Patent ID: 7650308

Claim:
A method of authorizing a payment transaction request through a payment network for a product under a flexible spending account of a consumer, said method comprising a plurality of steps, each said step being performed by one or more network devices by the execution of software, each said network device being in communication with the payment network, wherein the steps include: obtaining a flexible spending account identifier for the flexible spending account, and a product inventory code corresponding to the product; forming a payment network authorization request message requesting use of the flexible spending account for the payment transaction for the product, wherein the payment network authorization request message includes: the flexible spending account identifier for the flexible spending account; the product inventory code corresponding to the product; a total purchase amount for the product; and an address of a merchant; sending the payment network authorization request message from the address of the merchant to an address of an acquirer for the merchant; sending the payment network authorization request message from the address of the acquirer for the merchant to an address of a payment network system; sending the payment network authorization request message from the address of the payment network system to an address of an issuer of the flexible spending account; determining, using the payment network authorization request message, that the flexible spending account identifier is valid by matching the flexible spending account identifier against a stored set of flexible spending account identifiers, and if so then: determining that the product inventory code matches a qualified product category under the flexible spending account, and if so then: determining a qualified amount of the total purchase amount eligible for use of the flexible spending account for the payment transaction for the product, and if so then: determining that the flexible spending account for the payment transaction has sufficient assets for paying the qualified amount of the total purchase amount, and if so, then: sending, in response to the payment network authorization request message, an authorization response from the address of the issuer to the address of the payment network system, wherein the authorization response includes the qualified amount of the total purchase amount eligible for use of the flexible spending account for the payment transaction for the product and an authorization for the use of the flexible spending account payment for the payment transaction; sending the authorization response from the address of the payment network system to the address of the acquirer for the merchant; sending the authorization response from the address of the acquirer for the merchant to the address of the merchant.