US20090265274A1 - Automated Transaction Processing System and Approach with Currency Conversion - Google Patents

Abstract

Transaction management for contract and contract-related approaches is facilitated. According to an example embodiment of the present invention, a transaction management system automatically sets contract terms including currency conversion terms for a transaction based on business rules previously established between parties to a transaction. In one implementation, the transaction management node automatically derives a contract term including a pricing-related term for a transaction between a buyer and seller using contract information therefor. The pricing-related term is used to set a price for the transaction, and a currency conversion term is used to convert the set price (or a portion of the set price corresponding to a particular transaction party) into a different currency.

Description

RELATED PATENT DOCUMENTS
• This patent document is a continuation of U.S. patent application Ser. No. 11/104,394 and filed on Apr. 12, 2005, to which benefit is claimed under 35 U.S.C. §120.
FIELD OF THE INVENTION
• The present invention is directed to communications and data processing and, more specifically, to communications and data processing involving the processing of transactions involving two or more currencies.
BACKGROUND
• Operational management of contractual and transactional interactions between buyers, sellers and others involved in the exchange of products for purposes of commerce have typically been labor and time intensive. Generally, the processes of managing transactions between business entities have been unduly burdensome and inefficient. The various parties involved in a transaction typically change proposed terms and aspects of a proposed transaction on a concurrent and/or iterative basis. In addition, transaction aspects involving currency conversion rates and other externally-influenced terms often fluctuate over time, relative to events for a particular transaction. For example, from the time an order is received to the time of performance of the order, currency exchange rates often change.
• Often, data representing each corporate participant's view of the interaction is stored across one or more enterprise systems managed by that particular corporate participant and not accessible by other corporate participants. Consequently, it can be difficult to know which draft document represents the most current information about the interaction and whether the parties to the transaction have a common understanding. Where the corporate participants have communicated electronically (e.g. via email and Internet-enhanced communications), these document-synchronization difficulties have been compounded by an increased number of co-existing draft documents being viewed by the parties. Commercial transactions then become more difficult as business entities attempt to perform transactions with each other, and in particular, to perform payment related transactions involving currency conversion.
• A typical commercial interaction between a seller offering a product and a buyer desiring to acquire that product moves through multiple steps. First, the buyer and the seller negotiate an agreement as to the price the buyer will pay. When this agreement covers an extended period of time it is typically formalized in a contract or catalog. Contracts and catalogs are typically maintained by the seller in a seller-managed computer system that is separate from the computer system or systems which the seller uses to accept orders, fulfill orders and generate invoices. When the invoice system used by the seller to bill the buyer has a different price file than is resident in the seller-managed contract system, pricing exceptions will occur which will increase the cost of the interaction because buyer and seller personnel will have to resolve the differences before a transaction can be completed. The problem can be compounded when the buyer loads the current contract prices into its procurement system for determination of whether the seller is billing correctly during the pre-payment order/invoice reconciliation process, and even further compounded when the prices are dependent upon currency conversion rates. All of the seller's invoicing systems could be representing the current contract while one or more of the buyer's systems still represent an expired or not yet active contract. Some or all of the seller's invoicing systems could be representing expired or not yet active contracts while all of the buyer's procurement systems are up to date.
• Where different currencies are involved for a particular transaction, a currency conversion is typically made to convert into a currency desired by a buyer, seller or other party to the transaction. However, because currency conversion rates vary greatly over time, it is often difficult to determine not only when the conversion is to take place, but at what rate and at what cost to which transaction party. In addition, different conversion rates are available from different sources. Furthermore, where pricing-related issues such as those discussed above occur, the payment issues are further compounded with currency conversion requirements associated with the pricing.
• The number of combinations of events leading to transaction misunderstandings and disagreements contributes significantly to the overall cost of settling for the exchange of goods and/or services that are the subject of a transaction. As a further complication, the contract contents, the order, the invoice and other documents representing the transaction and required to settle the transaction often only exist in paper form for access to the individuals attempting to resolve exceptions. Further, the data that does exist electronically is often scattered across numerous applications such as accounts payable, accounts receivable, purchasing, accounting, buyer or seller group, shipping, and receiving. Moreover, where each buyer transacts with many sellers and each seller transacts with many buyers, tracking such drafts becomes increasingly more difficult.
• One type of transaction for which the above difficulties apply is a shipping transaction. Traditional approaches have lead to many challenges to managing transactions between one shipper and one carrier. Typically, however, there are multiple carriers and shippers involved in multiple transactions, which makes the management process more complex, and that much more time-consuming and inefficient. The process is labor intensive in that it relies on physically matching the hard copy of a bill of lading (BOL) for proof of delivery with the hard copy invoice and then trying to apply the terms of a hard copy contract to calculate whether the invoice amount is proper to pay. Exceptions need to be communicated to the trading partner, often involving faxing or mailing paper copies of support materials. Responses to requests for information often results in more paper copies with hand-written annotations that alter the understanding of how the transaction actually transpired. The ensuing series of repetitive and time consuming steps are a source of additional operational expense for both buyer and seller. Also, each BOL is often rated multiple times by multiple parties creating excessive redundancy.
