Blockchain Real-Time Settlement Interception

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Solution Overview

Problem

Traditional card-based payment systems rely on deferred net settlement, leading to idle currency, settlement risks, and collateral requirements, which hinder real-time financial institution settlements without increasing network traffic and costs.

Innovation Solution

Implementing a blockchain network for real-time settlement by intercepting response messages, identifying involved financial institution addresses, and conducting blockchain transactions to confirm and modify settlement messages, thereby reducing the need for additional messaging on traditional payment networks and minimizing institutional risks.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Loss of energy

If deferred net settlement is used to reduce network traffic and settlement costs, then network traffic and costs are reduced, but settlement occurs in real-time and financial institution risks are increased

Engineering Contradiction:

Improvenetwork traffic and settlement costsVSAvoidsettlement risk

Core Design Contradiction:

Loss of energyVSReliability

Solution Approach 1:

The patent introduces a blockchain network as an intermediary settlement layer between traditional payment networks and financial institutions. The blockchain acts as a mediator that enables real-time settlement while maintaining compatibility with existing deferred net settlement infrastructure, thus reducing risks without significantly increasing network traffic on traditional payment networks.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The patent adds a new dimensional layer (blockchain network) alongside the traditional payment network infrastructure. Instead of modifying the existing deferred net settlement system, it creates a parallel real-time settlement dimension that operates concurrently, allowing institutions to choose real-time settlement when needed while maintaining the efficiency of deferred settlement for other transactions.

Inventive Principle:

Principle #17Another dimension (Dimensionality change)

2Reliability

If real-time settlement is implemented to reduce financial institution risks, then settlement risk is reduced, but network traffic and messaging volume increase

Engineering Contradiction:

Improvesettlement riskVSAvoidnetwork traffic and messaging volume

Core Design Contradiction:

ReliabilityVSQuantity of substance

Solution Approach 1:

The blockchain network serves as an intermediary that handles real-time settlement messaging separately from traditional payment networks. By routing real-time settlement communications through the blockchain infrastructure rather than overloading traditional payment networks, the system reduces risks while minimizing the impact on network traffic volume.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The patent segments settlement operations into two distinct channels: deferred net settlement through traditional payment networks and real-time settlement through the blockchain network. This segmentation allows real-time settlement to occur without significantly increasing overall network traffic, as each channel handles its designated transaction types independently.

Inventive Principle:

Principle #1Segmentation

3Adaptability or versatility

If financial institutions maintain accounts for all possible settlements and currencies, then settlement coverage is improved, but wealth sits idle and cannot be used or invested

Engineering Contradiction:

Improvesettlement coverageVSAvoididle wealth

Core Design Contradiction:

Adaptability or versatilityVSLoss of energy

Solution Approach 1:

The blockchain network provides a universal settlement layer that can handle multiple currencies and settlement types through a single interface. Financial institutions only need to maintain their blockchain wallet addresses rather than separate accounts for each currency and settlement scenario, enabling real-time settlement across different currencies while keeping funds liquid and investable.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Solution Approach 2:

The patent changes the fundamental parameter of how settlement accounts are maintained - from traditional bank accounts that require idle balances to blockchain wallets that use cryptographic addresses. This parameter change allows institutions to maintain minimal settlement credentials while keeping the majority of their wealth liquid and available for investment, as blockchain transactions only require the specific amounts needed for each transaction.

Inventive Principle:

Principle #35Parameter changes

Data Source

PatentUS11763300B2Method and system for currency-agnostic real-time settlement

Publication Date: 2023.09.19 MASTERCARD INT INC

AI summary

A method for real-time settlement of financial institutions for a standard electronic payment transaction using a blockchain network includes: receiving a response message for a financial transaction from an issuing institution via payment rails including a transaction amount, issuer identifier, and acquirer identifier; identifying a public key using the acquirer identifier and a private key using the issuer identifier; generating a destination address using the public key and a digital signature using the private key; transmitting a blockchain transaction request to a node in a blockchain network using an alternative communication network including the destination address, digital signature, and transaction amount; receiving a confirmation message from the node including a transaction hash value; modifying the response message to include the transaction hash value; and transmitting the modified response message to an acquiring institution using the payment rails.