Blockchain ACH Authorization Validation
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Solution Overview
Problem
The manual and slow process of resolving disputes in Automated Clearing House (ACH) transactions due to each entity holding private authorization data, requiring manual communication between institutions.
Innovation Solution
Implementing a blockchain system to securely publish and validate ACH authorization data, allowing entities to access and verify transaction authorization in a self-service manner, using public-private key encryption and proof of work protocols to ensure data integrity and immutability.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If ACH authorization data is held privately by each entity, then data security is maintained, but dispute resolution becomes manual and slow
Solution Approach 1:
The patent introduces a blockchain network as an intermediary that stores copies of ACH authorization data. This mediator allows banks to independently verify authorizations without contacting the originating entity, resolving the contradiction by enabling efficient dispute resolution while maintaining data security through cryptographic verification rather than private data sharing
Solution Approach 2:
The patent creates distributed copies of ACH authorization data across multiple blockchain nodes. Each node stores an identical copy of the authorization records, allowing any bank to verify transaction legitimacy by querying the blockchain without accessing the originating entity's private systems, thus improving dispute resolution efficiency while preserving data security
2Loss of information
If manual communication is used between institutions for ACH disputes, then data privacy is preserved, but processing time increases
Solution Approach 1:
The patent enables banks to independently verify ACH authorization by directly querying the blockchain network. Each bank can self-service the dispute resolution process by retrieving and validating authorization data from the distributed ledger without requiring manual communication with the originating entity, thereby reducing processing time while maintaining data privacy through cryptographic verification
3Ease of operation
If ACH authorization data is publicly accessible, then self-service verification is enabled, but data integrity must be strongly protected
Solution Approach 1:
The patent replaces mechanical trust-based verification with cryptographic proof mechanisms. The blockchain uses hash functions, digital signatures, and consensus algorithms to provide mathematical guarantees of data integrity, allowing public self-service access while ensuring that authorization data cannot be tampered with or falsified
Solution Approach 2:
The patent implements a consensus mechanism where multiple blockchain nodes verify and validate ACH authorization data before adding it to the ledger. This feedback loop ensures that only legitimate, unaltered authorization records are stored and can be accessed by users, maintaining data integrity while enabling public self-service verification
Data Source
AI summary
Methods, systems, and apparatus, including computer programs encoded on a computer storage medium, for obtaining a distributed blockchain encoding automated clearing house (ACH) authorization data associated with one or more prior transactions to provide a local copy of the distributed blockchain, receiving ACH authorization data associated with a first transaction, validating the ACH authorization data associated with the first transaction to obtain validation information corresponding to the first ACH authorization data associated with the first transaction, updating the local copy of the distributed blockchain with the validation information, and broadcasting the validation information to multiple nodes.