in its cost of attendance for federal financial-aid purposes. A distribution from a 529 plan that is not used for qualified educational expenses is subject to income tax and an additional 10% early-distribution penalty with little exception (for example, if the beneficiary becomes disabled), and possibly state taxes and penalties too. 
         [0009]    U.S. Patent Application Serial No. 2004/0167844A states that a major problem with managing these programs and accounts is that present technology does not adequately address the qualification, substantiation, and accounting with respect to the accounts, nor the tax reporting that is required for purchases and payments of a beneficiaries&#39; higher education expenses paid for with funds from a Section 529 investment account. First, the Internal Revenue Service (IRS) presently offers no guidance to the benefactor, consumer, investment manager, beneficiary, tax advisor, or accountant as to how to qualify or substantiate purchases made with funds from a 529 account for the benefit of the beneficiary. Second, state sponsored tuition reimbursement programs do not have a computer based system capable of handling the current number of accounts and their associated asset base, much less those which are estimated to soon be in place. 
         [0010]    However, the prior art, including the above-cited application, does not address handling completing purchases using a college savings account that is comprised of securities, which may not have immediate liquidity. These and other objectives are provided by the system and methods described herein. 
       SUMMARY OF THE INVENTION 
       [0011]    According to one preferred embodiment, a system for managing a securities-based card spending account comprises a processor, an account comprising one or more securities, a first set of instructions executable on the processor capable of allowing the setting of trade parameters defining percentages of the one or more securities to be traded to cover a purchase, and a second set of instructions executable on the processor for triggering one or more trades of the one or more securities according to the percentages defined in the trade parameters. 
         [0012]    According to another preferred embodiment, a method is for managing a securities-based card spending account wherein the account comprises one or more securities. The method comprises allowing the setting of trade parameters defining percentages of the one or more securities to be traded to cover a purchase, and triggering one or more trades of the one or more securities according to the percentages defined in the trade parameters. 
         [0013]    According to yet another preferred embodiment, a point of sale system comprises a processor, a card reader, a database of one or more issuer identification numbers capable of identifying one or more cards for the purchase of qualified items, a first set of instructions executable on the processor capable of comparing an issuer identification number from a card read by the card reader to the database of one or more issuer identification numbers to determine if the card is one of the cards for the purchase of qualified items, a second set of instructions executable on the processor capable qualifying the items if the first set of instructions determines that the card is one of the cards for the purchase of qualified items, and a third set of instructions executable on the processor for transmitting a transaction to trigger a trade of one or more securities to cover the purchase of qualified items. 
         [0014]    According to yet another preferred embodiment, a method of qualifying items in a point of sale system comprises storing a database of one or more issuer identification numbers capable of identifying one or more cards for the purchase of qualified items, comparing an issuer identification number from a card read by a card reader to the database of one or more issuer identification numbers to determine if the card is one of the cards for the purchase of qualified items, qualifying one or more items for purchase upon determining that the card is one of the cards for the purchase of qualified items, and transmitting a transaction for the qualified purchases to trigger a trade of one or more securities to cover the purchase of qualified items. 
         [0015]    In yet another preferred embodiment, a system for managing a securities-based card spending account, comprises a processor, an account comprising one or more securities, a first set of instructions for setting a spending limit for a securities-based card, and a second set of instructions executable on the processor for triggering one or more trades of the one or more securities to cover a purchase using the securities-based card if the purchase does not cause the spending limit to be exceeded. 