• Due to such difficulties and convoluted processes, traditional shipment transaction management systems are highly susceptible to billing errors and fraud. For example, there has been no connection between the delivery of goods and when the shipper is billed for delivery. This may result in double billing, no billing at all, or overbilling the shipper for freight delivery charges. Also, auditing errors may occur, which results in incorrect billing or payment, which is exasperated when currency conversion is involved. In addition, the carrier waits a disproportionately long time for payment while the invoice is being audited and/or disputed. For example, traditionally, a delivery takes about five days whereas payment takes about forty-five days. This delay adversely affects the carrier's working capital resources which, in turn, raises the carrier's transaction cost and raises the prices the carrier must charge to earn the economic return required to remain in business. Where currency conversion is involved, conversion rates vary over time and thus delays due to auditing errors or delivery may result in a very different conversion rate, if the conversion is carried out on a basis that fluctuates with these delays.
• Additional costs arise as a result of the existing inefficiencies. Many of the costs are individually small, but very large in the aggregate. For example, the carrier incurs administrative costs including: the cost to create and deliver the initial invoice, costs of resolving billing disputes, costs of providing a signed copy of the BOL to the shipper, costs of posting accounts receivable and the costs of absorbing price fluctuations relative to currency conversion rates. The shipper incurs similar administrative costs to receive the bill, match it with the BOL, manually check the contracts to determine if pricing is correct, generate and deliver payment to the carrier.
• The complexity of modern transactions has also lead to expensive administrative costs associated with the transactions. Administrative costs include personnel, software, hardware, and entire departments created for managing commercial transactions to ensure accurate and timely billing and payment. These costs are furthered when transactional aspects become more complex, such as those involving fluctuating currency conversion rates. Most industries are quite competitive and any cost savings are therefore important. Administrative costs are targeted for reduction as no revenue is directly generated from administrative functions. However, administrative costs associated with commercial transactions have been difficult to reduce in the current business environment with widely diffused data and, in particular, with fluctuating currency rates for those transactions involving different currencies.
• The above and other difficulties in the management and coordination of transactions have presented administrative and cost challenges to business entities on buyer and seller ends of transactions, as well as those involved in other aspects of such transactions.
SUMMARY
• The present invention is directed to overcoming the above-mentioned challenges and others related to the types of devices and applications discussed above and in other applications. The present invention is exemplified in a number of implementations and applications, some of which are summarized below.
• According to an example embodiment of the present invention, a transaction processing approach involves automatically processing transactions between transaction parties as a function of transaction party rules and a currency conversion term.
• According to another example embodiment of the present invention, a transaction processing approach involves a transaction processor implemented for automatically processing currency exchange for a transaction involving contracting parties. The transaction processor is adapted to access contract-related business rules for the contracting parties and to automatically convert currency for a transaction related price for one of the contracting parties.
• In one implementation, the transaction processor uses the business rules to select a particular source for use in determining a currency exchange rate to use in converting the currency. In another implementation, the transaction processor uses business rules to select a particular date and time to use in setting a currency exchange rate to use in converting the currency (implemented, e.g., where transaction parties are in different time zones).
• In another implementation, a data storage arrangement stores the business rules used by the transaction processor. Transaction parties store business rules that can be used in a plurality of transactions. When the transaction processor receives transaction information for processing, it identifies parties to the transaction from the transaction information and accesses the stored business rules for the identified parties. Using these accessed business rules, the transaction processor automatically selects (e.g., using an exchange rate reference authorized by the business rules) an exchange rate and converts currency for the transaction using the exchange rate.
• The above summary of the present invention is not intended to describe each illustrated embodiment or every implementation of the present invention. The figures and detailed description that follow more particularly exemplify these embodiments.
BRIEF DESCRIPTION OF THE DRAWINGS
• The invention may be more completely understood in consideration of the detailed description of various embodiments of the invention in connection with the accompanying drawings, in which:
• FIG. 1 shows an arrangement and approach for transaction management, according to an example embodiment of the present invention;
• FIG. 2 shows a transaction processing arrangement, according to another example embodiment of the present invention; and
• FIG. 3 is a flow diagram showing an approach for transaction management involving currency conversion, according to another example embodiment of the present invention.
• While the invention is amenable to various modifications and alternative forms, specifics thereof have been shown by way of example in the drawings and will be described in detail. It should be understood, however, that the intention is not necessarily to limit the invention to the particular embodiments described. On the contrary, the intention is to cover all modifications, equivalents, and alternatives falling within the spirit and scope of the invention as defined by the appended claims.
DETAILED DESCRIPTION
• The present invention is believed to be applicable to a variety of different types of communications and financial process management approaches, and has been found to be particularly useful for applications involving the operational implementation and application of pricing (and related currency conversions) to transactions, payments, tracking and related aspects thereof. While the present invention is not necessarily limited to such approaches, various aspects of the invention may be appreciated through a discussion of various examples using these and other contexts.
• According to an example embodiment of the present invention, a transaction management arrangement uses transaction party (e.g., buyers and sellers) information to automatically derive pricing and/or payment options with currency conversion for individual transactions. The transaction information may include, for example, the identities of transaction parties, goods or services of the transaction, rules for processing currency conversions, user profile information specific to a particular party or parties to the transaction and others. When payment-related transaction functions are carried out, the currency conversion information is used to determine a payment amount for one or more of the transaction parties.
