Instant Check Verification via Predictive Scoring
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Current methods do not provide real-time visibility to merchants on the creditworthiness of customers using checks or standardized bills of exchange, leading to increased incidents of bounced checks and unpaid bills, as they lack a predictive assurance of payment incidents.
Innovation Solution
A method that uses a processing center connected to multiple banks via secure communication channels to provide merchants with real-time visibility on a customer's ability to honor commitments through a predictive scoring model, eliminating the need for PIN code exchange and offering a probability of payment incident occurrence.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If real-time verification of checks and standardized bills of exchange is implemented, then transaction security and visibility on creditworthiness are improved, but system complexity and communication infrastructure requirements increase
Solution Approach 1:
The patent introduces a verification system that acts as an intermediary between the merchant and the bank. This system receives check information, queries the bank's database through secure communication channels, and returns verification results. The intermediary structure simplifies the overall system by centralizing the verification logic and separating the merchant's operations from direct bank system access.
Solution Approach 2:
The patent replaces manual verification processes with automated electronic verification. Instead of physically examining checks or manually checking bank balances, the system uses electronic data transmission and automated database queries to verify transaction details in real-time, significantly reducing operational complexity while improving security.
2Loss of information
If real-time verification and predictive scoring are provided to merchants, then ability to make informed decisions is improved, but processing time and computational resources increase
Solution Approach 1:
The system performs preliminary actions by pre-calculating and storing customer creditworthiness scores and risk assessments in the bank's database before the actual transaction occurs. When a check is presented, the system queries pre-computed information rather than performing comprehensive analysis in real-time, significantly reducing processing time while maintaining accurate creditworthiness assessment.
Solution Approach 2:
The verification system implements partial verification by focusing on the most critical risk indicators and using predictive scoring models that weigh only the most significant factors. This selective verification approach provides sufficient information for merchants to make informed decisions without requiring complete analysis of all possible transaction parameters, thereby reducing processing time.
3Measurement precision
If predictive scoring models are used to assess payment incident probability, then accuracy of payment prediction is improved, but data processing complexity and model requirements increase
Solution Approach 1:
The patent transforms complex multi-dimensional data about customer transactions into simplified predictive scores through parameter changes. The system aggregates numerous transaction parameters into key risk indicators and converts them into a single predictive probability score, maintaining high prediction accuracy while dramatically reducing data processing complexity for the merchant.
Data Source
AI summary
The subject matter of the present invention is a management method for avoiding unpaid cheques and unpaid standard bills of exchange by enabling a vendor who receives a payment by one of these two payment methods to have real-time visibility of their customer's ability to honour their commitment. The invention makes it possible to manage the interaction between a vendor who receives a payment by a cheque or a standard bill of exchange and wishes to check the creditworthiness of their customer, and the drawee bank by means of a processing centre linked to a plurality of banks via secure communication channels. The method also provides vendors, during the commercial transaction, with additional reassurance in deciding whether or not to accept a means of payment from their customers, through the generation of a percentage probability of a payment incident, as a result of payment via a cheque or a standard bill of exchange, occurring, with this probability being calculated on the basis of a predictive scoring model.