Field of the Invention

The present invention relates to the field of financial security. More particularly, the invention relates to a system for validation of cheques by using mobile devices, and to a validation method thereof.

Background of the Invention

After a lot of years dealing with processing of cheques, the conclusion is that this method is not sufficiently effective. Inspection of cheques in order to estimate the risk involved requires many approvals and a long bureaucratic process. This process is exhausting for the business owner. In addition, the businesses owner who continuously faces cash flow problems must know whether or not he will be actually be able to collect the amounts given in each cheque he wishes to cash. This risk estimation may be critical to the business owner, since it affects many financial considerations, such as credit level, stock holding and cash flow.

Also, cheque returns due to problems in the bank account cause payment delay and costs money, which is charged by the bank for handling each cheque return (rejection).

Some existing solutions include online depositing with no examination, which may lead to substantial risks. Other solutions include some level of examination, but require a very complicated procedure.

It is therefore an object of the present invention to overcome the drawbacks of the existing solution and provide a comfortable and efficient procedure for examining cheques, in order to ensure its payability.

It is another object of the present invention to provide an efficient procedure for examining cheques, which will allow depositing of cheques only after passing a reliability test which will reduce the chance of cheque returns. It is a further object of the present invention to provide answer on the fly, regarding the reliability and risk of each examined cheque.

It is a yet another object of the present invention to perform cheque discount after passing reliability and risk test.

Other objects and advantages of the invention will become apparent as the description proceeds.

Summary of the Invention

A cheques validation method, comprising: a) receiving a cheques transaction of one or more cheques for validation, wherein the one or more cheques are received from a cheques issuer or from a cheques receiver; b) collecting information related to the cheques issuer profile characteristics, financial activity, business conduct and historical cheques transactions, wherein the information is collected from the cheques issuer, from a corresponding cheques validation system database, and from financial entities holding corresponding information; c) inspecting predetermined parameters, based on the one or more cheques of the cheques transaction and on the collected information of step b) above; and d) evaluating the inspected predetermined parameters with their predetermined significance, and calculating a validation score and acceptance/decline recommendation for the cheques transaction.

The validation of the inspected predetermined parameters may be performed with different adaption for new or existing cheques issuers.

The predetermined parameters may be selected from the group of: the cheques issuer's bank account limitations, cheques issuer's default events, cheques issuer's bank account co-owners financial accountability, the total number of cheques in a single cheques transaction, cheques issuer's characteristics such as seniority, successful or default cheques transactions along the past 6 months, the total cheques amount a transaction, outstanding uncashed cheques from previous transactions, the transaction duration upon last cheque cashing, the number of completed transactions by the same issuer, the time since the first transaction of the same issuer approved, the difference between the number of cheques issued in the inspected transaction, to the highest number of cheques issued in past transactions, negative indications related to past transactions, location data related to the cheques and to the cheques issuer, or any combination thereof.

A cheques validation system, comprising: a) a central computer adapted with suitable processing, memory and storage hardware, for executing instruction sets of a dedicated cheques validation software, for storing one or more databases thereof, and for communicating with one or more cheques validation client applications operated by input computing/mobile devices, and with other computers employed by banking entities and other business information resources; and b) one or more input computing/mobile devices running the one or more cheques validation client applications, utilizing the input computing/mobile device's capabilities to acquire images of one or more cheques associated to a cheques transaction, to submit the acquired cheques' images and related information to the central computer for validation, and to receive and display corresponding validations' results therefrom, where the cheques validation software of the central computer is configured to receive the submitted cheques' images and related information, to collect relative financial information from the banking entities and other business information resources, to inspect predetermined parameters along with their predetermined significance to the cheques payability chances, based on the one or more cheques and issuers thereof, and on the collected information from computers employed by banking entities and other business information resources,, and accordingly to generate a validation score and a corresponding acceptance/decline recommendation for the cheques transaction, submitted back to the one or more input computing/mobile devices.

