Patent ID: 7801813

Claim:
A computer-implemented method for impounding escrow funds by an electronic funds processor (EFP) in a computer system from credit or debit card transactions of a merchant associated with a closeout period, the method comprising the steps of: determining a first sales amount in the computer system EFP associated with one or more non-credit or non-debit card transactions of the merchant during the closeout period; determining a second sales amount in the computer system EFP associated with one or more credit or non-debit card transactions of the merchant during the closeout period; determining an escrow amount in the computer system EFP based on the first sales amount, wherein the escrow amount is determined as one of: (1) a predetermined percentage of one or more of the first and second sales amounts, and (2) a sum of a predetermined percentage of at least one of the first and second sales amounts, and wherein said predetermined percentage comprises: (1) a merchant tax rate, and (2) an estimate for generating escrow funds sufficient to pay a predetermined sum from the one or more of the first and second sales amounts over a predetermined number of sales periods; determining in the computer system EFP whether the second sales amount exceeds the escrow amount; crediting an escrow account with the escrow amount in the computer system EFP when the second sales amount exceeds the escrow amount; crediting a merchant account with an amount equal to the difference between the second sales amount and the escrow amount; determining a payable amount to be paid from the escrow account; and debiting the payable amount from the escrow account, wherein the payable amount is debited for payment to one or more of a local tax authority, a state tax authority, a federal tax authority, a judicial authority, a recipient of a legal judgment and a merchant.