Mutual fund card method and system

Abstract

A computerized method and system for implementing such method, the method comprising establishing a card payment instrument account for an approved customer and an investment account for the benefit of the approved customer. A rebate is calculated periodically based on credit card usage and the rebate is applied to fund the investment account periodically. The rebate is the only flnding of the investment account accomplished through the card payment instrument account.

Description

FIELD OF THE INVENTION [0001] The present invention relates generally to a method and system for a card payment instrument that is associated with an investment account. A holder of the card payment instrument can receive rebates based on the usage of the card. The rebates are transferred periodically to an investment account that is established for the benefit of the cardholder. BACKGROUND OF THE INVENTION [0002] It is increasingly common that consumers pay for many of their products and services using credit cards, charge cards, debit cards, bankcards, stored value cards and like card payment instruments rather than using cash or checks. Consumers do this because they find it more convenient than sending or using cash or checks. Also, consumers are not constrained by cash at hand. For instance, credit cards present unique advantages insofar as they provide a revolving line of credit that can be accessed when personal finds are low. Consumers are inclined to use credit cards versus...

AI Technical Summary

Benefits of technology

[0008] The present invention overcomes one or more of the aforementioned limitations of existing card payment systems and methods. Accordingly, the present invention is directed to a system and method for a card payment instrument with a rebate based on the usage of the card payment instrument. The rebate can only be applied for funding an investment account established for the benefit of the cardholder. Thus, the present invention encourages increased usage of the card payment instrument and the establishment of new investment accounts.

[0009] It is an object of the invention to provide a card payment instrument whereby a predetermined percentage of consumer card payment instrument spending is rebated so as to encourage customer use of the card payment instrument and increase loyalty to the card payment instrument issuer.

[0010] It is another object of the invention to provide an automatic method for establishing an investment account which relieves the consumer of the burden of having to proactively establish an investment account, and promotes new account openings for the investment account provider.

[0011] It is yet another object of the invention to provide a card payment instrument where the card payment instrument issuer and the investment account provider can share the cost of the rebate program so that a significant rebate can be provided without imposing excessive costs on the card payment instrument issuer.

[0014] This method and system which is also referred to hereinafter as the mutual fund card (“MFC”) is advantageous in a number of respects. First it encourages the creation of new investment accounts and maintenance of existing credit card accounts. Second, it provides investment account companies such as brokerage companies an entry into the credit card economy. It is beneficial to associated investment account providers such as mutual fund issuers who seek expanded opportunities to create a loyalty and retention platform for new or existing customers. Moreover, the funding of the investment account with the purchase rebates serves as a powerful incentive to customers to stay loyal to the credit card issuer, increase the usage of their credit cards and open new investment accounts or maintain existing ones with associated financial institutions. Thus, the MFC system and method opens the door for unique partnership relationships between independent business entities, not otherwise readily established between financial institutions such as for example banks and brokerage companies.

Problems solved by technology

However, despite the wide use of credit cards in the modem economy, there is still a need to increase their use especially in non-traditional credit card transactions and financial services.

However, such credit card rebate systems provide no particular long-term benefits to the cardholder or the card issuer—especially benefits that relate to the card issuers business.

There is limited loyalty-building to encourage cardholders to maintain their existing accounts or open new ones.

Moreover, because the rebate is sent directly to the consumer, who can spend it as he / she pleases, there is no mechanism to encourage the consumer to consider other financial products offered by the card issuer or associated financial companies.

Nor is there a way to channel funds back to the card issuer to expand business and cross-sell.

This is a lost opportunity and significant disadvantage.

Such credit card systems, however, are not favored by cardholders because they require forced investments on a periodic basis.

In addition, many brokerages and securities firms do not offer card acceptance for investment purchases.

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