The dedicated cheques validation software may be configured to inspect the predetermined parameters with different significance for new or existing cheques issuers.

The predetermined parameters are selected from the group of: the cheques issuer's bank account limitations, cheques issuer's default events, cheques issuer's bank account co-owners financial accountability, the total number of cheques in a single cheques transaction, cheques issuer's characteristics such as seniority, successful or default cheques transactions along the past 6 months, the total cheques amount a transaction, outstanding uncashed cheques from previous transactions, the transaction duration upon last cheque cashing, the number of completed transactions by the same issuer, the time since the first transaction of the same issuer approved, the difference between the number of cheques issued in the inspected transaction, to the highest number of cheques issued in past transactions, negative indications related to past transactions, location data related to the cheques and to the cheques issuer, or any combination thereof.

The dedicated cheques validation software may be configured to collect mass data related to historical scores and allow/decline recommendation generated by the system to cheques transactions and cheques issuers, and the final outcome of the cheques transactions, and to update its predetermined parameters and the significance thereof, in the generated score calculation.

Brief Description of the Drawings

The above and other characteristics and advantages of the invention will be better understood through the following illustrative and non-limitative detailed description of preferred embodiments thereof, with reference to the appended drawings, wherein: - Fig. 1 illustrates a flowchart of an exemplary validation process of cheques performed by the proposed system, according to an embodiment of the invention;

- Fig. 2 illustrates a flowchart of an exemplary financial validation, according to an embodiment of the invention;

- Fig. 3 illustrates a flowchart of an inclusive validation performed when an inspection step performed in bank account validation of Fig. 2 returns a marginal indication;

- Fig. 4 illustrates a flowchart of a lighter inclusive validation performed when an inspection step performed in bank account validation of Fig. 2 returns a marginal indication; and

- Fig. 5 illustrates a cheques validation system, according to an embodiment of the invention.

Detailed Description of the Invention

The present invention relates to a system for validating cheques using mobile devices (e.g., smartphones) and to a validation method applied by the proposed system. The proposed system may be used by either organizational or individual users for evaluating the issuing and/or accepting cheques, where a score is designated to cheques where the score is being calculated by predetermined parameters found associated to cheques payability chances. The calculated score is compared to a predetermined threshold and accordingly, the user can decides whether or not to issue cheques, or whether or not to accept/decline issued cheques.

Furthermore, the proposed system may also perform a learning process, based on previously accepted cheques, and accordingly, updating the abovementioned predetermined parameters and the final score calculation manner.

The proposed system designates a score to a cheques issuer (i.e., being a user who considers to issue cheques, or cheques of whom are being considered by a user of the proposed system) and subsequently, the cheque transaction (i.e., issued cheques) is scored, where the issuer's score cannot be exceeded by the transaction's score.

Furthermore, upon submitting a cheque for inspection, the total amount of outstanding (i.e., uncashed) cheques issued by the same cheques' issuer is considered in determining the newly submitted cheque's score, to be compared to the issuer's score.

For example, a cheque transaction of a new user (i.e., of whom no previous cheques were inspected by the system) may be designated with a limited score (i.e., , for limiting the exposure of cheques receivers to a credit and fraud risks), where following a predetermined period during which successful transactions information accumulates with respect to the cheques issuer, the limitations are reduced and higher scores may be designated for following cheques transactions.

Another example is whereas bank accounts, which are defined as having credit problems, correspondingly affect their owner's transactions' score designated by the proposed system to the associated users, such as to allow the associated users to make transactions yet with a limited risk to other users who receive cheques therefrom.

The proposed system may also track the average number of issued cheques associated to corresponding account(s) of inspected cheques, and prevent the possibility of exceeding this average number, according to a predetermined set of rules.