     
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
         [0016]      FIG. 1  is a system entity and flow diagram that presents data flow in one embodiment of a college savings account spending and payment system; 
           [0017]      FIG. 2A  is a diagrammatic representation of exemplary database tables used in a database for the embodiment of  FIG. 1 ; 
           [0018]      FIG. 2B  is a diagrammatic representation of further exemplary database tables of the database of  FIG. 2A ; 
           [0019]      FIG. 3  is a diagrammatic illustration of a debit or credit card and the information stored thereon that can be used with the embodiment of  FIG. 1 , 
           [0020]      FIG. 4  is a percentage distribution screen that may be used with the embodiment of  FIG. 1 ; 
           [0021]      FIG. 5  is a flow chart that illustrates steps performed by a system for initially setting up and issuing a card for an exemplary 529 plan for a 529 institution according to the embodiment of  FIG. 1 ; 
           [0022]      FIG. 6  is an exemplary login screen that may be used with the embodiment of  FIG. 1 ; 
           [0023]      FIG. 7  is an exemplary accounts/beneficiaries selection screen according the embodiment of  FIG. 1 ; 
           [0024]      FIG. 8  is an exemplary federal school entry code screen according to the embodiment of  FIG. 1 ; 
           [0025]      FIG. 9  is an exemplary spending frequency cap screen according to the embodiment of  FIG. 1 ; 
           [0026]      FIG. 10  is an exemplary threshold entry screen according to the embodiment of  FIG. 1 ; 
           [0027]      FIG. 11  is an exemplary card delivery information screen according to the embodiment of  FIG. 1 ; 
           [0028]      FIGS. 12A-12B  is a flow diagram that illustrates steps performed in an exemplary transaction performed by a card holder according to the embodiment of  FIG. 1 ; 
           [0029]      FIG. 13  is a flow diagram for periodic or real-time processing for POS data uploads according to the embodiment of  FIG. 1 ; and 
           [0030]      FIG. 14  is illustrates an alternative payment method that can be used with the embodiment of  FIG. 1 . 
       
    
    
     DETAILED DESCRIPTION OF THE INVENTION 
       [0031]    The following detailed description is of the best currently contemplated modes of carrying out exemplary embodiments of the invention. The description is not to be taken in a limiting sense, but is made merely for the purpose of illustrating the general principles of the invention, since the scope of the invention is best defined by the appended claims. 
         [0032]    Various inventive features are described below that can each be used independently of one another or in combination with other features. 
         [0033]    Broadly, embodiments of the present invention generally provide a securities based card spending settlement management system and method. With reference to  FIG. 1 , a system entity and flow diagram presents an overview of one embodiment of the system. A 529 Institution  100  may comprise a mutual fund company or other financial services company. The 529 institution  100  provides investment and distribution services, including but not limited to, collecting contributions from plan owners  50 , purchasing securities for the plan, including in the form of mutual funds, and distributing cash funds to or on behalf of the beneficiary for a 529 or other investment account  190  (herein called  529  account) for purchases using 529 plan funds, which may be provided to a merchant  130  selling qualified products to a card holder  102  using a credit or debit card  104 . The merchant may comprise, by way of example, and not by way of limitation, on campus/off campus bookstores, retail supply stores, university registrars, university cashiers, online merchants, and the like (herein collectively referred to as registered merchants  130 ). The card holder  102  may be either the beneficiary for the 529 account  190  or the owner  50  of the 529 account  190 , or both. 
         [0034]    In one embodiment, when a beneficiary for the 529 account  190  is ready to begin his or her higher education, a credit or debit card  104  may be provided to the owner  50 , and the beneficiary if the owner desires, who may each become a card holder  102  to each receive a card  104  created and provided from the 529 institution  100 . Alternatively, the 529 institution  100  may have a third party provider create and provide the card  104  to the owner  50 , and beneficiary if desired. Herein, one or more card holders  102  will be referred to as the card holder  102  in the singular, but it is to be understood that there may be one or more card holders  102  tied to each account  190 . 
         [0035]    In one embodiment, the issued card  104  may be directly linked to the cash portion  192  of a 529 account  190 , as each account may have a cash or cash equivalent portion  192  (herein called cash portion  192 ) and a securities portion  194 . 
         [0036]    As those skilled in the art would recognize, typically, when the owner  50  invests in a 529 account  190  for the beneficiary, the owner  50  may work with brokers, agents and/or financial advisors of the 529 institution  100 , or other independent brokers, agents and/or financial advisors that sell 529 plans, to maximize his or her investment by purchasing shares in various securities offered by the 529 institution  100 . As those skilled in the art would recognize, such accounts would be referred to as advisor-sold accounts. 
         [0037]    As those skilled in the art would recognize, alternatively, the owner  50  may be able to start, manage, and issue cards without assistance of a broker, agent, or financial advisor directly from the 529 institution  100  using an online or paper-mailed account setup and management system. Those skilled in the art would recognize that self started and managed accounts would be referred to as direct-sold accounts. 
