Distributed Blockchain for Recurring Payment Account Updates

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Solution Overview

Problem

In distributed ledger systems, recurring transaction authorizations face challenges when account identifiers change, such as credit card number updates due to theft or expiration, leading to disruptions in transactions between merchants and customers.

Innovation Solution

A computer-implemented method and system that uses a distributed blockchain to track and update account identifiers by encoding and decoding authorization data with public and private keys, ensuring secure and collaborative record-keeping among parties, allowing for seamless transaction processing even with changes in account information.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Productivity

If a customer provides a merchant with an account identifier for recurring transactions, then the customer can conduct multiple transactions without separate authorization, but the system fails when the account identifier changes due to theft or expiration

Engineering Contradiction:

Improvetransaction processing efficiencyVSAvoidtransaction completion reliability

Core Design Contradiction:

ProductivityVSReliability

Solution Approach 1:

The system performs preliminary actions by proactively monitoring account identifier status before transactions fail. The financial institution detects account changes (revocations, expirations) in advance and automatically initiates updates to the distributed ledger, preventing transaction disruptions rather than reacting after failures occur.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system implements continuous feedback loops where the financial institution monitors account identifier validity status and automatically communicates changes to merchants via the distributed ledger. This real-time feedback mechanism ensures merchants always have valid account information without manual intervention, resolving the contradiction between automated recurring transactions and account changes.

Inventive Principle:

Principle #23Feedback

2Reliability

If the financial institution manually notifies merchants of account identifier changes, then transaction reliability can be maintained, but significant network and computational resources are consumed

Engineering Contradiction:

Improvetransaction continuityVSAvoidnetwork and computational resource consumption

Core Design Contradiction:

ReliabilityVSUse of energy by moving object

Solution Approach 1:

The distributed ledger acts as an intermediary between the financial institution and merchants. Instead of direct communication requiring significant network resources, account identifier changes are recorded on the distributed ledger, which automatically propagates updates to all participating merchants. This intermediary mechanism reduces direct communication overhead while ensuring reliable transaction continuity.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The system enables self-service by allowing merchants to automatically retrieve and update account identifier information from the distributed ledger without requiring manual notifications from the financial institution. Merchants query the ledger themselves for current account information, eliminating the need for resource-intensive active notification systems while maintaining transaction reliability.

Inventive Principle:

Principle #25Self-service

3Speed

If merchants store account identifiers locally for recurring transactions, then transaction speed is improved, but the system cannot adapt when account identifiers change

Engineering Contradiction:

Improvetransaction processing speedVSAvoidadaptability to account changes

Core Design Contradiction:

SpeedVSAdaptability or versatility

Solution Approach 1:

The system transitions from static local storage to dynamic distributed ledger storage. Account identifiers are no longer fixed in merchant systems but dynamically updated through the distributed ledger. This dynamic approach allows merchants to maintain fast transaction processing by querying the ledger for current information while automatically adapting to account identifier changes without manual intervention.

Inventive Principle:

Principle #15Dynamics

Solution Approach 2:

The distributed ledger serves multiple functions simultaneously: it acts as a storage mechanism for account identifiers, a communication channel for updates, and a verification system for transaction validity. This multi-functional approach enables merchants to maintain fast transactions while adapting to changes, as the single distributed ledger system provides both speed and adaptability that separate systems could not achieve.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Data Source

PatentUS11195177B1Distributed ledger systems for tracking recurring transaction authorizations

Publication Date: 2021.12.07 UNITED SERVICES AUTOMOBILE ASSOCIATION (USAA)

AI summary

In an example computer-implemented method executed by at least one processor, a first notification is received at a first computing system in a distributed computing network from a second computing system in the distributed computing network. The first notification identifies a first block in a distributed blockchain. The first block encodes authorization data describing a recurring payment authorization between a user and a merchant. The authorization data includes an account identifier associated with an account held by the user, and an identity of the merchant. The first block is obtained by the first computing system from the distributed computing network. The first block is decoded by the first computing system to determine an association between the user, the account, and the merchant.