• The transaction information may be set out in specific contracts between transaction parties or implemented using previously-agreed upon or otherwise standard transaction practices. For instance, specific contracts under the terms of which a transaction is being prosecuted may include prices agreed upon between a buyer and seller for a particular item and/or transaction rules agreed upon for setting certain prices between a buyer and seller and for performing currency conversions. Conditional contract terms may also be implemented to facilitate the selection between one or more different contract terms, or to facilitate the derivation of a new contract term.
• Payment-related transaction functions as described above typically involve actual payment (i.e., transfer of money) to a seller on behalf of a buyer as well as settlement functions involving funding and accounting. In some applications, settlement functions involve the passage of information for accounting purposes including the posting of payment against accounts receivables. In addition, settlement functions involve, where appropriate, collecting money relating to the payment directly and/or via an indirect approach such as the drawdown of a credit line (and related accounting).
• Another example embodiment of the present invention is directed to a processing system that automatically manages transactions using a database implementation that provides a source of product prices and contracts for a multitude of transactions and transaction parties. In advance of any transaction, prospective buyers and sellers negotiate and/or validate prices and contract terms, or simply validate the electronic representation of prices and contract terms negotiated through other means. For each contract, a buyer reviews, accepts and/or disputes contract term(s) or contract term updates. Once the buyer accepts a contract, a processing center stores the accepted contract and activates the contract for current and/or future transactions.
• A collaborative contracts manager applies contract terms for actual performance of the contract, with parties involved in the transaction defining the applicable contract terms including pricing and related currency conversion terms. In some instances, parties to the transaction directly define contract terms by agreeing to specific terms. In other instances, parties to the transaction indirectly define contract terms by setting business rules by which the party is willing to participate in transactions. The collaborative contracts manager then uses these business rules to set contract terms. These business rules may, for example, be derived from and/or include buyer and/or seller profile information that includes contract-related data such as product, pricing, currency-conversion terms, shipping, payment terms, currency type, customs information and other typical contract data. The business rules may also include information that relates to a particular type of transaction or generally accepted contract type terms, and may not necessarily be specific to a particular transaction party or a particular transaction. Furthermore, the business rules may be implemented with tolerance information, such as tolerance payment ranges, currency conversion rate tolerance, delivery term ranges and other information for use in automatically negotiating or otherwise setting contract terms. These business rules can be stored in a database accessible to the collaborative contracts manager. All pricing information and business rules are retrievable by a transaction manager or by applications remote from the collaborative contracts manager such as those located at buyer or seller locations (with security controls for remote access).
• In some instances, the collaborative contracts manager automatically resolves (or attempts to resolve) transaction disputes or incongruous contract terms. Predefined and accepted business rules are used to automatically arrive at contract terms prior to executing a transaction. In addition, where business rules for different parties to a transaction call for different contract terms, the collaborative contracts manager attempts to automatically resolve the different terms using tolerances or other information allowing variance from actual business rules. For example, when used for currency conversion type applications, the collaborative contracts manager sets conversion parameters such as conversion rate and conversion timing based on specific contract terms and/or business rules for each party to a transaction. When the collaborative contracts manager is unable to automatically resolve disputes or incongruous contract terms, the processing system alerts parties involved in the unresolved transaction, who can interact with the processing system to work towards resolution.
• The user profiles discussed herein may include a variety of information for use in transaction management and otherwise. For instance, a typical such profile includes one or more of the following data: user identification information, business rules for the user, general ledger charts of accounts (e.g., and accounts receivable as posted against for payment processing as described above), identification of computer systems submitting contract or transaction data to the collaborative contracts manager, customer lists, vendor lists, contract and price approval policies, currency conversion policies, credit extension policies (e.g., for extending a credit liability to a transaction party), payment policies, transactional approval policies, operational roles (e.g., defining what functions a user associated with that role can perform), organizational hierarchy (e.g., defining how much of a company's data universe a user associated with a particular organizational node can access), and users. Seller customer list profiles may also include information further defining the business relationship with the customer from the Seller's perspective, for example, such as a retail buyer relationship and/or a wholesale buyer relationship. Buyer vendor (e.g., seller or distributor) list profiles may also include information further defining the business relationship with the vendor from the Buyer's perspective.
• In another example embodiment of the present invention, an electronic interface facilitates user access to a transaction management system such as that involving a collaborative contracts manager as discussed above. The electronic interface is adapted to communicate with the transaction management system for implementing a variety of processes, such as those involving the setting of contract terms, selection of currency conversion information and purchases of goods. The electronic interface also facilitates user-executed search functions for accessing information such as product information, product prices, currency information, contracts and price notes. Access to information via the user interface is adaptively controllable, for instance, using authorization approaches including user identification, interface identification, password access and others.
• The approaches to the use of business rules as well as contract information and user profiles (as part of business rules or otherwise) as discussed herein may be implemented in a variety of manners. One implementation involves a transaction management approach that is based on business rules previously established by buyer(s) and seller(s). The transaction management system includes a computer and communications node adapted for deriving prices for transactions as a function of pricing rules that are agreed upon by buying and selling entities related to the transaction. These pricing rules may be implemented via the business rules and/or may be tailored to a specific transaction. For general information regarding the use of business rules, and for specific information regarding transaction processing approaches that may be implemented in connection with one or more example embodiments discussed here, reference may be made to U.S. patent application Ser. No. 10/436,878 (USBA.101PA), filed May 12, 2003, which is fully incorporated herein by reference.
