Blockchain Credit Token Transaction Processing
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Solution Overview
Problem
The conventional payment card transaction process is overly complex and costly, with excessive fees and redundant validation, clearance, and settlement processes, which can be streamlined using blockchain technology to reduce intermediaries and enhance efficiency.
Innovation Solution
The implementation of blockchain-supported systems and methods for payment card transactions that utilize token-based payment cards, allowing for real-time validation, processing, and settlement without the need for traditional card networks, by using digital wallets and biometric authentication, and enabling the minting, storage, and exchange of credit tokens within a blockchain network.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional payment card networks are used, then transaction processing infrastructure is established, but system complexity and fees increase
Solution Approach 1:
The patent extracts the card network intermediary from the transaction process by implementing direct peer-to-peer token transfers between digital wallets. The blockchain ledger eliminates the need for Visa/Mastercard networks to authorize and clear transactions, removing their control and fee-collection mechanism while maintaining reliable transaction processing through cryptographic verification and distributed consensus.
Solution Approach 2:
The patent creates a universal payment system where tokens can be transferred directly between any two digital wallets regardless of the underlying banks or financial institutions. This multi-functional system handles authorization, clearing, and settlement in a single atomic operation, replacing the specialized multi-party infrastructure of traditional card networks with a general-purpose blockchain-based solution.
2Reliability
If multiple intermediaries are involved in payment processing, then transaction validation and clearance can be performed, but processing costs and fees increase
Solution Approach 1:
The patent merges the functions of authorization, clearing, and settlement into a single atomic transaction that executes directly on the blockchain. Instead of separate processing steps performed by different intermediaries (issuing bank, acquiring bank, card network), the system performs all validation and fund transfer operations in one unified block, eliminating redundant processing and intermediate fees.
Solution Approach 2:
The patent enables self-service transaction processing where the blockchain network automatically validates transactions, verifies balances, executes transfers, and maintains records without requiring human intervention or intermediary processing. The distributed ledger self-verifies transaction integrity through cryptographic proofs and consensus mechanisms, eliminating the need for costly intermediary services.
3Adaptability or versatility
If conventional payment card frameworks are used, then global adoption is achieved, but control and revenue concentration occur
Solution Approach 1:
The patent segments the centralized card network control into distributed blockchain nodes operated by various financial institutions and individuals. Instead of a single card network controlling all transactions, the system distributes verification and settlement authority across multiple independent participants, each maintaining their own digital wallet and transaction history on the shared ledger.
Solution Approach 2:
The patent inverts the traditional power dynamic by removing card network control from the transaction process. Instead of card networks authorizing and governing payments, the system allows direct peer-to-peer transactions validated by the blockchain. This inversion transfers control from centralized intermediaries to the end users and participating institutions.
Data Source
AI summary
Systems and methods are provided for processing credit token and debit token based transactions in a blockchain supported network.