         [0038]    In one embodiment, merchant codes may be entered into a service center database  152  that may specify registered merchants  130  from which the card holder  102  may make qualified purchases. For each 529 institution  100 , a subset of the merchant codes may be downloaded to the 529 institution&#39;s local database  114  to indicate which merchants are registered to accept the card  104 . If the card holder  102  does go to an unregistered merchant to make a purchase of a qualified item, then that can be dealt with in several ways depending on the preference of the service center  150  and/or the 520 institution  100 . By way of example and not by way of limitation, the service center  150 , may be notified that the merchant is, in fact, unregistered, and an e-mail, mail, or other communication may be automatically sent to the unregistered merchant to offer the unregistered merchant to become a registered merchant  130 . In one embodiment, the 529 institution  100  may notify the service center  150  upon rejection of a transaction from an unregistered merchant, in which case service center staff may follow-up with the unregistered merchant in an effort to register the merchant. 
         [0039]    With reference to  FIGS. 2A-2B , a diagrammatic representation of exemplary tables of the service center database  152  used in the embodiment of  FIG. 1  is shown. In one embodiment, by way of example, and not by way of limitation, in a registered merchant table  160 , each merchant record  162  may store a merchant code  164  to identify the registered merchants  130  for the 529 plan offered by the 529 institution  100 . In one embodiment, the service center database  152  may push the registered merchant table  160  to the local  529  institution database  114 . 
         [0040]    As explained below, in one embodiment, each time the card holder  102  presents his or her card  104 , the merchant&#39;s POS system may determine whether to run a qualification process or not. In one embodiment, only registered merchants  150  may have a qualification process in their POS system  108 . Unregistered merchants may not have the qualification process for qualifying individual items in the POS system  108 , and thus may read the card  104  as a non-529 institution issued credit card. Registered merchants  150 , having completed the qualification process, may then pass the subtotal of only qualified items to the credit card machine  106 , which then may process the transaction using the card  104 . When the transaction arrives at the 529 institution  100 , the 529 institution  100  may read the merchant code and recognize it as identifying a registered merchant  150  within the local  529  institution database  114  and proceed with the next step of the transaction as described below. If the transaction is from an unregistered merchant, when the transaction arrives at the 529 institution  100 , the 529 institution  100  may read the merchant code and may not recognize it as identifying a registered merchant  150  and decline the transaction. Additionally, the 529 institution  100  may send a message to the service center  150  notifying the service center of the unregistered merchant to allow service center staff to contact the unregistered merchant and attempt to register the merchant. 
         [0041]    In one embodiment, universal purchase codes (UPCs), ISBN codes, quick response (QR) or other product codes (herein collectively referred to as product codes) of qualified items may each be entered by each merchant  130  into their local POS database  110 . In one embodiment, after each merchant  130  enters the product data, it may be uploaded to a data table  170  ( FIG. 2A ) within the service center database  152 . The product code  174  of each qualified product, such as a qualified book or qualified food item, may be entered into a record  172  in the product data table  170 . In one embodiment, these qualified product codes  174  may be downloaded to a local database  110  of the POS  108  of each of the new registered merchants  130  as a convenience so they may have a head start on entering their own product qualification data. Alternatively, the initial product data may be sent to or from the registered merchant  130  by CD-ROM, or other readable media. 
         [0042]    With reference to  FIG. 3 , a diagrammatic illustration of a debit or credit card  104  and the information stored thereon that can be used with the embodiment of  FIG. 1  is shown. Bank card numbers  200  are found on payment cards  104 , such as credit cards and debit cards. They have a certain amount of internal structure and share a common numbering scheme. Bank card numbers are allocated in accordance with ISO/IEC 7812. The bank card number  200  merely identifies the card  104 , which is then electronically associated with a particular card holder  102  and also to the card holder&#39;s designated account  190 . An ISO/IEC 7812 number  200  is typically 16 digits in length. It comprises:
       a six-digit issuer identification number (IIN)  202 , the first digit of which is the major industry identifier (MII),   a variable length (up to 12 digits) individual account identifier,   a single check digit calculated using the Luhn algorithm.       
