Patent Issued for Smartphone application for securing purchase transactions between a customer and a merchant with self-checkout (USPTO 11392920): United Services Automobile Association

2022 AUG 08 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- A patent by the inventors Calusinski, Jeff (San Antonio, TX, US), Durairaj, Ravi (San Antonio, TX, US), Jones, Jr., David M. (San Antonio, TX, US), Lyle, Ruthie D. (Durham, NC, US), McEachron, Jon (Boerne, TX, US), Nagarajan, Vidya (Frisco, TX, US), Phillips, Sharonda (Flower Mound, TX, US), Ricks, Brennen (San Antonio, TX, US), filed on March 29, 2019, was published online on July 19, 2022, according to news reporting originating from Alexandria, Virginia, by NewsRx correspondents.

Patent number 11392920 is assigned to United Services Automobile Association (San Antonio, Texas, United States).

The following quote was obtained by the news editors from the background information supplied by the inventors: “Modern banking and shopping practices commonly rely on any of several types of well-known payment processing networks. A payment processing network may generally be any system that handles transactions from various channels, such as credit cards and debit cards, that enable a customer to pay a merchant for goods or services. That is, they transfer money (directly or indirectly) from a customer’s bank to the merchant’s bank in the amount of a purchase. Payment processing networks may often be run by a third party payment processor, such as the major credit card companies Visa, MasterCard, American Express, and Discover. However, other payment processing networks may operate without a private third party company being involved as an intermediary.

“In particular, the credit card payment processing networks are some of the most widely known and used of all payment processing networks in the world. Credit cards offer several well-known advantages when used by merchants and customers for payment. For example, from the merchant’s perspective, credit cards generally are very good at instantly verifying the availability of a customer’s funds/credit limit. This allows merchants to accept non-cash payment from a wide variety of customers, without having to establish a relationship with each individual customer, without fear of the customer reneging on payment.

“For example, FIG. 1A shows a prior art diagram of how a credit card payment network generally operates. Generally, a customer 102 engages in a purchase transaction with a merchant 104 using a credit card 106 that interfaces with a merchant’s credit card reader 108 at step 151. Merchant 104 then interfaces with a third party credit card payment processor 114 at step 153, relaying information about the purchase in order to ensure that the customer is properly authorized. Third party credit card payment processor 114 then interfaces with bank 110 that issued the customer’s 102 credit card 106 at step 115, checking with bank 110 that the customer 102 has sufficient funds or credit to complete the purchase transaction. Customer’s bank 110 then responds to the third party payment processor 114 with its answer, authorizing or declining the transaction, at step 157. The third party payment processor 114 then relays this authorization/decline back to merchant 104 at step 159. Merchant 104 then allows customer 102 to complete the purchase at step 161, As is widely known, steps 151, 153, 155, 157, 159 and 161 can occur very quickly, in as little as seconds. This is one of the advantages of a the credit card payment network.

“However, as is also shown in FIG. 1A, credit card payment network also includes transferring the funds used in the purchase transaction-and this includes various fees, Namely, customer’s bank 110 engages in settlement 163 with the third party credit card payment processor 114-minus an interchange fee. The interchange fee is commonly between 2% and 3% of the purchase transaction price plus a flat fee per transaction of around $0.15. Third party credit card payment processor 114 then settles with the merchant’s bank 112 at step 165. The merchant’s bank 114 then settles with the merchant’s account therein at step 167, while also charging fees.

“Accordingly, when a credit card transaction takes place the issuing bank 110 (customer’s 102 bank) pays the acquiring bank 112 (merchant’s 104 bank) for their cardholder’s purchase less the interchange fee for the transaction. The acquiring bank 112 then pays their merchant from the remaining balance minus a markup for processing the transaction. Merchant 104 ultimately receives the gross amount of the sale minus a series of base costs and markups that include interchange, dues, assessments and the processor’s markup.

“These fees are the price that merchant 104 pays for the convenience of accepting payment through the credit card payment processor network. On the one hand, this allows merchants to serve more customers while having a reasonable level of trust that they will receive payment. On the other hand, these fees eat into the merchant’s profit margins. For some merchants, the buying behavior of customers 102 make the need for accepting credit card payments unavoidable. For example, credit card transactions are most commonly used to purchase goods when the purchase price and timing of the purchase transaction are unknown in advance.

