System and method for assigning an initial transaction fee tier to a vendor in a payment system with a variable transaction fee

Abstract

A system for making payments from each payer of a community of payers to each vendor of a community of vendors assesses a variable transaction fee to each vendor. The system comprises a database which associates, for each payer, identification a selected rate tier assigned to each vendor. A rate tier assignment application determines an initial rate tier to assign to a vendor by: i) determining an industry sensitivity score, the industry sensitivity score being representative of how sensitive a typical vendor in the same type of business as the vendor is to payment of transaction fees; ii) determining a payer centric spend score; iii) determining a payer centric frequency score; iv) determining a network spend score; and iv) determining a network frequency score. These scores are used to determine an initial rate tier to associate with the vendor. A payment application, when making payment from the payer to the vendor, determines a transaction fee to apply to the payment, the transaction fee being a product of the amount of the payment and the transaction rate associated with the selected rate tier.

What is claimed is: 
     
         1 . A system for making payments from a payer of a group of payers to a vendor of a group of vendors and assessing a transaction fee to the vendor, the system comprising:
 a non-volatile computer readable media comprising:
 an industry sensitivity score database identifying, for multiple industries, a score value assigned to each industry, the score value representative of a transaction fee percentage indicative of historical fee rates that have been accepted by participants in the industry; and 
   a processor configured to execute a payment from a selected payer to a selected vendor by:
 determining an industry sensitivity score and selected transaction fee percentage to assign to the selected vendor by looking up in the industry sensitivity score database the score value and transaction fee percentage assigned to the industry in which the vendor participates; 
 determining a transaction fee to apply to the payment, wherein the transaction fee is a product of a payment amount multiplied by the selected transaction fee percentage associated with the selected vendor; and 
 initiating payment, to an account of the selected vendor, a net amount equal to the payment amount less the transaction fee. 
   
     
     
         2 . The system of  claim 1 , wherein the industry sensitivity score database includes historical transaction fee rates for other vendors grouped by industry and the score value for a given industry is determined by mapping the historical transaction fee rates for the given industry to a score value. 
     
     
         3 . The system of  claim 1 , wherein:
 the non-volatile computer readable media further comprises an industry code database, the industry code database associating each of a group of industries with an industry code; and   determining an industry sensitivity score and selected transaction fee percentage to assign to the selected vendor by looking up in the industry sensitivity score database the score value and transaction fee percentage assigned to the industry in which the vendor participates comprises:
 obtaining the selected vendor's industry code, which identifies the industry in which the selected vendor participates, from the industry code database; and 
 looking up the score value and transaction fee percentage, in the industry sensitivity score database, associated with the vendor's industry code. 
   
     
     
         4 . A system for making payments from a payer of a group of payers to a vendor of a group of vendors and assessing a transaction fee to the vendor, the system comprising:
 a non-volatile computer readable media comprising:
 an industry sensitivity score database identifying, for multiple industries, a score value assigned to each industry, the score value representative of historical fee rates that have been accepted by participants in the industry; and 
 a rate tier database identifying a transaction fee percentage applicable to each rate tier of a group of rate tiers; and 
   a processor configured to execute a payment from a selected payer to a selected vendor by:
 determining an industry sensitivity score to assign to the selected vendor by looking up in the industry sensitivity score database the score value assigned to the industry in which the selected vendor participates; 
 mapping the industry sensitivity score for the vendor to a selected rate tier, wherein the selected rate tier is one of the group of rate tiers; 
 determining a selected transaction fee percentage associated with the selected rate tier associated with the selected vendor by looking up in the rate tier database the transaction fee assigned to the selected rate tier; 
 determining a transaction fee to apply to the payment, wherein the transaction fee is a product of a payment amount multiplied by the selected transaction fee percentage associated with the selected vendor; and 
 initiating payment, to an account of the selected vendor, a net amount equal to the payment amount less the transaction fee. 
   
     
     
         5 . The system of  claim 4 , wherein the industry sensitivity score database includes historical transaction fee rates for other vendors grouped by industry and the score value for a given industry is determined by mapping the historical transaction fee rates for the given industry to a score value. 
     
     
         6 . The system of  claim 4 , wherein:
 the non-volatile computer readable media further comprises an industry code database, the industry code database associating each of a group of industries with an industry code; and   determining the industry sensitivity score to assign to the selected vendor by looking up in the industry sensitivity score database the score value assigned to the industry in which the selected vendor participates comprises:
 obtaining the selected vendor's industry code, which identifies the industry in which the selected vendor participates, from the industry code database; and 
 looking up the score value, in the industry sensitivity score database, associated with the vendor's industry code.