News Column

Patent Issued for Merchant Performance Rating for Payments on Account

March 5, 2014

By a News Reporter-Staff News Editor at Journal of Engineering -- From Alexandria, Virginia, VerticalNews journalists report that a patent by the inventor Kardokas, Laima (Emerald Hills, CA), filed on April 11, 2008, was published online on February 18, 2014.

The patent's assignee for patent number 8655777 is Visa U.S.A. Inc. (San Francisco, CA).

News editors obtained the following quote from the background information supplied by the inventors: "Businesses often use checks and cash to pay suppliers, also known as merchants. These businesses do not have a low cost, easy way of comparing their financial performance of using a commercial card, such as a credit or debit card, to pay a merchant versus using cash or check to pay the merchant. Stated otherwise, these card holding businesses do not have a way of comparing the savings that they could realize from paying with a credit card or a corporate card as compared to suppliers dealing in goods and services of like categories.

"It is desirable for a business to have a way of valuating the financial benefits of paying with a credit or debit card as opposed to paying with cash or checks. For instance, by eliminating a purchase order, an invoice and a check payment to a merchant, there is a concomitant reduction in processing activities and costs for paying bills to the merchant. A business that pays by corporate card, such by a credit card or debit card, can streamline its operations and reduce their soft and hard dollar expenses, as well as potentially increasing rebates paid back to the business from the issuer of the corporate card.

"A company that can use a corporate card to pay its bills from merchants, as well as the bank that issues the company its corporate card, needs a way of deciding what is the best and most cost efficient way to design and implement a plan to change from paying its merchants with cash or checks to pay those merchants by credit cards or debit cards (i.e., corporate card).

"A business needs a way of identifying which of the merchants that the company buys from will accept credit and debit cards as payment for the supplies that they sell to the business. Once these merchants are so identified, they can be ranked from highest to lowest in terms of what priority and what benefit might be realized by the business paying the merchant with a corporate card, such as a credit or debit card.

"By rating each supplier according to the priority by which they should be paid by a debit or credit card, a company can streamline the processes that they pay those suppliers most efficiently, as well as identify opportunities to increase working capital that can be used to pay the suppliers, as well as identifying which of the business's suppliers are most appropriate for being paid by debit or credit card.

"It would be an advantage in the art to provide analytical tools and services that will help businesses, as well as the banks that issue credit and debit accounts to those businesses, to improve and expand their programs for using debit and credit cards.

"It would also be an advantage to the art to provide a tool by which a business could predict which of their suppliers would be most likely to accept debit and credit card payments.

"It would further be an advance in the art to determine the savings that might be realized, and the return on investment that might be realized, by changing a business's policy of paying with cash and checks to a policy of paying certain of its suppliers with debit and credit cards."

As a supplement to the background information on this patent, VerticalNews correspondents also obtained the inventor's summary information for this patent: "One implementation a business derives its cost to pay accounts payable (A/P) with a corporate card versus other payment methods. The business identifies each merchant to whom the business owes A/P who but does not accept the corporate card. A weighting factor is derived for each such merchant from costs of paying with and without the corporate card, as well as from its history of past payments to the merchant. The benefit to the business is derived, using the corresponding weighting factor, for each such merchant in paying the corresponding A/P to the merchant with the corporate card. Where the benefit exceeds a predetermined threshold, information is sent to each such merchant sufficient for the merchant to receive payment of the corresponding A/P with the corporate card.

"In another implementation, for each merchant to whom a business account holder (A/H) owes accounts payable (A/P), where the A/H had not previously paid the merchant by an account of a corporate card (CC) issued to the A/H by an issuer, and where the merchant does not accept payments by the CC on the account, and for which the benefit to the A/H to pay the merchant the A/P by the CC on the account exceeds a predetermined threshold, a list is formed of each such merchant as an entry on a report of non-acceptors of payment by the CC on the account. A report is rendered on a user interface (UI) having input fields for each merchant to allow input to be received from a user. Data input is received in the input fields for one or more selected merchants on the report, where the received data for each selected merchant includes an incentive to the merchant to accept a payment from the A/H on by the CC on the account. A transmission is formed and includes data for delivery to each merchant having corresponding input from UI. This data includes a request to the merchant to accept a payment from the A/H on by the CC on the account and to accept the corresponding selected incentive for doing so. In response to the request from the A/H there is received an agreement for the merchant to accept the request. That agreeing merchant is authenticated for eligibility for to accept payment by the CC on the account and for receiving the selected incentive. In response to a positive authentication of the merchant's eligibility, information is transmitted for delivery to the authenticated merchant sufficient for the A/H to pay the A/P to the M by the CC on the account."

For additional information on this patent, see: Kardokas, Laima. Merchant Performance Rating for Payments on Account. U.S. Patent Number 8655777, filed April 11, 2008, and published online on February 18, 2014. Patent URL:

Keywords for this news article include: Visa U.S.A. Inc.

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Source: Journal of Engineering

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