“However, in other scenarios, a different type of payment network such as is shown in FIG. 1B may be more appropriate for all parties involved, FIG. 1b shows a payment network that debits from a customer’s 102 checking account 116 at customer’s bank 110, In this type of transaction, customer 102 usually receives a bill for some goods or services from merchant 104 at step 173. The customer 102 then shares their checking account information 116 with merchant 104 at step 175. Merchant 104 then relays the customer’s checking account information 116 to the merchant’s bank 112. The merchant’s bank 112 then “pulls” the funds from the customer’s bank 110 by transmitting a request at step 179, The customer’s bank 110 then transfers the funds electronically to the merchant’s bank 112 at step 181.

“This type of transaction commonly uses the Automated Clearing House (“ACH”) payment network, that allows banks to move funds between checking accounts with no (or, extremely low) fees. The ACH network in the United States is organized by the National Automated Clearing House Association (“NACHA”), however NACHA does not act as a third party payment processor. The funds are moved through the governmental organization the Federal Reserve or the Electronic Payments Network that is owned by some 20 major banks.

“One drawback to ACH based transfers is that permission must be granted for the money to move, on a merchant-by-merchant basis, Usually, a consumer 102 gives a merchant 104 permission to “pull” money from the consumer’s checking account at bank 110, to pay a bill on a reoccurring monthly basis. For example, a consumer 102 will give their cellphone provider 104 permission to debit the consumer’s checking account each month to pay for the monthly cellphone charges on an automated payment plan-and the same with utilities like electric service or water service. This requirement for merchant-by-merchant permission may not be overly cumbersome when consumer 102 does reoccurring business with the merchant, in amounts that are reasonably predictable. However, for irregular transactions at unpredictable times, this type of payment network may be less than ideal for the merchant because it does not allow the merchant to verify the funds before a purchase transaction occurs.

“Thus, existing payment processing networks do not currently offer a way for merchants to be assured of receiving electronic payments from a customer in a manner that is simultaneously secure, verified, and low in fees.

“Furthermore, customers also suffer several disadvantages of existing payment processing networks. Namely, customers must carry a credit card with them at all times in order to be ready to conduct a purchase transaction. While this may be an improvement over carry large amounts of cash, this nonetheless may present an inconvenience to the customer. Alternatively, customers must be willing to share their checking account information with a merchant. Customers may find this acceptable with some merchants, such as their cell phone company with whom they have a long-standing business relationship-but may not be willing to share such sensitive information with all merchants.

“Many customers use their smartphone mobile computing devices to interact with their financial institution. Most banks have a secure “app” that enables the banking customer to log into their customer profile, and view and interact with all their accounts at that bank. Many people in this day and age are never without their smartphone, bringing their smartphone with them at all times-including when shopping. There are many smartphone apps that help customers when shopping, including merchant specific apps that allow a user to engage only with one particular merchant, or payment apps like PayPal or Apple Pay that facilitate payments across a private third party payment processor. One popular type of merchant-specific app is a “scan-n-go” application that enables a user to scan products to be purchased from a particular merchant, and check out without needing to interact with a cashier. Popular scan-n-go apps are offered by stores such as H-E-B, Sam’s Club, and Amazon Go.

“However, existing scan-n-go applications are generally limited to only one merchant. The user must therefore download several different apps in order to interact with multiple merchants in this manner. Furthermore, existing scan-n-go applications merely use existing payment processing networks-with all the of drawbacks as discussed above.

“Accordingly, there is a need in the art for systems, devices, and methods that addresses the shortcomings of the prior art discussed above.”

In addition to the background information obtained for this patent, NewsRx journalists also obtained the inventors’ summary information for this patent: “In one aspect, the disclosure provides a mobile computing device configured to: (1) allow a user to log into a user portal associated with a first financial institution; (2) receive an input from the user to commence a purchase transaction between the user and a merchant; (3) access account balance information regarding funds available in a cash-equivalent account associated with the user, at the first financial institution; (4) receive a product input for each product being purchased by the user; (5) access a product database associated with the merchant, the product database including prices of products sold by the merchant; (6) compare the product input to the product database and compute a purchase transaction price; (7) compare the purchase transaction price with the funds available in the user’s cash-equivalent account; (8) receive an input from the user that the purchase transaction is ready to be checked-out; (9) recall information from the first financial institution describing a pre-established transfer association, between the first financial institution and a second financial institution associated with the merchant, from a merchant transfer association database; (10) cause the first financial institution to initiate a transfer of funds from an initiating cash-equivalent account at the first financial institution directly to a receiving cash-equivalent account at the second financial institution, in accordance with the pre-established transfer association; and (11) generate and display a message that the purchase transaction is successfully completed, the message being configured such that it enables the merchant to verify completion of the purchase transaction.

