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1 SYSTEM AND METHOD FOR REASSOCIATING AN ACCOUNT NUMBER TO ANOTHER TRANSACTION ACCOUNT
Matter enclosed in heavy brackets [ ] appears in the original patent but forms no part of this reissue specification; matter printed in italics indicates the additions made by reissue.
CROSS REFERENCE TO RELATED APPLICATIONS
This application is a Reissue of U.S. application Ser. No. 10/710,484 (filedJul. 14, 2004), now U.S. Pat. No. 6,991,157 (issued Jan. 3], 2006); the ’484 application itselfis a continuation of, and claims priority to, U.S. Ser. No. 10/242,584, filed on Sep. 12, 2002 now U.S. Pat. No. 6,805,287 issued Oct. 19, 2004, and entitled “SYSTEM AND METHOD FOR CONVERTING A STORED VALUE CARD TO A CREDIT CARD,” which is hereby incorporated by reference.
The present invention relates, generally, to a system and method for transferring the association of a transaction card number from a first type of account to a second type of account. In particular, this invention allows a customer to transmit an existing card number, such as that embossed on a stored value card, to a host system, and request that the account number be re-associated and/or redefined from a first transaction account (e.g., stored value account) to a second transaction account (e.g., credit card account).
Stored value cards and credit cards are forms of transaction instruments which provide cash equivalent value that can be used within an existing payment/transaction infrastructure. A difference between the accounts associated with the two types of cards is when the monetary value becomes available for use. Stored value cards are frequently referred to as prepaid or cash cards, in that money is deposited in the account associated with the card before use of the card is allowed. If a customer deposits ten dollars of value into the account associated with the card, the card can be used for payments up to ten dollars. In contrast, credit cards are backed not by cash, but by a line-of-credit that has been issued to the customer by a financial institution. As such, upon use of the credit (or charge) cards, the cash payment from the customer is completed after the purchase from the merchant, namely, when the customer is billed for using the line-of-credit associated with the card.
Another difference between the stored value card and the credit/ charge card is the revenue generated from the use of the cards. With stored value cards, the monetary value is prepaid and the customer is assessed a fee whenever funds are loaded onto the card, wherein the fee is usually either a flat fee or a small percentage of the amount loaded. In contrast, credit cards represent a line-of-credit issued to the owner, so a finance charge and/ or interest is typically assessed on any charged amount that is not paid off at the end of each month (e.g., unpaid balance). The finance charge assessed is usually anywhere from 10-25% of this balance. Therefore, credit cards are often more profitable than stored value cards. However, stored value cards are more easily acquired, so there are more stored value cards issued, funded, and used each day.
Moreover, fewer distribution restrictions are placed upon stored value cards. For example, a stored value card with a five dollar monetary value may be distributed to customers by a number of different methods (e.g., shipping with product, promotional distribution, etc). In contrast, credit or charge cards generally may only be shipped to the customer at the customer’s request. Thus, one of the problems faced within the transaction card industry is how to most effectively distribute credit or charge cards to potential customers while still abiding by the distribution restrictions.
Another problem with credit or charge cards is that it can take several days or even weeks between the time a credit card application is completed and approved to when the customer receives the transaction card. In contrast, customers can purchase stored value cards at many outlets without waiting. Thus, a system or method is needed that enables a credit card applicant to more expeditiously obtain a transaction instrument corresponding to the customer’s credit card account.
The present invention generally relates to a system and method for converting a first transaction account device (e.g., a card associated with a stored value account) to a second transaction account device (e.g., a card associated with a credit card account) by either re-associating or re-defining a card number from a first transaction account (e.g., stored value account) to a second transaction account (e.g., credit account).
An exemplary method of this invention comprises the steps of: establishing a second transaction account, receiving a card number associated with a first transaction account, and then, re-associating said card number to said second transaction account. Another exemplary method of this invention comprises the steps of: establishing a second transaction account, receiving a card number corresponding to a first transaction account, and redefining the first transaction account as said second transaction account, wherein said first transaction account is then closed.
BRIEF DESCRIPTION OF DRAWINGS
The above and other features and advantages of the present invention are hereinafter described in the following detailed description of illustrative embodiments to be read in conjunction with the accompanying drawings and figures, wherein like reference numerals are used to identify the same or similar system parts and/ or method steps in the similar views, and:
FIG. 1 illustrates an overview of system components comprising an exemplary embodiment of the present invention;
FIG. 2 is a schematic illustrating the process of using a stored value account via a proxy account;
FIG. 3 is a schematic illustrating the processes involved in converting the stored value card to a credit card; and
FIG. 4 is a schematic illustrating the process of using a card number as a credit card device after conversion.
Other aspects and features of the present invention will be more fully apparent from the detailed description that follows.
The following descriptions are of exemplary embodiments of the invention, and are not intended to limit the scope, applicability or configuration of the invention in any way.
Rather, the following descriptions are intended to provide convenient illustrations for implementing various embodi
ments of the invention. As Will become apparent, various changes may be made in the function and arrangement of the elements described in these embodiments Without departing from the spirit and scope of the invention.