• In another example embodiment of the present invention, an automated pricing and payment system conducts transaction processes for transaction parties who provide respective sets of business rules with information for selecting a currency conversion standard. Currency conversion standards that may be implemented include, for example, public standards based upon published rates or other relative values of different currency, with the standards being susceptible to fluctuation as a function of currency conversion rates. The system includes a transaction processor that can be implemented, for example, using one or more of a variety of processors or combinations of processors, such as a CPU or a distributed processing arrangement with multiple processors that communicate over a network.
• The transaction processor is adapted to receive and use the business rules to derive a specific term for a transaction to be implemented by transaction parties, and sets a transaction price (in a first currency) as a function of the specific term. The specific term may be derived using, for example, information in a contract between the transaction parties directly identifying a fixed transaction price, or information that uses characteristics of the transaction together with stored information to provide a flexible transaction price. The transaction processor further selects a currency conversion standard using the business rules, and, using the selected standard, converts the set price from the first currency into a second different currency for at least one party to the transaction. Payment and settlement are then effected for the transaction as a function of the set price, the business rules and the converted set price. For instance, with a seller and buyer who contract for goods, payment and settlement can be effected by paying the seller in the first currency at the set price, and by extracting funds from the buyer in the converted set price. Further, fees associated with the currency conversion are selectively assessed with the effecting of payment and settlement, with a fee built into the selected currency conversion standard and/or being assessed separately to one or both of the transaction parties by the transaction processor.
• FIG. 1 is acommunication system100 including acollaborative contracts manager110 for handling business transactions between a seller and a buyer respectively at aseller terminal122 and abuyer terminal120, according to another example embodiment of the present invention. Theseller terminal122 includes aseller processor123 adapted to generate a seller profile, one or more authorized buyer profiles and contract data, and further to communicate the profiles and contract data to aseller interface133. Theseller interface133 includes adata processing device146 adapted to establish rules for a business transaction by submitting a seller profile, one or more authorized buyer profiles and contract data (i.e., received from the seller processor123) to aprocessor140. Theseller interface144 is further adapted for displaying contract data received from theprocessor140, and communicating to the seller from theprocessor140 the acceptance or dispute of contract data by a buyer. Theprocessor140 electronically organizes a seller's contract data using a seller's profile, with the contract data and profile being stored in adata storage unit142. Theseller terminal122 facilitates the control of access to the seller's contract data stored in thedata storage unit142 using, for example, authorization or password protection criteria.
• Thebuyer terminal120 includes abuyer processor124 adapted for generating a buyer profile and communicating the generated profile to a data processing device134 at abuyer interface132. Thebuyer interface132 is adapted for displaying contract data received from theprocessor140. The data processing device134 communicates a condition of acceptance of contract data as input at thebuyer interface132 to the processor. Theprocessor140 is coupled to acollaborative contracts manager110 that provides an interface for buyer and seller transaction management including pricing management. Theprocessor140 processes and stores pertinent business transaction information in thedata storage unit142, with access thereto being restricted to authorized users (i.e., authorized buyers and sellers via buyer and seller terminals).
• One or both of the buyer andseller terminals120 and122 is further adapted to provide currency conversion terms, which can be stored at the data storage unit142 (or, in the instance where a contract is currently processed, used directly by the processor140). Using the buyer and seller profiles, thecollaborative contracts manager110 automatically sets prices for transactions between the buyer and seller and, for at least one of the buyer and seller, sets currency conversion parameters.
• In one implementation, theprocessor140 interfaces with apayment system141 including anissuing institution144 and a payinginstitution152. An issuingprocessor145 of theissuing institution144 maintains a credit account for thebuyer terminal120 and debits (extends liability to) a particular buyer terminal's account for transactions managed with thecommunications system100, such as the shipment cost of a product, the product cost and others. In response to transactions managed at theprocessor140, a payingprocessor154 of the payinginstitution152 tenders payment to theseller terminal122, for example, when the receipt of goods is acknowledged by a buyer or at the time a buyer makes a purchase.
• In another implementation, thesystem100 includes or is adapted to interface with one or more currency exchange functions, represented bycurrency exchange function160. Thecurrency exchange function160 may be implemented via theprocessor140, which may perform a currency exchange (and assess associated fees, or build the fees into the exchange rate). Rules for effecting currency exchange, such as how to determine the currency exchange rate (e.g., using a standard index) and others can be supplied by buyer, seller or other transaction parties. The exchanged currency value is used, where applicable, for communicating payment information to thepayment system141.
• In some applications, the currency exchange function is implemented separately from theprocessor140, which selects the exchange function to execute the exchange, e.g., by selecting a particular exchange company, by selecting a particular published standard for the particular type of currencies being converted or by selecting a standard among those available for the particular conversion. This external exchange is implemented at a position in the payment chain that is selected as a function of the application. For instance, when the seller wishes to be paid in a particular currency that requires a conversion, theprocessor140 can direct thepayment system141 to use a particular source to execute thecurrency exchange function160. In other applications, thepayment system141 performs the exchange.
• In other applications involving an external exchange function, the party or parties performing the exchange also interact with theprocessor140 and, in some instances, with thecollaborative contracts manager110. Such an external party may further implement user profiles and other information in a manner similar to that discussed above and as can be implemented with sellers or buyers viaterminals122 or120, respectively. For example, contract terms such as exchange rate terms can be set using business rules related to the exchange rate, with the collaborative contracts manager using business rules to arrive at an acceptable exchange rate. The business rules used for setting an exchange rate are chosen as a function of the parties carrying out the exchange. For example, where a seller atseller terminal122 requests to be paid in a particular currency, business rules for that seller and the entity performing the exchange may be used to set the exchange rate.
