Patent ID: 7386503

Claim:
A method for processing financial transactions by an agency other than a merchant, the method comprising: determining with a first scoring process, a first risk score for a financial transaction involving a payment made to the merchant wherein the first risk score corresponds to a probability of the financial transaction being returned; providing a plurality of variables, wherein at least some of the variables directly relate to a potential profit or loss generated by the financial transaction; determining with a second scoring process, a profitability assessment score based at least in part on the plurality of variables and the first risk score, wherein the profitability assessment score is indicative of the profit or loss generated by the financial transaction, wherein determining the profitability assessment score comprises using a formula comprising Profitability Score=(Amt×R)−P R (Amt−P c (Amt+(P Svc ×SvcFee)+(P Other ×Other))+C EX ), wherein Amt=transaction amount, R=effective rate charged to the merchants, P R =probability of return, P Svc =probability to collect a service fee if transaction amount is collected, SvcFee=service fee, P Other =probability to collect other fees if transaction amount is collected, Other=other fees, C EX =collection expenses; and authorizing the financial transaction based at least in part on the profitability assessment score.