The present invention overcomes the problems of the prior art by alloWing a single card number originally used as a first transaction account device (e.g., stored value card) to be changed to a second transaction account device (e.g., credit card). In an exemplary embodiment, the number on the card (“card number”), Which is associated With a first transaction account in a host system, is re-associated to a second transaction account in a host system. In another embodiment, the card number, originally corresponding to, or defined as, a first transaction account is redefined Within a ho st database system as a second transaction account. The card number may be, for example, the same as a stored value account or a credit card account. Or, the card number may be the same as a proxy account number, Wherein the proxy account is used as a proxy for one or more accounts. Co-pending U.S. patent application Ser. No. 09/800,461, “System For Facilitating a Transaction”, by Breck, et al., and filed on Mar. 7, 2001, describes various transaction processing systems, including the use of secondary transaction numbers (i.e., proxy accounts), the entire contents of Which is hereby incorporated by reference.
In an exemplary embodiment, the system of the present invention alloWs customers to obtain a credit card device in a substantially real time environment by associating an existing card number to a neW or existing credit card account. In particular, the card number embossed on the customer’s first transaction account device (e.g., stored value card), may be re-associated Within the host system from a first transaction account (e.g., stored value account) to a second transaction account (e.g., a credit or charge card account), Wherein the second transaction account is associated With a line of credit established by the customer.
As used herein, a “transaction” includes any exchange or delivery of value, exchange or delivery of data, gifting of value or data, etc. The term “transaction” not only contemplates an exchange of goods or services for value from one party to another, but also the gifting of anything from one party to another. Additionally, transaction account numbers include account numbers that are used to facilitate any type of transaction. As used herein, “card number” includes any device, code, number, letter, symbol, biometric or other identifier/indicia suitably configured to alloW the customer to interact or communicate With the system, such as, for example, authorization/access code, personal identification number (PIN), Internet code, other identification code, and/or the like Which is optionally located on a reWards card, charge card, credit card, debit card, prepaid card, telephone card, smart card, magnetic stripe card, bar code card, transponder, radio frequency card and/ or the like. Although the term “card number” is used throughout, the number need not physically exist on a “card” per se. In other Words the card number may be a number communicated to the customer, merchant or host by any means. The card number may be distributed and stored in any form of plastic, electronic, magnetic, radio frequency, Wireless, audio and/ or optical device capable of transmitting or doWnloading data from itself to a second device.
As shoWn in FIG. 1, an exemplary embodiment of the present invention includes a host system 10 comprising various systems or sub-systems for processing financial account data. These systems are generally knoWn in the art as systems for processing merchant 50 authorization requests and for facilitating transaction settlements.
The host system 10 includes any hardWare and/or softWare suitably configured for processing merchant authorization
requests and for facilitating transaction settlements. In an exemplary embodiment of this invention shoWn in FIG. 1, host system 10 comprises one or more interface systems 12 configured to facilitate communication With one or more customers 1 and/or one or more merchants 50. The interface system 12 is generally configured to route and communicate customer 1 and/ or merchant 50 data to a card authorization system (CAS) 20 and/or a neW accounts system (NAS) 13. The host system 10 also comprises server systems and databases for transaction accounts. These server systems may include: a first transaction account system, e.g., stored value account server 14 and database 15; a second transaction account system, e.g., credit card account server 18 and database 19; and, if desired, a proxy account system, including, e.g., STN server 16 and database 17. The previously mentioned components may be referred to as “front end processing components” Which facilitate transaction authorizations to complete transactions. As those skilled in the art Will appreciate, any hardWare, softWare and/or systems discussed herein may be included Within one ho st or distributed among many locations or entities.
Backend components of the host system 10 include any hardWare and/or softWare generally configured to facilitate transaction settlement, i.e., payment of merchant 50 and invoicing of customer 1. These components generally include, for example, a financial capture system (FINCAP) 22 for capturing the merchant’s 50 receipt and summary of charges, an accounts receivable system 24 for adjusting the account and billing customer, and an accounts payable system 26 for paying the merchant 50. These backend components may be configured to communicate With one or more front end components, e.g. NAS 13, CAS 20, etc. In an exemplary financial infrastructure, the accounts receivable system 24 may replace or perform the same function as the credit card system 18.
As shoWn in FIG. 1, in an exemplary stored value card system employing a proxy account number, a card number 6 (1234567891234567) embossed on a stored value card 5 is associated With a stored value account (0000000000000000) in a proxy system comprising a STN server 16 and database 17. When the customer’s card 5 is used for a purchase, the stored value account is accessed and debited. After conversion, the card number 6 (1234567891234567) is then associated Within the proxy system With the credit account (9999999999999999), such that When the customer’s card 5 is used, the credit account is charged and the customer is later invoiced for the charges.
It should be appreciated that the particular implementations shoWn and described herein are illustrative of the invention and its best mode and are not intended to otherWise limit the scope of the present invention in any Way. Indeed, for the sake of brevity, conventional data net-Working, application development and other functional aspects of the systems (and components of the individual operating components of the systems) may not be described in detail herein. Furthermore, the connecting lines shoWn in the various figures contained herein are intended to represent exemplary functional relationships and/or physical couplings betWeen the various elements. It should be noted that many alternative or additional functional relationships or physical connections may be present in a practical electronic transaction system.
The components of the present invention are described herein in terms of functional block components, floW charts and various processing steps. As such, it should be appreciated that such functional blocks may be realized by any number of hardWare and/or softWare components configured to perform the specified functions. For example, the present