• In various implementations, an entity managing theprocessor140 may interact as an intermediary between a buying or selling party and a currency exchange entity. Here, the buying or selling parties arrive at a currency exchange agreement with the entity managing theprocessor140. In turn, the entity managing theprocessor140 may have a different agreement with a currency exchange entity. In this regard, the buying or selling party receive an exchange rate agreed upon via theprocessor140, and the managing entity running the processor executes the exchange at a rate agreed upon with the currency exchange entity. In this regard, the managing entity running theprocessor140 may negotiate a preferential exchange rate using its high volume (as generated by a multitude of buying and selling parties), and charge the buying and selling entities a less preferential exchange rate.
• FIG. 2 shows atransaction processing arrangement200 including atransaction processor210 programmed to automatically process currency conversion aspects of a transaction, according to another example embodiment of the present invention. Thetransaction processor210 is in communication with adatabase212 and an exchangerate assignment engine214. Thedatabase212 stores transaction-related information including rules for currency conversion, as well as auditing information for individual currency conversions as applicable to one or more transactions. Thecurrency conversion engine214 processes currency conversion related aspects of a transaction using rules from thedatabase212 and at the direction of thetransaction processor210. In various implementations, thedatabase212 and/or the exchangerate assignment engine214 is implemented as part of thetransaction processor210. In other implementations, one or both of thedatabase212 and the exchangerate assignment engine214 are located at a remote location and/or include a plurality of circuits at different locations.
• A plurality ofuser nodes220,222,224,226 and228 are communicatively coupled with thetransaction processor210. The user nodes220-228 may, for example, include one or more of a buyer, seller, distributor, shipper, carrier, government agency, financial institution or other type of individual, group or agency that would be involved in a transaction. Referring toFIG. 1 as an example, one or more of theseller terminal122,buyer terminal120,processor140,payment system141 or currency exchange entity effecting thecurrency exchange function160 may be implemented at one of the user nodes220-228.
• In another implementation, thetransaction processor210 is adapted to automatically apply currency rules for assigning currency exchange rates or other parameters to a transaction when new transaction information is received or executed. This new transaction information may, e.g., be detailed in a transaction document such as an order or invoice. The currency rules are used by the exchangerate assignment engine214 to assign the exchange rate to the transaction or to a portion of the transaction to which the exchange rate applies.
• When an update to the currency rules is received at the transaction processor210 (e.g., via one of the user nodes220-228), a new call to assign an exchange rate to a transaction is made by the processor and corresponding updates are made. For instance, when a transaction for a particular user has been assigned a particular exchange rate parameter and that user inputs an update to currency rules used to assign the exchange rate parameter, thetransaction processor210 automatically updates the parameter assigned to the transaction. Optionally, the user providing the assignment rule update selectively controls the application of the updated rules, for example where the user desires to selectively apply the updated rules to new transactions.
• The user nodes220-228 can interact with thetransaction processor210 for providing a variety of different types of transaction-related information. Such transaction information may include, for example, currency exchange parameters, accounting rules, orders, invoices, shipping documents, payment authorization, payment execution, customs documents, security documents and others.
• Thetransaction processor210 records, in thedatabase212, currency-conversion related information to facilitate the auditing of individual and/or group transactions involving currency conversion. This information may include one or more of a variety of types of information, with examples applicable toFIG. 2 including “pay to” currency type and amount, “bill to” currency type and amount, conversion date/time and conversion rate. When outside entities at nodes220-228 (or others, such as a regulatory entity) is allowed to access thedatabase212, audit information is made readily available (e.g., for compliance with Sarbanes-Oxley related rules).
• The conversion date and rate are selectively applied to one or both of the “pay to” and “bill to” portions of the transaction as a function of the types of currencies and/or business rules associated with parties to a particular transaction. Where a transaction involves only one currency conversion (i.e., between a billing and paying currency), thetransaction processor210 performs a currency conversion in connection with the transaction portion relevant to the currency conversion.
• Thesystem200 can be implemented using a multitude of nodes and arrangements, and is applicable to a variety of transaction processing approaches. However, for purposes of discussion, each of the user nodes is implemented as follows in connection with a particular transaction.Node220 is a buyer node representing a buyer in a transaction andnode222 is a seller node representing a seller.Nodes224,226 and228 respectively represent financial institutions.
• Thebuyer220 and theseller222 provide business rules that are stored in thedatabase212 for use by thetransaction processor210. When a transaction initiating event such as a request for goods and/or services by thebuyer220 occurs, thetransaction processor210 retrieves and uses the business rules to derive a term for use in setting a price for the transaction. For example, where thebuyer220 andseller222 store business rules indicating a contractual relationship and information for setting a price, thetransaction processor210 derives a price term, such as the price per unit, for the transaction.
• Thetransaction processor210 receives transaction initiating event data with a transactiondata receiving function230 and matches the event data with a particular user (e.g., thebuyer220 and/or the seller222) with amatch function231. Such event data may include, for example, an order or an invoice relating to a transaction between users. The matching may involve, for example, matching the event data to a particular user or to a particular transaction using a product identification term that is associated with goods and/or services for the transaction. Arule retrieval function232 implements the matched user information to retrieve business rules applicable to the transaction event from the database212 (e.g., by retrieving business rules tagged or otherwise associated with the matched user information).
