Blockchain Smart Contracts Automate 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
Engineering Contradiction Analysis
1Reliability
If traditional escrow systems are used to ensure payment transparency and reliability, then trust between transaction parties is improved, but transaction costs increase and device complexity increases due to requiring escrow accounts and manual verification processes
Solution Approach 1:
The patent replaces manual mechanical verification processes with blockchain-based automated smart contracts. The smart contract automatically executes payment transfers when predefined conditions are met, eliminating the need for manual escrow account management and repeated verification requests, thus reducing system complexity while maintaining payment reliability
Solution Approach 2:
The smart contract enables self-service automation where the system automatically verifies payment conditions and executes transfers without human intervention. The blockchain network autonomously maintains the ledger and ensures transaction integrity, reducing the need for complex manual oversight and escrow system infrastructure
2Productivity
If manual payment verification processes are used, then transaction simplicity is maintained, but payment efficiency decreases and time loss increases due to repeated requests and delays
Solution Approach 1:
The smart contract is deployed with predefined payment conditions and automatic execution logic before the transaction occurs. When conditions are met (such as goods delivery confirmation), the contract automatically executes the payment transfer without requiring subsequent manual verification requests, thereby eliminating time loss and improving payment efficiency
Solution Approach 2:
The blockchain network provides automatic feedback on payment status and condition fulfillment to all participants. The smart contract continuously monitors predefined conditions and triggers immediate payment execution when met, eliminating the need for repeated manual verification requests and significantly reducing verification time
3Reliability
If escrow accounts are required for trustable transactions, then payment security is improved, but ease of operation decreases as parties cannot use their own financial accounts
Solution Approach 1:
The patent extracts the trust function from centralized escrow accounts and relocates it to the blockchain-based smart contract system. This allows parties to use their own financial accounts while the smart contract provides the trust mechanism through automated condition fulfillment and transparent ledger recording, eliminating the need for separate escrow accounts
Solution Approach 2:
The blockchain network serves as a transparent intermediary that records all transactions and condition fulfillments immutably. The smart contract acts as an automated mediator that executes payments based on predefined conditions, providing security without requiring parties to open escrow accounts or sacrifice account flexibility
4Adaptability or versatility
If trade orders are not verified by financial institutions, then transaction simplicity is maintained, but financing capability decreases as sellers cannot obtain financing without trustable verification
Solution Approach 1:
The blockchain-based verification system serves multiple functions simultaneously: it verifies trade order authenticity, provides transparent payment tracking, enables automated execution, and creates trustable records that financial institutions can rely upon for financing decisions. This multi-functionality expands financing capability without requiring separate complex verification systems
Data Source
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 and data of a trustable undertaking (TU) service for the order, verifying that the buyer has the TU service for the order guaranteed by the 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 TU service for the order in response to determining that a payment condition for the payment specified in the smart contract is met.