According to an embodiment of the present invention, the proposed system is adapted to perform a variety of validations, including the following: a. Validations related to cheques issuers' bank accounts, in order to detect whether or not a cheques issuer's account is blocked, limited, or not allowed for cheques transactions, or has been previously blocked to any similar extent. This type of validation may require aggregating corresponding data from the records of a bank, with which the proposed system can communicate; b. Validations in records of external resources, such as business data information services; c. Validations related to cheques issuer's bank account co-owners, for validating the financial status of each of the other co-owners; d. Validations related to multiple cheques issued from a single cheques issuer's account.

Upon obtaining inclusive positive validations results, inspected cheques are designated with a corresponding transaction recommendation score, by which the receiving entity/user of the proposed system can decide whether to accept the issued cheques or not, while obtaining a negative result in any of the validations, may result with declining inspected cheques with no further required inspection.

Fig. 1 illustrates a flowchart of an exemplary validation process of cheques performed by the proposed system, according to an embodiment of the invention. At the first step 101, a user submits a cheque for inspection. At the next step 102, the formal data of each cheque is examined and verified (e.g., cheque number, bank number, bank branch number, bank account number, issuer's identification number, etc.). At the next step 103, the cheque issuer's bank account and financial accountability is inspected (as illustrated in Fig. 2), and a score is accordingly designated to the cheque transaction. At the next step 104, the cheque transaction's score is considered with respect to a predetermined initial threshold score and generates an allowed recommendation 105 or a declined recommendation 106.

Fig. 2 illustrates a flowchart of an exemplary financial validation 103, according to an embodiment of the invention. At step 201, the cheques issuer's account is inspected for whether it is listed in a predetermined 'black list' (e.g., a list comprising cheques issuers previously known as holding high payability risk). If it is listed in a 'black list', the corresponding inspected cheques transaction is declined (step 106 of Fig. 1). If not listed in a 'black list', the account is inspected, at step 202, for being limited (e.g., according to the local state bank services), and if it is significantly limited, the inspected cheque is declined (step 106 of Fig. 1). If not limited, at the next step 203 a validation is performed with external business information resources (e.g., credit rating bodies such as BDI ^® , state central bank, credit bureau, etc.) that hold information related to the cheques issuer financial accountability. At the next step 204, additional financial accountability validation is performed in records of a banking entity (e.g., state central bank) that hold information related to the cheques issuer bank account financial accountability. At the next step 205, the accountability of co-owners in the bank account associated with the inspected cheque is validated with information received from external business information resources.

Finally, in step 206, a validation score is designated to the cheques transaction according to indications detected in inspection steps 201-205. While significant negative indications being detected in steps 202-205 result in a decline recommendation, any other indication affects the final score to a predetermined extent. For example, whereas a preliminary high score is designated to a new cheques issuer, e.g. 1000, and the maximum score that can be designated to financial validation 103 is 1200, even if no significant indications are found in steps 202-205, a few indications of predetermined types (e.g., a cheques issuer account's obligo was limited in the past) may still reduce the transaction's score to below 1000, resulting in a decline recommendation.

According to an embodiment of the invention, validation steps 203 and 205 returns a 3-parameters-indication of: result, severity code, and literal comment(s), for example: "V, 000, proper" or "O, 001, check", where "X" is equal to "Declined", "V" means the inspection passed, "O" means marginal indications found, and the three digits code is utilized for classifying severity of events that triggered the marginal indications (such as not resulting with a decline recommendations) found in the inspection.

A marginal (e.g., "O") determines whether a more fundamental validation is required, For example, Fig. 3 illustrates a flowchart of an inclusive validation performed when inspection steps 203 or 205 returns a marginal indication (e.g., "O"), according to an embodiment of the invention.

