Blockchain Smart Contract Automating Cross-Border Payments

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Solution Overview

Problem

Traditional transaction systems face challenges in establishing trust between international or cross-border transaction parties, leading to difficulties in ensuring payment transparency and reliability, which hinders financing options for sellers and increases transaction costs.

Innovation Solution

A blockchain-based system with trustable nodes, including a trading platform and financial institutions, uses smart contracts to automate payments based on predefined conditions, ensuring transparent and reliable transactions without the need for escrow accounts, thereby enhancing trust between parties.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If traditional escrow systems are used to ensure payment trust, then payment reliability is improved, but device complexity and loss of information increase due to requiring escrow accounts and manual verification processes

Engineering Contradiction:

Improvepayment reliabilityVSAvoidsystem complexity

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent replaces traditional mechanical escrow systems with blockchain-based smart contracts that automatically execute payment conditions. The smart contract system eliminates manual verification processes and escrow account requirements by using cryptographic verification and automated execution, thereby reducing system complexity while maintaining payment reliability.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Solution Approach 2:

The smart contract system enables self-service payment verification and execution. The buyer's financial institution automatically verifies payment conditions and executes transfers without requiring manual intervention from either party or third-party escrow systems, reducing operational complexity while ensuring reliable payment execution.

Inventive Principle:

Principle #25Self-service

2Ease of operation

If manual payment verification processes are used, then ease of operation is improved for simple transactions, but loss of time and productivity decrease due to repeated requests and delays in international transactions

Engineering Contradiction:

Improveoperation simplicityVSAvoidtransaction efficiency

Core Design Contradiction:

Ease of operationVSProductivity

Solution Approach 1:

The smart contract system ensures continuous automatic verification and execution of payment conditions without interruption. Once the contract is deployed, the system continuously monitors conditions and executes payments automatically, eliminating the discontinuous manual verification process and its associated delays in international transactions.

Inventive Principle:

Principle #20Continuity of useful action

Solution Approach 2:

The patent replaces manual payment verification with automated smart contract execution. The system automatically checks payment conditions, verifies transactions, and executes transfers without human intervention, thereby eliminating time losses and improving transaction efficiency while maintaining operational simplicity through automated processes.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

3Reliability

If escrow accounts are required for trustable transactions, then payment security is improved, but loss of information and device complexity increase due to additional verification steps and platform risks

Engineering Contradiction:

Improvepayment securityVSAvoidinformation loss

Core Design Contradiction:

ReliabilityVSLoss of information

Solution Approach 1:

The patent replaces traditional escrow account systems with blockchain-based smart contracts that provide payment security through cryptographic verification and immutable record-keeping. This substitution eliminates the need for additional verification steps and reduces information loss by directly verifying payment conditions without requiring intermediary escrow accounts.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Solution Approach 2:

The smart contract acts as an intermediary that automatically verifies payment conditions and executes transfers. This intermediary system provides payment security without requiring traditional escrow accounts, thereby reducing information loss and avoiding the risks associated with platform-held escrow funds while maintaining secure transaction execution.

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS11798050B2Managing blockchain-based trustable transaction services

Publication Date: 2023.10.24 ALIPAY (HANGZHOU) INFORMATION TECH CO LTD

AI summary

Disclosed herein are methods, systems, and apparatus, including computer programs encoded on computer storage media, for managing blockchain-based trustable transaction services. One of the methods includes: storing order data of an order between a buyer and a seller on a blockchain of a blockchain network, the order data including one or more payment conditions, verifying that the buyer has a trustable automatic payment service guaranteed by a buyer financial institution, generating a smart contract for the order based on the order data on the blockchain, and executing the smart contract to automatically instruct the buyer financial institution to make a payment of the order for the buyer to the seller according to the trustable automatic payment service in response to determining that a payment condition for the payment specified in the smart contract is met based on order status data uploaded to the blockchain.