 
         [0046]    In one embodiment, the six-digit IIN  202  of the card  104  may identify the 529 institution  100  for which the card  104  is issued, and the whole card number  200  may identify the account to which the card  104  is tied. This information may used by the registered merchant&#39;s POS system  108  to recognize the card  104  as one linked to a 529 plan from the 529 institution  100 . 
         [0047]    As noted above, the POS systems  108  of the registered merchants  130  may store the six digit IIN numbers for the 529 plans that may be used for sales at the merchant  130 , and the product codes  174  for the products that may be purchased for each of those IIN  202 . The IIN  202  may trigger the POS system  108  to run a qualification process for products scheduled for purchase against qualified products in the local database  110 . In one embodiment, the registered merchant  130  may not have a POS system. In those cases, the registered merchant  130  may process the card purchase under IRS rules and regulations. 
         [0048]    Each 529 plan, or state regulation, may have different rules on how much of the 529 account  190  needs to be in cash or cash equivalents, at specific times or ages of the beneficiary  102 . However, when the beneficiary starts his or her education, such rules and regulations may still allow much of the 529 account  190  to remain as a securities portion  194 . For example, when the card holder  102  receives the card  104 , the owner  50  may have decided with his or her financial advisor to keep fifty percent (50%) of the 529 account  190  as the securities portion  194  of the account  190 . This currently has the potential of causing issues when attempting to make immediate purchases at a registered merchant  130 . 
         [0049]    In one embodiment, in order to solve this issue, a trade-trigger system may be implemented. With reference to  FIG. 4 , when the owner  50  requests that a card  104  is issued to a card holder  102  for the 529 account  190 , the owner  50 , with or without the help of the financial advisor at the 529 institution  100 , may be provided with an online percentage distribution screen  300  for setting up parameters of the 529 account  190  for trade-trigger distributions. These parameters may include, by way of example and not by way of limitation, percentage of distributions from money markets and other cash equivalents, mutual funds, exchange traded funds, or other securities investments for which trades are automatically triggered as described below when the card holder  102  makes a purchase. 
         [0050]    By way of example, and not by way of limitation, the owner  50  may select the percentage of each type of fund  302 ,  304 ,  306  within the account  190  for which a trade may be automatically trigged upon a qualified purchase. For example, when the card holder  102  swipes the card  104  to complete a purchase, then the pre-defined allocation by the owner  50  is applied. In one embodiment, there may be a requirement that the total of the pre-defined allocation percentages may equal 100%. However, the owner may change the allocations at any time, as long as this 100% total requirement is met. For example, for a single purchase, the owner  50  may have pre-defined for 49% of that purchase to come out of one type of fund, 50% of the that same purchase to come out of another type of fund, and 1% to come out of yet another type of fund. In one embodiment, the trade of each fund may be simultaneously triggered. In one embodiment, any combination of percentages may be selected, as long as the total is 100% for all funds for each transaction. 
         [0051]    Further, the owner may wish to change the number and types of funds in which the securities portion  194  of the account  190  is invested. However, the owner must update the pre-defined allocations. In one embodiment, the pre-defined allocations for triggering trades when a transaction is received may still need to equal 100%. 
         [0052]    In one embodiment, the owner  50  may work with the 529 institution  100  for all account  190  related services, issues, changes, card issuing, and/or other administrative needs. However, in another embodiment, many or all of these tasks may be performed online. For example, for issuing cards  104  for the account  190 , an online process may be very helpful to some owners  50 . 
         [0053]    With reference to  FIG. 5 , a flow chart illustrates steps performed by the system for initially setting up and issuing a card  104  for an exemplary 529 plan for a 529 institution  100 . In step  500 , the owner  50  may login with a login ID and password provided by the 529 institution  100 . With reference to  FIG. 6 , an exemplary login screen  600  that may be used is shown. 
         [0054]    With reference back to  FIG. 5 , in step  502 , the owner may next be provided with a selection screen of accounts/beneficiaries. With reference to  FIG. 7 , an exemplary accounts/beneficiaries selection screen  700  is shown. In screen  700 , a selection of accounts and paired beneficiaries may be presented for highlighting. The owner  50  may use the arrow keys or a mouse to select the account and beneficiary for which the card  104  is to be issued. 
