Selective escrow using electronic funds transfer

Abstract

A method is employed to impound funds from merchant sales electronically in an escrow account for later use such as payment of associated sales taxes. An electronic funds processor (EFP) determines escrow information for credit / debit card charge payment requests made by the merchant via a credit / debit card terminal, forwards the requests to one or more credit / debit card issuers, extracts an escrow amount from payments made by the issuers to the merchant, and credits an escrow account of the merchant with the extracted amounts. An escrow agent periodically makes payments from the escrow account, and provides associated reporting to the merchant. The merchant is able to report cash sales via the credit / debit card terminal, and associated escrow amounts are extracted from credit / debit card payments or from another merchant account.

Description

CROSS-REFERENCE TO RELATED APPLICATION[0001]The present application is a continuation-in-part of and claims priority under 35 U.S.C. §120 from U.S. patent application Ser. No. 10 / 010,340, which was filed on Dec. 5, 2001 now abandoned, and under 35 U.S.C. §119(e) from U.S. Provisional Patent Application Ser. No. 60 / 445,782, which was filed on Feb. 7, 2003. The disclosures of U.S. patent application Ser. Nos. 10 / 010,340 and 60 / 445,782 are hereby incorporated by reference.FIELD OF THE INVENTION[0002]The present invention relates to a method for impounding escrow funds from debit / credit card payments made to a merchant. More specifically, the present invention relates to a method for impounding escrow funds from debit / credit card payments made to a merchant, where the impounded escrow funds are determined in relation to at least one of credit, debit and cash sales made by the merchant.BACKGROUND OF THE INVENTION[0003]Computers facilitate with high speed and accuracy a vast myriad of com...

AI Technical Summary

Benefits of technology

This patent describes a method for impounding merchants' escrow funds to pay sales or other taxes during a close-out period. The method involves determining the sales amount, including credit card sales, and creating an escrow amount based on the sales amount. If the second sales amount exceeds the escrow amount, the system will credit the escrow account and the merchant's account the difference. This allows the merchant to automatically collect and pay sales taxes without having to handle the funds themselves. Additionally, the method can be used for other purposes such as withholding funds collected from credit card sales, paying back payroll taxes, and creating a merchant savings account.

Problems solved by technology

At the end of each such period, some merchants find that they have spent or otherwise failed to segregate and retain sufficient funds to make the required tax payment to the taxing authority.

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