Importance

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Abstract

A system and method for issuing and clearing traveler's checks that are paid for by credit card. A quantity of traveler's checks having a total value are sold to a buyer. An account identifier is received from the buyer. A lock is placed against the identified account for a lock value of at least a portion of the total value. Preferably, the identified account is a credit card account. The lock value and the credit card account number are communicated to a credit card clearing house and an authorization that a lock equal to the lock value has been placed against the credit card account is then received from the credit card clearing house. Information identifying the credit card account of the buyer of each traveler's check that is sold is communicated to the traveler's check issuer, which stores the information in a database. When the buyer cashes a traveler's check, the traveler's check issuer obtains payment on the check. The identified account is debited while the lock on the account is reduced by a generally equal amount. A predetermined value based on the value of the cashed traveler's check is communicated to the credit card clearing house, which debits the account, reduces the lock and communicates a payment credit to the traveler's check issuer.

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