As a first step 301, the returned indication is received and the included severity code is read. If the code indicates on events (e.g., bankruptcy events, judgement debt enforcement events, etc.) designated as a no-go for approving the cheque, a decline recommendation is generated. Otherwise the inspected cheque transaction is examined at step 302 for whether it exceeds/is within a predetermined amount limit corresponding to the severity code received in steps 203 or 205. At the next step 303, each inspected cheque is examined for whether it exceeds/is within a predetermined credit level designated to the cheque issuer's account (i.e., whether the cheque withdraw limit has been reached or not) according to the limitations of the issuer's bank, and for whether it exceeds/is within a predetermined cheque amount limit designated to the cheque issuer. At the next step 304, the inspected cheque transaction is examined for whether the total sum of multiple issued cheques exceeds/is within the predetermined credit level designated to the cheques issuer. Passing all the validation steps 301-304 returns the inspection process back to track (i.e., as described in Fig. 2), while failing any of steps 301-304 results in a decline recommendation (step 106 of Fig. 1).

Fig. 4 illustrates a flowchart of a lighter inclusive validation performed when the severity code returned from validation steps 203 and/or 205 indicates on less significant events. In this case, a validation similar to the process described in Fig. 3 is performed, except for skipping steps 301 and 302.

The final outcome of the validation process of Figs. 1-4 is a transaction's allow/decline recommendation.

Fig. 5 illustrates a cheques validation system, according to an embodiment of the invention. System 500 comprises a central computer 510 adapted with suitable processing hardware, memory and storage hardware, for executing sets of instruction of a dedicated cheques validation software 511 (not shown), for storing one or more databases thereof (e.g., users' accounts database, historical transactions database, etc.), and for communicating with one or more cheque validation client applications 521 and 531 (not shown) operated by input computing devices such as mobile devices of users such as smartphones 520 and tablets 530. This enables the users of smartphones 520 and tablets 530 to operate a user interface, while utilizing common mobile device's capabilities (e.g., image acquiring and processing, communication) to acquire images of inspected cheques, to identify information such as cheques issuer details and the associated bank account included in the cheques, to submit such acquired information related to one or more cheques to central computer 510 for validation, and to receive corresponding decline/approval recommendations and scoring generated by software 511 of central computer 510 with respect to the submitted information for validation, as well as further financial information related to validated cheques, and issuers thereof.

Of course, further input computing devices may be utilized in conjunction or in lieu devices 520 and 530, for submitting cheque/cheques to computer 510 for validation, such as point of sale computing device.

Central computer 510 is also configured to communicate with other computers 540 and 550, which are employed as further financial information resources, such as banking entities servers and servers of other business information resources (e.g., credit rating bodies such as BDI ^® ) holding information related to financial accountability related to issuers of submitted cheques validated by system 500.

According to an embodiment of the invention, further predetermined parameters are being considered by system 500 in addition to the transaction allow/decline recommendation described in Figs. 1-4, such as:

- The total number of cheques in a single cheques transaction (e.g., considering that higher number of issued cheques holds a higher risk);

- Cheques issuer's profile related characteristics such as seniority (e.g., considering that cheques issuers of younger age / new businesses holds a higher risk with respect to senior ones); - Successful / default cheques transactions along the past 6 months (e.g., considering that higher defaults count / unpayable cheques holds a higher risk), whereas sufficient historical transactions data has accumulated;

- The total cheques amount in an inspected transaction, relative to the determined obligo (i.e., predetermined total amount of financial commitment for the specific cheques issuers) thereof (e.g. considering that higher cheques amount-to-obligo ratio holds a higher risk, namely, larger portion of the granted credit is exercised);

- The number of and/or amount previously issued cheques that will be cashed after the issuance and before the cashing of the inspected cheques (e.g., considering that higher outstanding obligations holds a higher payability risk to the inspected transaction);

- The transaction duration, namely, the period between the cheques issuance to the last cheque in the transaction is cashed (e.g., considering that longer transaction duration holds a higher payability risk, at least to some of the cheques);

- The number of completed transaction (i.e., approved transactions by system 500 whether the approved cheques were cashed or not) of the same issuer (e.g., considering that higher number of approved transactions reduces the risk of a newly inspected transaction);