“In a second aspect, this disclosure provides a mobile computing device configured to: (1) allow a user to log into a user portal associated with a first financial institution; (2) receive an input from the user to commence a purchase transaction between the user and a merchant; (3) access account balance information regarding funds available in a cash-equivalent account associated with the user, at the first financial institution; (4) receive a product input for each product being purchased by the user, by scanning a machine readable code using a camera in the mobile computing device; (5) access a product database containing product information, the product database being associated with two or more different merchants, and receive product information associated with the merchant with whom the purchase transaction was commenced by receiving an input that includes scanning a machine readable code generated by the merchant, using a camera in the mobile computing device; (6) compare the product input to the product information and compute a purchase transaction price; (7) compare the purchase transaction price with the funds available in the user’s cash-equivalent account; (8) receive an input from the user that the purchase transaction is ready to be checked-out; (9) recall information from the first financial institution describing a pre-established transfer association, between the first financial institution and a second financial institution associated with the merchant, from a merchant transfer association database; the merchant transfer association database including information describing two or more pre-established transfer associations, each of the two or more pre-established transfer associations being associated with a different merchant; (10) cause the first financial institution to initiate a transfer of funds from an initiating cash-equivalent account at the first financial institution directly to a receiving cash-equivalent account at the second financial institution, in accordance with the pre-established transfer association; and (11) generate and display on the mobile computing device a machine readable message that the purchase transaction is successfully completed.

“Finally, in another aspect, this disclosure provides a mobile computing device configured to: (1) allow a user to log into a user portal associated with a first financial institution; (2) receive an input from the user to commence a purchase transaction between the user and a merchant; (3) access account balance information regarding funds available in a cash-equivalent account associated with the user, at the first financial institution; (4) receive a product input for each product being purchased by the user; (5) access a product database associated with the merchant, the product database including prices of products sold by the merchant; (6) compare the product input to the product database and compute a purchase transaction price; (7) compare the purchase transaction price with the funds available in the user’s cash-equivalent account; (8) receive an input from the user that the purchase transaction is ready to be checked-out; (9) recall information from the first financial institution describing a pre-established transfer association, consisting essentially of an account number and routing number for a receiving cash-equivalent account associated with the merchant at a second financial institution, from a merchant transfer association database; (10) cause the first financial institution to initiate a transfer of funds from the user’s cash-equivalent account at the first financial institution directly to the receiving cash-equivalent account at the second financial institution, in accordance with the pre-established transfer association, via the Federal Reserve Automated Clearing House network; (11) generate and display a message that the purchase transaction is successfully completed, the message being configured such that it enables the merchant to verify completion of the purchase transaction; (12) generate and send a message to the user after the purchase transaction is completed regarding available funds in the user’s cash-equivalent account; and (13) generate and send instructions to the first financial institution causing the first financial institution to place a temporary hold on an amount of funds in the users cash-equivalent account equal to the purchase transaction price, the temporary hold expiring when the funds are transferred to the second financial institution.

“Other systems, methods, features, and advantages of the invention will be, or will become, apparent to one of ordinary skill in the art upon examination of the following figures and detailed description. It is intended that all such additional systems, methods, features and advantages be included within this description and this summary, be within the scope of the invention, and be protected by the following claims.”

