1. Field of the Invention
This invention relates to automated banking systems and means. In particular, the invention relates to a Customer Initiated Entry system, in which the Bill Payer periodically completes, on a sheet of paper, information in machine-readable form regarding Bills required to be paid and transfers that form to the Payer's Bank. The sheet of paper is optically scanned, the relevant payment information read, and the transaction for transfer of data is then automatically handled by a suitable clearinghouse with prompt transfer of funds to the Biller.
2. Glossary of Terms
As used herein, the following terms shall have the designated meanings.
"Application" means a Biller's computer program, which records accounts receivable and payments for its Bill Payers.
"Automated Clearing House" or "ACH" means a substantially paperless automatic settlement mechanism by which one bank can transfer funds quickly and electronically to another bank through one or more electronic clearinghouses. There are many such clearinghouses; they may be quasi-public (created by a group of banks) or private.
"Bill" means "Remittance Advice" or "Bill", as defined below.
"Bill Payer" means an individual, organization or business paying a Bill to a Biller.
"Biller" means a creditor, which sends periodic Bills to its customers or debtors for payment. A Biller may be a mortgage company, credit card company, public utility or department store chain, by way of example.
"Collection Float" means the time for funds, once credited to a Biller's account, to be verified for availability from the Payer's Bank.
"Customer Initiated Entry" or "CIE" means an automated or semi-automated system in which a Bill Payer may use a rotary telephone (voice input), a touch-tone telephone (voice or key input) or a computer (key input) to communicate to the payer's bank by voice (in the two former events) or keystroke (in the two latter events) to create instructions to make a payment to a Biller.
"Customer Payment Instruction" or "CPI" means a document which is preprinted with Bill Payer identification and a list of Pre-Registered Billers and includes an area for the machine readable, manual designation or insertion of (1) a sum of money for each such Biller, and (2) optionally, a Designated Date.
"Designated Date" means a date designated by a Bill Payer for payment of a bill to a Biller. It may be date specific, e.g., the 15th of each month, or date non-specific, e.g., immediately. For example, a Biller may designate the first of the month as a due date, but will accept payment, without penalty, up to the tenth of the month. The Bill Payer will then prefer to specify the tenth of the month as the Designated Date.
"Electronic Remittance" means electronic transfer of information to effect payment of a Bill by a Bill Payer to a Biller with an associated credit transaction to reflect the payment for the Bill Payer's account with the Biller.
"Electronic Remittance Instruction" means an Electronic Remittance including the following information:
1. The Bill Payer's account number with the Biller;
2. Other nominal data required for the Biller to process a Remittance, such as a transaction number;
3. The amount of the Remittance; and
4. Any applicable data conventions, to permit the data to be recognized and processed. The data conventions (or protocols) are standard, commonly accepted definitions, which may be found, for example, in the Operating Guidelines of the Mid-Atlantic Clearing House Association and The National Automated Clearing House Association.
"Lockbox" means a system of Bill collection in which a Biller designates a bank or other institution as its agent and addressee for receiving payments from Bill Payers and for immediately depositing them, upon receipt, into the Biller3 s account and to collect these funds from the Payer's Bank, and processing the Remittance Advice for the transaction. In some instances, the Biller may act as its own Lockbox agency.
"Mail Float" means the time for a Bill Payer's check, when mailed, to be delivered to the Biller's Lockbox bank.
"Payer's Bank" means a bank where a Bill Payer has an account.
"Preauthorized Payment" means a system whereby a Bill Payer gives the Biller written authorization and instructions to allow the Biller, through its bank, to routinely (usually monthly) automatically deduct predetermined sums from a Bill Payer's account for the credit of the Biller through ACH.
"Pre-Register" means provide a Payer's Bank with the following minimum information for a Biller, as to a Bill Payer:
a. Bank routing number (Biller's bank, Federal Reserve district and account number); PA1 b. Biller's account number at the Biller's bank; PA1 c. Bill Payer's account number; PA1 d. Bill payment period (e.g., month, calendar quarter, etc.); PA1 e. Bill payment due date (e.g., the tenth of each month); PA1 f. Other nominal remittance processing data required for the Biller to process the remittance (for example, transaction number); and PA1 g. Applicable data conventions (the protocols that are required to construct the applicable processing record). PA1 (a) Read the headers. PA1 (b) Read in the Remittance amount from a scan line on the Remittance Advice which has OCR or MICR characters. PA1 (c) Read in the applicable check (which has MICR characters). PA1 (d) Record on each Remittance Advice and check in the batch, a sequential number. PA1 (e) Take an image of the check and Remittance Advice and place them in storage of a computer in sequential order. PA1 a. The items may or may not be processable, depending on the payment acceptance parameters of the Biller in the payment processing software of the Lockbox operator. PA1 b. If the item is deemed to be unprocessable, the data base is so marked for the particular Remittance Advice and check. PA1 c. If the item is deemed to be processable, then the data base is so marked for the particular Remittance Advice and check. PA1 a. The checks for the particular batch are input into a computer-controlled MICR encoder. PA1 b. From the amounts keyed and accepted, the checks are MICR-encoded. PA1 c. The encoded checks are then processed through the normal check clearing (batch) processes in place for the bank. PA1 d. An interface file and reports are created for the Biller's use (from scan/MICR information on the Remittance Advice) in the Biller's accounts receivable collection system/application.
"Remittance" means the act of sending money in payment of an obligation or the money so sent or transmitted.
"Remittance Advice" or "Bill" is the portion of a biller's bill or statement for a bill payer that is to be returned by the biller. It identifies the biller, the bill payer's account number, the due date and amount due, and usually includes a space for the bill payer to insert the amount of the enclosed payment.
3. Prior Art
Automated Clearing Houses are well-known and well-established in the banking field. Although these have been moderately successful, they have not captured the bulk of the Bill Payer check processing business, which is still handled inefficiently using Lockbox systems.
Some Customer Initiated Entry services are currently available, using telephones or computer data entry as means for achieving semi-automated bill payment by the Bill Payer. These have received limited acceptance.
Thus, the prior art includes systems whereby a Payer's Bank may automatically effect fund transfers as a debit to a Bill Payer's account and a credit to a Biller of that bank customer at a remote bank. However, these systems have limited appeal and have not yet obtained widespread acceptance and use.
For Bill payments which are regular and fixed (such as a monthly mortgage or car loan payment), it is possible to provide the Payer's Bank with Preauthorized Payment instructions, so that, on a given date, the Payer's Bank will automatically debit the Bill Payer's account with a pre-determined amount. This amount can then be transferred and credited to the Biller's account automatically, in accordance with the predetermined approval and instructions.
U.S. Pat. Nos. 4,927,071 to Wood; 3,576,972 to Wood; 4,128,202 to Buros; and 3,531,628 to White, Jr. show document carriers for checks having transparent windows.