         [0055]    With reference back to  FIG. 5 , after selection of the account/beneficiary, in step  504 , the owner  50  may next enter the federal school code for the institution the beneficiary selected in step  502  may be attending. With reference to  FIG. 8 , an exemplary federal school entry code screen  800  is shown. The owner  50  may type in the federal school code that is eligible for use with the 529 plan at the 529 institution  100  in entry field  802  on screen  800 . In one embodiment, a hyperlink  804  may be provided to produce a selection list of eligible learning institutions. Upon selection, the code for the eligible institution may be automatically populated in entry field  802 . 
         [0056]    With reference back to  FIG. 5 , in step  505 , the owner  50  may be directed to the percentage distribution screen  300  described and shown in  FIG. 4 . As described above with respect to  FIG. 4 , the owner  50  may select the allocations of securities for which trades are triggered upon receipt of a transaction for a purchase using the card  104 . 
         [0057]    In step  506 , the owner  50  may decide whether to set a spending limit for the card holder  102 . For example, the owner  50  may wish to set an annual or per semester spending limit, or no limit at all. With reference to  FIG. 9 , an exemplary spending frequency cap screen  900  that may be presented to the owner  50  is shown. The owner  50  may select whether to set spending limits on the card holder  102  in selection box  902 . If anything but the no limit selection is selected by the owner  50 , then entry box  904  may appear where the owner  50  may enter the limit amount set for the time period selected in selection box  902 , step  510  in  FIG. 5 . 
         [0058]    In step  512 , the owner  50  is given the option to set a liquidation threshold for the 529 account  190 . With reference to  FIG. 10 , an exemplary threshold entry screen  1000  on which the owner  50  may set the threshold is shown. In step  514  of  FIG. 5 , if the owner checks checkmark box  1002 , then a threshold entry field  1004  may appear in which the owner  50  may enter the threshold amount. This amount entered in field  1004  may be the threshold value at which the owner  50  would wish the entire 529 account  190  to be converted to cash or cash equivalent. 
         [0059]    With reference back to  FIG. 5 , in step  516 , the owner  50  may select delivery information and the school logo to appear on the card  104 . With reference to  FIG. 11 , an exemplary card delivery information screen  1100  that may be used for step  516  is shown. For example, a field  1102  may allow the owner  50  to select how many cards to issue (e.g., to owner  50  and/or the beneficiary), and in field  1104 , the owner  50  may select the school logo to appear on the card  104 , subject to allowance by the school. Further, by checking box  1106 , the owner  50  may specify whether a different address should or should not be used to send the card  104  to the beneficiary (for example the beneficiary&#39;s campus address). In one embodiment, regulations may require one or more of the cards issued to go to the owner&#39;s address on file. 
         [0060]    After step  516 , the card  104  is produced and sent to the card holder(s)  102 , step  518 . In one embodiment, in step  520 , a data table of card numbers  200  may be uploaded by the 529 institution  100  to the service center database  152 . With reference to  FIG. 2B , an exemplary card number table  210  in the service center database  152  that may be used is shown. The record  220  may contain, by way of example, and not by way of limitation, the card number  200  for each card holder  102 , the card holders&#39; names  222 , and other identifying information not shown, including the card holders&#39; address information, and the like. 
         [0061]    For every IIN  202  utilized by the 529 plan cards  104 , the service center database  152  may store in an IIN table  180  a record  182  representing the IIN  202 . Referring back to  FIG. 1 , when a new IIN  202  is created, the POS systems  106  for the registered merchants  130  may be updated from table  180  to recognize the new IIN  202 . 
         [0062]    With reference to  FIGS. 12A-12B , a flow diagram illustrates steps performed in an exemplary transaction performed by the card holder  102  with a merchant  130 . Starting with specific reference to  FIG. 12A , in step  1200 , after the card holder  102  has selected one or more items to purchase using the card  104 , in step  1201 , the merchant  130  or card holder  102  may swipe the card  104  using the card machine  106 . The POS system  108  may read the card number  200  data from the card  104  (for those card machines  108  tied to a POS system  106 ). In step  1202 , the IIN is parsed. 
         [0063]    In one embodiment, IIN information has been downloaded from the service center database  152 , the credit/debit card provider  120 , or the 529 institution  100 . As noted before, each 529 plan may be associated with an IIN  202  created for that plan. In step  1204 , the POS system  108  may check against the downloaded IINs  202  to determine if the card presented is linked to a  529  plan of the 529 institution  100 . If not, the card  104  is processed through a credit card processing network in step  1208  as is currently performed. 