- The time since the first transaction of the same issuer approved by system 500 (e.g., considering that longer period reduces the risk);

- The ratio between the highest cheque amount of the inspected transaction to the highest cheque amount of a previously cashed cheque of the same issuer (e.g., considering that a higher ratio holds a higher risk);

- The difference between the number of cheques issued in the inspected transaction, to the highest number of cheques issued in past transactions (e.g., considering that a higher difference, regardless of which number is higher, holds a higher risk to the inspected transaction);

- Negative indications related to past transactions - this is a binary parameter that returns a positive (e.g., "1" value) for any occurrence of a negative event such as a past defaults (i.e., unpayable cheques), any bank account of the cheques issuer was blocked in the past. - Location data related to the cheques submission location, to the cheques issuer's address, or to the associated bank address.

According to an embodiment of the invention, system 500 considers the transaction's allow/decline recommendation of the validation process of Figs. 1-4 together with the abovementioned parameters, while designating each of which predetermined base scores and scaling their input data (e.g., issuer's age in years, number of cheques in the transaction, etc.) for calculating a final validation score, which reflects each parameter's significance to the cheque's/cheques' payability chances. The significance and corresponding base scores/scales are preconfigured in software 511 (e.g., initially by arbitrary professional considerations followed by statistical analysis of accumulated transactions data).

The validation score may be differently calculated for new cheques issuers versus existing cheques issuers, such as to consider the payability risk being differently affected by the abovementioned parameters - when validating cheques transactions of an existing cheque issuer, for whom historical cheques transaction information is accumulated and stored by system 500, or when validating cheques transactions of a new cheque issuer.

For example, when validating cheques transaction of a new cheque issuer, system 500 may consider some or all of the abovementioned parameters (e.g., the cheques issuer seniority, the total number of cheques and the transaction's total cheques amount relative to the determined obligo thereof) with greater significance (e.g., by increased base scores) , whereas the score is calculated for a cheque transaction of an existing cheque issuer, different parameters (e.g., allow/decline recommendation generated by financial validation 103, the time since the first transaction of the same issuer, and the cheques issuer seniority) are considered with a higher significance.

The following Table 1 illustrates score calculations for exemplary transactions validated, according to an embodiment of the invention:

Table 1

The basic score calculation sums the multiplication of each parameters' base score with the scaled input value.

For example, case 1 represent a new issuer, who is 50 years old (i.e., scaled 1 for the seniority parameter), who's financial validation recommendation is "Decline" (i.e., scaled as 0), and who issued 2 cheques in the validated transaction (i.e., scaled as 0.6), total amount of which is 60% from the designated obligo the transaction (scaled as 1). The total resulting score for case 1 is 757, where the score of a significantly less senior new issuer (case 2) is 416.

The final score can be compared to predetermined score ranges and corresponding final recommendation configured in software 511, for example:

Score of 0-600 - transaction to be declined;

Score of 600-800 - transaction to be further considered (e.g., considering further parameters such as business area, further guaranties, etc.); and Score of 800 and above - transaction allowed.

Of course, any cheques receiving user of software 511 may suitably determine suitable base scores, scales, considered parameters and significance thereof.

According to an embodiment of the invention, system 500 collects mass data related to allow/decline recommendation history generated by system 500 in past cheques transactions validations, and the final outcome of those cheques transactions (i.e., whether the allowed cheques were payable), thereby to continuously evaluate the actual significance of each of the predetermined parameters mentioned above to the cheques payability. Accordingly system 500 updates its validation parameters, base scores and scales thereof in the score calculation, so as to continuously improve its validation accuracy, and thereby, its generated allow/decline recommendations and scoring, based on continuously accumulated transaction history date.

Although embodiments of the invention have been described by way of illustration, it will be understood that the invention may be carried out with many variations, modifications, and adaptations, without exceeding the scope of the claims.