Scored negative file system and method

Abstract

System and method for validating a payment. The method can include obtaining a first account identifier, accessing a database containing a plurality of risk scores, each one of the plurality of risk scores being associated with one of a plurality of account identifiers, obtaining a first risk score from the plurality of risk scores, the first risk score being associated with the first account identifier, and determining an acceptance decision by comparing the first risk score against a risk threshold value.

Description

BACKGROUND OF THE INVENTION[0001]The present invention relates to validating payments during transactions. In particular, embodiments of the invention relate to validating check payments presented during transactions.[0002]A traditional negative file consists of account holders (i.e., individuals or organizations with checking accounts) that currently have outstanding returned checks at a retailer that is a member of the shared check authorization network (“SCAN”). Whenever an account holders presents a check to a retailer, the retailer determines whether the account holder has any unpaid returned checks by cross-referencing the negative file. Many of the account holders listed in the negative file, however, unintentionally write checks with insufficient funds in their checking accounts. Account holders may have incomplete or inaccurate knowledge concerning the balance in their account or may have forgotten to transfer or deposit money to cover recent checks. Many of the account hol...

AI Technical Summary

Benefits of technology

This system reduces unnecessary declined transactions by accurately assessing the risk of payment validation, allowing valid payments to be accepted while minimizing losses from unfinanced checks, thereby improving sales and customer service.

Problems solved by technology

Many of the account holders listed in the negative file, however, unintentionally write checks with insufficient funds in their checking accounts.

Account holders may have incomplete or inaccurate knowledge concerning the balance in their account or may have forgotten to transfer or deposit money to cover recent checks.

When this type of account holder gets turned down for a transaction because they appear in the negative file, the retailer loses a sale and potentially creates a customer service issue, when, in reality, the retailer may have declined a valid form of payment and may have lost a sale unnecessarily.

Images