• Apricing engine233 uses the retrieved business rules to set a price for the transaction in a first currency, for example, by using contract price information in the business rules or by calculating a price using terms in the business rules and other characteristics of the transaction such as quantity, transportation or regulatory issues. Thepricing engine233 uses information in documents (e.g., the transaction initiating event data) to identify those rules in the retrieved rules to use in setting the price. Such information may include, for example, a contract identifier that identifies a specific contract to which the information applies, an item identifier that identifies an item for which the price is being set, a currency code identifying the currency in which the transaction is denominated quantity and order date. Using these approaches, the price set via the pricing engine is the “pay to” price for theseller222 to be paid.
• An exchangerate retrieval function234 retrieves an exchange rate using the business rules and the exchangerate assignment engine214. In some instances, the exchangerate assignment engine214 is functionally implemented with the exchangerate retrieval function234. The business rules may specify a particular approach to assigning an exchange rate, such as by identifying a particular conversion standard to use (e.g., a published standard), or by identifying a conversion standard using input received from one or more of the buyer and seller. After the exchange rate has been set, anexchange pricing function235 sets the price for the transaction in a second currency. This price is the “bill to” price that thebuyer220 will be billed for the transaction.
• The transfer of funds between thefinancial institutions224,226 and, in some instances,228 is carried out in accordance with the above approach. For example, where thefinancial institutions224 and226 are respectively the buyer's and seller's financial institutions, funds in the “bill to” amount are transferred from the buyer's financial institution and funds in the “pay to” amount are transferred to the seller's financial institution. In some instances, the business rules in thedatabase212 indicate that one of the buyer's and seller's financial institutions will carry out a currency conversion. In other instances, the business rules specify that a thirdfinancial institution228 carry out the currency conversion.
• In some applications, thetransaction processor210 further carries out settlement functions for transactions, including, e.g., functions relating to accounting and payment functions. In one accounting function example, when theseller222 is paid on behalf of the buyer220 (with appropriate currency conversion characteristics), thetransaction processor210 automatically posts the payment against an accounts receivable record for the seller222 (e.g., stored in thedatabase212, at theseller222 or elsewhere). In a payment function example, thetransaction processor210 selects a funding source for paying theseller222 and, accordingly, carries out payment settlement functions for extracting funds from thebuyer220. These funds may be extracted directly (e.g., from the buyer's financial institution224) or indirectly via a credit extension approach, such as by drawing down a credit line for the buyer. In some applications, funds are extracted directly and accordingly provided directly to theseller222. In other applications, funds are provided to theseller222 on behalf of thebuyer220, with the payment settlement function being subsequently carried out for retrieving funds from the buyer to cover the payment for the seller (and, e.g., to cover processing and/or conversion fees).
• In some implementations, thetransaction processor210 carries out the currency conversion using, for example, the thirdfinancial institution228. Funds associated with the “bill to” amount received from the buyer'sfinancial institution224 are transferred to thirdfinancial institution228, and funds in the “pay to” amount are transferred from the same (or another) financial institution and transferred to the seller'sfinancial institution226.
• While a variety of currency conversion related payment functions can be implemented with thetransaction processor210, with a few examples of these functions discussed above, the transaction processor records auditing data regarding each conversion. This data may be stored, for example, in thedatabase212 or provided to one or more of the nodes220-228. Example auditing data includes one or more of the “bill to” and “pay to” amounts (and currency types), as well as the transaction date, exchange rate information and more as discussed above and otherwise.
• In a more particular implementation, thetransaction processor210 further provides reconciliation information for ameliorating invoice or other discrepancies relating to currency conversions. Discrepancies may arise, for example, where the transaction is susceptible to fluctuation in currency exchange rate. Other discrepancies (or the potential for discrepancies) arise when timing characteristics of a particular transaction affect exchange rate; in these instances, thetransaction processor210 records the time used in determining the exchange rate.
• Associated fees with the conversion may be assessed to thebuyer220 and/or theseller220 using one or more of a variety of approaches. These fees may either built into the currency conversion to the “bill to” amount or separately assessed to theseller222 and/or another party and may, e.g., be based on business rules stored in thedatabase212.
• Various bases may be used in determining which financial portion of a particular transaction is to be used in assessing fees (or, accordingly performing the currency exchange with built-in fees). For example, in the instance where a transaction uses the “bill to” amount as the basis for performing a currency conversion, a particular transaction amount is agreed in terms of the buyer's currency. Usingnodes220 and222 respectively as buyer and seller nodes again, the transaction processor facilitates the billing of thebuyer220 in the transaction amount (“bill to” amount) in a first currency. A currency conversion is then made from the “bill to” currency to the “pay to” currency, with the “pay to” currency being provided to theseller222. Fees associated with this currency conversion may, for example, be built into the conversion or separately assessed to the seller and/or other party (e.g., based on business rules).
• A variety of other transaction-related aspects may be implemented with thesystem200 as discussed above or otherwise. In some instances, one or more of the user nodes220-228 include control input interfaces (e.g., graphic user interfaces) that communicate with thetransaction processor210, with users at the nodes being able to provide transaction-related information such as currency exchange rules. In other instances, thetransaction processor210 automatically accesses information from the user nodes for a variety of purposes, such as retrieving currency exchange rules (e.g., rates, rate sources or exchange sources) or updating related fields. This interaction between the nodes and thetransaction processor210 is controlled using, for example, authorization for access such as password-protected authorization and others.
• Depending upon the application, thetransaction processor210 assesses fees to one or more of the user nodes220-228. In some instances, these fees are built into currency exchange types of transactions. In other instances, the fees are based upon a percentage of the amount of payment for a transaction. In still other instances, the fees involve both a fee based on the amount of payment for a transaction as well as an amount relating to a currency conversion. These fees may be applied to one or more of the parties to the transaction, depending upon the nature of the transaction, contract agreements with transaction parties and other considerations. For instance, some transaction implementations involving buyers and sellers are processed such that the seller pays all fees associated with a particular transaction. Processing fees such as these are allocated for the operator of thetransaction processor210, which may be an entity separate from any transaction or integral to the transaction, such as a financial institution related to one of the transaction parties.