         [0064]    If the IIN  202  is found by the POS system  108  to represent a valid card  104  for a 529 plan that can be used at the registered merchant  130 , then, starting with step  1210 , the POS system  108  may step through each scanned product code for the products that the card holder  102  has presented to the merchant  108  for purchase. In step  1212 , the product code for each product is checked against the local database  110 . If the product code for the product is a qualified product code, then the POS system  108  does not reject the purchase of the particular product, and the price for the product is added to the total purchase for qualified items in step  1214 . Otherwise, if the product code is rejected for purchase in step  1216 , then the price of the unqualified item for that product code may be added to a remaining balance to be otherwise paid for by other means (using cash, check, or other credit/debit card) not using the 529 plan card  104 , step  1216 . 
         [0065]    In step  1218 , the POS system  108  continues processing the product codes of the products to be purchased by the card holder  102  through step  1220  and back to step  1210 , until all product codes have been processed by the POS system  108 . When processing of the product codes has completed, processing continues with particular reference to  FIG. 12B . 
         [0066]    In step  1222 , the transaction for the total of the qualified purchases is sent to the credit/debit provider ( 120  in  FIG. 1 ). In step  1224 , the credit/debit provider  120  may forward the transaction to the 529 institution  100  for approval. The 529 institution may then check the amount of the forwarded transaction against the accumulated spending limit set in step  508  of  FIG. 5 , and on screen  900  of  FIG. 9 , step  1226 . If the spending limit has been reached, then the 529 institution  100  may send a rejection message back the debit/credit card provider  120 , which may reject the transaction from the merchant  130  in step  1228 . 
         [0067]    If the spending limit has not been reached, in step  1234 , all of the pending trades may be calculated that are present in a trade queue ( 106  in  FIG. 1 ) for the account  190 . The trade queue  106  may be where the pending trades are held, which may be both buy and sell orders, for the account  190  until the trade is executed at time T. However, as explained below, even after a trade is executed at time T, there is still a waiting period before the trade is actually settled. Thus, the total trade balance is calculated, including adding buy orders waiting in the queue, minus the total value of sell orders waiting in the queue, and plus and minus all executed buys and sells that have not been settled, to determine the total credit balance for the account  190 . 
         [0068]    In step  1236 , the amount of the transaction to be covered is compared to the current credit value of the securities determined in step  1234 , plus a buffer X for market fluctuation. If this threshold is exceeded by the pending purchase transaction, then processing moves to step  1228  for rejection of the purchase, which may comprise sending a decline notification message to the credit card machine  106 . However, if the threshold is not exceeded, in step  1238 , then the trigger to sell securities is added to a trade queue ( 106  in  FIG. 1 ). The trade queue comprises an electronic queue of waiting electronic buy and sell orders to be executed at the next time T at which each particular trade may be executed. Electronic trade queues are well known to those skilled in the art. Many institutions, such as Fidelity Investments, and the like, typically employ electronic trade queues, many of which could be used as the electronic trade queue  106  shown in  FIG. 1 . In one embodiment, upon the trigger, a sell trade amount is added to the queue, split across the predetermined percentages of securities established in step  505  in  FIG. 5 , and in screen  300  in  FIG. 4 . However, the trigger step of step  1238  does not cause an instant settlement of securities, as even with electronic trading, their currently is no means for any such instant settlement. The card holder  102  still needs instant approval of the transaction received from the merchant  130 . 
         [0069]    Due to the calculation made in step  1236 , instant approval of the transaction may be provided in step  1240 . In one embodiment, even though funds are not yet available in the cash equivalent portion  192  of the account  190  due to impending settlement, either the 529 institution  100 , the credit/debit provider  120  and/or a third party escrow agent may have an escrow account ( 112  in  FIG. 1 ) that temporary provides funding to cover the transaction to provide such instant approval pending the trade and settlement per the trade orders on the trade queue  106 . In the case where the credit/debit provider  120  (which may be a bank for example) is the entity holding the escrow account, the credit balance may be held with respect to the individual card account. 
