Patent ID: 7283977

Claim:
An automated system for reducing risk in payment-based transactions comprising: a payment bank subsystem, operated by a payment bank, that processes a payment-based transaction wherein payment is made from an account holder to a counterparty, wherein the payment bank subsystem includes a payment queue storing a first instruction authorizing payment from the account holder to the counterparty during processing of the transaction; and a module, integrated with the payment bank subsystem, that stores at least one user-supplied risk parameter associated with the account holder, and includes a risk filter routine that operates during processing of the transaction to determine whether to selectively reject payment authorized by the first instruction stored in the payment queue based upon the at least one user-supplied risk parameter associated with the counterparty; wherein said risk filter routine automatically generates an available balance for the counterparty based upon the at least one user-supplied risk parameter, payments made by the account holder, and payments received by the account holder; automatically accesses said first instruction stored in the payment queue; automatically determines whether to selectively reject payment authorized by the first instruction based upon the available balance; wherein said risk filter routine automatically rejects payment authorized by the first instruction in the event that the amount of payment authorized by the first instruction exceeds the available balance; and wherein the risk filter routine automatically returns the first instruction to the payment queue for later re-evaluation.