• In another example embodiment, thetransaction processor210 is further adapted to grant and control information exchange with thedatabase212 as a function of inputs received from the nodes220-228, such as authorization inputs and transaction-specific inputs. When users at one of the nodes220-228 attempt to send information to or retrieve information from thetransaction processor210, authorization information from the users is used to control the information transfer. The authorization information may include, for example, access-type information (e.g., a password or user ID) or simply document information that thetransaction processor210 recognizes.
• Thetransaction processor210 is configured and arranged to outsource bulk currency conversions involving two or more transactions, according to another example embodiment of the present invention. For example, where multiple transactions involve conversion between a first currency and a second currency, thetransaction processor210 can selectively have a bulk sum of funds converted, commensurate with the combined sum from the multiple transactions, from an external financial institution. Thetransaction processor210 can then effect payment and settlement for the transactions, using the converted funds for all of the multiple transactions. In some applications, thetransaction processor210 converts funds for each transaction using a conversion rate that is higher than the obtained conversion rate for the bulk conversion, keeping a net difference in funds as a transaction fee for performing the conversion, for each transaction. Furthermore, conversion rates for different transaction parties among the multiple transaction may be differently applied, for example, as relevant to contracts between the transaction parties and an operator of thetransaction processor210. The conversion rates may further be selected, for each transaction party, from a range of rates deemed acceptable in a contract with each transaction party. These rates and their applications are implemented using business rules for each transaction party, as appropriate, by thetransaction processor210.
• FIG. 3 is a flowchart illustrating an example approach for automated transaction management involving currency conversion, according to another example embodiment of the present invention. Transaction-related information for a pricing function is received atblock300. This transaction-related information may include, for example, an electronic order or invoice, or other information describing pricing or currency characteristics for a particular transaction or portion of a transaction. The transaction-related information also includes identification data for at least one transaction party.
• At block310, the transaction-related information is associated with transaction parties using the identification data, which can include one or more of a variety of information that can be used to identify one or more transaction parties. For example, data in an electronic document can be used to identify the source of the document, which is then identified as one of the transaction parties. The data may also be used to directly identify a transaction to which the data applies using, e.g., a transaction ID number. Further, the data can be used indirectly to identify a transaction to which it applies, with one or more characteristics of the transaction being ascertained and associated with a particular transaction (e.g., where a certain amount of matching data is used to define a match between the data and a transaction).
• A pricing term is set using business rules from one or more parties to the transaction atblock320, and a price for the transaction is set using the pricing term atblock330. After the price has been set, a “pay to” price is derived atblock340, representing the price (in a first currency) to be paid to a seller transaction party.
• Atblock340, business rules from the transaction parties are used to establish currency conversion rules. The currency conversion rules may include, for example, one or more of the above-discussed rules and characteristics associated with currency conversion such as conversion rate, currency type and exchange source. Atblock350, a currency conversion rate is retrieved from a rate source, such as a publicly-available rate source, and used to set a currency conversion rate. Atblock360, the derived “pay to” price is converted to a different currency at a “bill to” price using the set currency conversion rate, the “bill to” price being billed to a buyer transaction party.
• After the “bill to” price has been set, payment is processed atblock370, with the buyer transaction party being billed in the “bill to” amount and the seller transaction party being paid in the “pay to” amount. Funds from each separate currency for the “bill to” and “pay to” amount are typically collected and paid from a common financial source, which extracts value from the conversion.
• In some implementations, a payment processing entity facilitates the receipt and payment of “bill to” and “pay to” funds by exchanging a debt responsibility with different financial institutions. For example, where the payment processing entity is owed funds in the “pay to” currency from a first bank, funds in the amount of the “pay to” amount can be transferred from the first bank to the seller transaction party. The payment processing entity then takes as a receipt the funds from the buyer transaction party in the “bill to” amount and currency. Similarly, where the payment processing entity owes finds in the “bill to” currency to a creditor, payment in the “bill to” amount from the buyer transaction party (or the associated financial institution) can be directed to the creditor, with the payment processing entity paying the seller transaction party the “pay to” amount in the “pay to” currency.
• Atblock380, auditing data is recorded for tracking purposes relating to the currency conversion and the transaction in which it is implemented. For instance, the “pay to” and “bill to” currency and amount are stored, as well as information that can be used to substantiate a currency conversion rate, such as conversion data and rate. The conversion date information is further stored as relevant to a particular time zone, such that transactions with parties in different time zones can be facilitated. The particular time zone (as well as other currency conversion parameters) may, for example, be retrieved with the business rules atblock320.
• The transaction processing approaches discussed above may be implemented in connection with a variety of types of business transactions involving the transfer of funds, including those discussed above and others. In this regard, for general information regarding transaction processing and for specific information regarding shipping type transactions and approaches with which the currency conversion approaches of the present invention may be implemented, reference may be made to U.S. Pat. No. 5,910,896 to Hahn-Carlson, which is fully incorporated herein by reference.
• While certain aspects of the present invention have been described with reference to several particular example embodiments, those skilled in the art will recognize that many changes may be made thereto without departing from the spirit and scope of the present invention, aspects of which are set forth in the following claims.