         [0070]    Under U.S. securities regulations, the settlement cycle is known as T+3, shorthand for trade date plus three days. In step  1242 , the trades in the queue may then execute on the next trade date. It should also be mentioned that other types of investments, such as money market investments, may even have a shorter settlement time, for example T+1. Once the settlement of the trade is completed in step  1244 , any credit balance due to pending trades for the escrow account  112  can be settled. 
         [0071]    With reference to  FIG. 13 , a flow diagram for periodic or real-time processing for uploading POS data is shown. In one embodiment, it may be advantageous to provide for a periodic upload of sales transactions (which may comprise itemized purchases) directly from the POS system  108  to the service center database  152  for further processing by the service center  150 . By way of example, and not by way of limitation, starting with step  1300 , the POS system  108  may upload the sales data, for example, for a 24 hour time period, or other period as agreed upon by the parties involved. In step  1302 , after the upload by the POS system  108  into the service center database  152 , the uploaded data may be parsed by the service center  150  before further processing. 
         [0072]    In step  1304 , each transaction may be electronically reviewed for inconsistencies using well known algorithms for credit card fraud, and the like. However, in one embodiment other algorithms may be applied to detect abnormalities with respect to 529 plan purchases. For example, while a transaction for a computer printer may have been a qualified transaction, if three computer printers are bought within the same transaction, or within the same year when compared to the same card holder&#39;s other transactions, then the a inconsistency may be flagged. In step  1306 , if one or more inconsistencies are detected, then the data from the transaction and a notification may be sent to an investigation team member, step  1308 . This provides a human check or confirmation of the inconsistency, and allows the team member or management staff to take further action, such as suspending the credit card while the card holder  102 , owner  50  and/or merchant is contacted to further investigate the issue. 
         [0073]    In step  1310 , each transaction is stored. Storage of the transactions provides, as stated above, a means to compare different transactions to detect inter-transactional inconsistencies, and also so that the owner  50  and/or card holder  102  may be provided with transaction records quarterly or annually, or for review by the Internal Revenue Service (IRS) for official audits. 
         [0074]    With reference to  FIG. 14 , an alternative payment method in the embodiment of a QR code on a smart phone is illustrated. Instead of issuing a card  104  to the card holder, the card holder  102  may have a mobile app downloaded to his or her smartphone  1400  that can be activated to produce a payment QR code  105  on the smartphone screen. In one embodiment, in addition to a traditional card machine  108 , the POS system  108  may further be attached to a QR code reader or combination QR and bar code reader  109  that can be used to both scan product codes and the payment QR code  105 . From the payment QR code  105 , the POS system may read the card number  200 , including the IIN  202  as described above, and processing of the payment may the proceed as described above. 
         [0075]    Those skilled in the art may recognize that other current and further payment methods may be used over and above a traditional debit/credit card  104  or QR code  105  with the systems and methods described herein. By way of example and not by way of limitation, emerging technologies in Bluetooth or near field communication (NFC) technologies may be used to transmit payment information to the POS system  108  during purchasing. 
         [0076]    Further, account management by the owner  50  or the card holder  102  may be accomplished using the same mobile app or a different mobile app for account management. Still further, account management may also be performed through a voice response system, or the like, providing the owner  50  and card holder  102  with multiple ways to manage the 529 account  190 , including changing the securities portfolio for the securities portion  194 , executing trades, or the like. 
         [0077]    Those skilled in the art would recognize that the system and method described herein could easily be applied to other types of accounts to make qualified purchases, including, but not limited to, Coverdell education savings accounts (ESAs), flexible spending accounts (FSAs), cafeteria plans, IRA distributions, or the like. Some of these accounts typically have mixed mutual funds and individual securities investments for the securities portion  194  of the account  190 , or securities only, with no mutual funds. Thus, over and above the distribution percentages for fund types  302 ,  304  and  306  illustrated in screen  300  in  FIG. 4 , a real-time trade request system may be used through the internet, mobile app, live customer service, a financial advisor or a voice response system to fund the cash or cash equivalents portion of the account  190 . 
         [0078]    It should be understood, of course, that the foregoing relates to exemplary embodiments of the invention and that modifications may be made without departing from the spirit and scope of the invention as set forth in the following claims.