The claims supplied by the inventors are:

“1. A mobile computing device configured to: allow a user to log into a user portal associated with a first financial institution; receive an input from the user to commence a purchase transaction between the user and a merchant; access account balance information regarding funds available in a cash-equivalent account associated with the user, the cash-equivalent account associated with the user being at the first financial institution; receive a product input for each product being purchased by the user, by scanning a machine readable code using a camera in the mobile computing device; access a product database containing product information, the product database being associated with two or more different merchants, and receive product information associated with the merchant with whom the purchase transaction was commenced by receiving an input that includes scanning a machine readable code generated by the merchant, using a camera in the mobile computing device; compare the product input to the product information and compute a purchase transaction price; compare the purchase transaction price with the funds available in the cash-equivalent account associated with the user at the first financial institution; receive an input from the user that the purchase transaction is ready to be checked-out; send a purchase transaction initiation directly to the first financial institution, in response to the input from the user that the purchase transaction is ready to be checked-out; recall information, in response to the input from the user that the purchase transaction is ready to be checked-out, from a merchant transfer association database integrated with the first financial institution describing a pre-established transfer association between the first financial institution and a second financial institution associated with the merchant; the merchant transfer association database including information describing two or more pre-established transfer associations, each of the two or more pre-established transfer associations being associated with a different merchant having a different respective second financial institution; wherein the first financial institution initiates, responsive to the mobile computing device, a transfer of funds from the cash-equivalent account associated with the user at the first financial institution directly to a receiving cash-equivalent account associated with the merchant at the second financial institution, in accordance with the pre-established transfer association; wherein each of the two or more pre-established transfer associations includes a routing number and account number of the receiving cash-equivalent account at the respective second financial institution, such that the pre-established transfer association enables an electronic transfer of funds via an Automated Clearing House network, wherein the transfer of funds from the cash-equivalent account associated with the user at the first financial institution directly to the receiving cash-equivalent account associated with the merchant at the second financial institution occurs via the Automated Clearing House network; receive a message from the first financial institution that the purchase transaction is successfully completed; and display a message that the purchase transaction is successfully completed, the message including a machine readable code comprises a QR code or a UPC code scannable by a machine operated by the merchant for verifying completion of the purchase transaction.

“2. The mobile computing device of claim 1, wherein: the pre-established transfer association includes an account number and routing number for the merchant’s receiving cash-equivalent account at the second financial institution.

“3. The mobile computing device of claim 1, wherein the mobile computing device is further configured to: send to the first financial institution a record of the purchase transaction, to be stored in a user purchase history database; receive from the first financial institution an incentive, based on information associated with the user in the user purchase history database, that allows the user to receive a benefit during a future purchase transaction with the merchant.

“4. The mobile computing device of claim 1, wherein the mobile computing device is further configured to: receive an input from the user specifying one or more budgeting categories and a valuation for each budgeting category, the budgeting categories being classifications of the user’s spending; and classify each product being purchased by the user into the one or more budget categories as each product input is received by the mobile computing device; compare a price of each product being purchased by the user to the valuation for each budgeting category and any prior spending in each budgeting category, to determine by what amount the total spent in each budgeting category would change upon completion of the purchase transaction; generate and display a message to the user indicating by what amount the total spent in each budgeting category would change upon completion of the purchase transaction, prior to receiving an input from the user that the purchase transaction is ready to be checked-out.

“5. The mobile computing device of claim 1, wherein each of the two or more pre-established transfer associations including data was transferred by each respective second financial institution from the second financial institution to the first financial institution, and stored by the first financial institution, upon request by the merchant prior to the first financial institution receiving the input from the user that the purchase transaction is ready to be checked-out.

“6. The mobile computing device of claim 1, wherein the mobile computing device is further configured to: compute and re-compute a running total price after receiving each of two or more product inputs; compare the running total price to the funds available in the user’s cash-equivalent account after receiving each product input; and generate and display a message to the user when the running total price accords with one or more criteria predefined by the user alerting the user to the criteria being triggered.

“7. The mobile computing device of claim 1, wherein the mobile computing device is further configured to: generate and send a message to the user after the purchase transaction is completed regarding available funds in the cash-equivalent account associated with the user; and generate and send instructions to the first financial institution to place a temporary hold on an amount of funds in the cash-equivalent account associated with the user equal to the purchase transaction price, the temporary hold expiring when the funds are transferred to the second financial institution.

“8. The mobile computing device of claim 1, wherein the mobile computing device is further configured to include one or more user security and verification to ensure that the user is authorized to access the cash-equivalent account at the first financial institution.”

URL and more information on this patent, see: Calusinski, Jeff. Smartphone application for securing purchase transactions between a customer and a merchant with self-checkout. U.S. Patent Number 11392920, filed March 29, 2019, and published online on July 19, 2022. Patent URL: http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=11392920.PN.&OS=PN/11392920RS=PN/11392920

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