Claims (17)

1. An automated transaction pricing and payment system comprising:

a rule-variable database that stores sets of predefined contract variables specific to each of a plurality of established contracts respectively agreed upon by parties including buyers and sellers, and sets of business rule variables for the buyers and sellers, the business rule variables including timing criteria and a predefined standard for computing currency conversion data, the standard being susceptible to fluctuation as a function of currency conversion rates;

a correlation database that stores correlation data for correlating received transaction data sets with a set of predefined contract variables and sets of business rule variables for a buyer and a seller involved in a transaction to which the transaction data set pertains;

a transaction processing engine configured with software to, for each received transaction data set for a transaction involving a buyer and seller,

use data in the correlation database to correlate the received transaction data set with contract variables and sets of business rule variables for the buyer and seller, and

execute a derivation algorithm, using the correlated contract variables and business rule variables as inputs to the algorithm, to derive a specific pricing term for the transaction and to set a price for the transaction based upon the specific term, the price being in a first currency; and

a pricing-settlement engine configured to respond to the derived pricing term by, for each transaction, using the correlated variables to

select a currency conversion standard and time based upon timing criteria and a predefined standard in the correlated business rule variables,

using the timing criteria and an active currency conversion rate defined for the predefined standard, convert the set price from the first currency into a converted price in a second different currency, and

generate and output electronic payment instructions to effect payment and settlement for the transaction based upon the set price, the business rule variables and the converted price.

2. The system ofclaim 1, wherein transaction processing engine is configured to execute a derivation algorithm by dynamically selecting and implementing a derivation algorithm on a transaction-by-transaction basis using the correlated business rule variables for at least one party to the transaction.

3. The system ofclaim 1, wherein the transaction processing engine is configured to execute a derivation algorithm by dynamically selecting and implementing a derivation algorithm on a transaction-by-transaction basis based upon currency conversion criteria specified in the business rule variables for at least one party to the transaction.

4. The system ofclaim 1, wherein the transaction processing engine is configured to generate new pricing term derivation variables specific to the transaction based upon correlated business rule variables for buyer and seller parties to the transaction, and to execute the derivation algorithm by using the generated derivation variables as inputs.

5. The system ofclaim 1, wherein the transaction processing engine is configured to generate new contract variables for the transaction using correlated business rule variables for buyer and seller parties to the transaction, and to execute the derivation algorithm by using the new contract variables as inputs to the algorithm.

6. The system ofclaim 1, wherein the pricing-settlement engine is configured to generate new currency conversion variables using correlated business rule variables, and to select the currency conversion standard by using the generated currency conversion variables to select the standard.

7. The system ofclaim 1, wherein the transaction processing engine is configured to execute a derivation algorithm by using stored contract pricing variables, previously agreed upon by the buyer and the seller, as inputs to the algorithm.

8. The system ofclaim 1, wherein the transaction processing engine is configured to match a product identification term in the correlated business rule variables for the buyer with a seller product specified in the transaction data set, and to execute a derivation algorithm to derive a specific pricing term by using correlated variables pertaining to the identified product as inputs to the algorithm.

9. The system ofclaim 1, wherein the pricing-settlement engine is configured to select a currency conversion standard based upon correlated business rule variables that specify a timing characteristic for determining a currency conversion rate.

10. The system ofclaim 1, wherein the pricing-settlement engine is configured to use correlated business rule variables that specify a reference location to set a date and time for determining a currency conversion rate, and to convert the set price using a currency conversion rate for the set date and time.

11. The system ofclaim 1, wherein the transaction processing engine is configured to execute the derivation algorithm using correlated contract variables defined for an established contract between a financing entity providing funds to effect payment for the transaction and one of a buyer and seller participant in the transaction.

12. The system ofclaim 1, wherein the pricing-settlement engine is configured to, for at least two transactions involving a currency conversion between a first and second currency during a particular time period,

convert the set price from the first currency into a converted price in a second different currency for each transaction by converting a bulk sum of currency for set prices in each transaction, processed using disparate derivation algorithm inputs, from the first currency to the second currency based upon a conversion configuration globally applied across the transactions, and

generate and output respective sets of electronic payment instructions for each transaction to effect payment individually for each party to each of the transactions.

13. The system ofclaim 1, wherein the pricing-settlement engine is configured to assess a currency conversion fee to at least one party to the transaction based upon the generated electronic payment data.

14. The system ofclaim 1, wherein the pricing-settlement engine is configured to convert the set price from the first currency into a converted currency by converting funds relating to the set price from the first currency to a second currency at a first currency conversion rate and to convert funds relating to the set price for at least one party to the transaction at a different currency conversion rate.

15. The system ofclaim 1, wherein the pricing-settlement engine is configured to select a currency conversion standard based upon correlated business rule variables indicating an acceptable range of currency exchange rates and external data indicating currently-available exchange rates.

16. The system ofclaim 1, wherein the pricing-settlement engine is further configured with software to

compare an actual currency conversion rate specified by the selected currency conversion standard to a budgeted currency conversion rate specified in the correlated business rule variables for a transaction party;

in response to the actual currency conversion rate being different than the budgeted currency conversion rate, calculate a difference between the converted set price using the actual currency conversion rate and a set price as converted using the budgeted currency conversion rate, and assess a fee to one of the transaction parties based upon the calculated difference.

17. The system ofclaim 1,

further including an auditing engine configured to audit the payment for each transaction using the correlated business rule variables and contract variables to determine a condition of payment authorization for the transaction, and

wherein the pricing-settlement engine is configured to generate and output electronic payment instructions in response to the determined condition of payment authorization.

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