Commingled Account Cash Transfer System for Unbanked Recipients
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Solution Overview
Problem
Existing methods for international cash transfers, such as bank-to-bank transfers and Western Union models, are inadequate as they require bank accounts for recipients, which many individuals in regions like Central and South America, and Asia do not have, and often necessitate in-person transactions for senders.
Innovation Solution
A method and system allowing a bank customer in one country to send cash in the local currency to a recipient in another country through a commingled account and a payment agent, using affiliated banks and payment agents to facilitate the transfer without requiring the recipient to have a bank account, and enabling cash delivery or pickup.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If bank-to-bank transfer model is used, then transfer reliability is improved, but accessibility deteriorates because recipients must have bank accounts
Solution Approach 1:
The patent introduces a payment agent as an intermediary between the banking system and the recipient. The payment agent receives funds from the sending bank and disburses cash to recipients who do not have bank accounts. This intermediary enables the system to serve unbanked populations while maintaining the reliability of bank-to-bank transfers for the financial institution side of the transaction.
2Adaptability or versatility
If Western Union model with payment agents is used, then accessibility is improved, but operational complexity worsens due to in-person transaction requirements
Solution Approach 1:
The patent segments the money transfer process into distinct functional components: the sending bank handles fund collection and remittance, the payment agent handles cash disbursement and recipient verification, and the receiving bank's commingled account handles fund holding. This segmentation allows each entity to specialize in specific tasks, reducing the operational burden on any single party and enabling senders to use convenient bank channels while recipients can access cash at agent locations.
3Loss of energy
If affiliated banks with commingled accounts are used, then transaction costs are reduced, but system complexity increases
Solution Approach 1:
The patent merges the functions of the receiving bank and payment agent through a commingled account structure. The receiving bank maintains a commingled account that holds funds from multiple senders, and the payment agent is authorized to access and disburse from this account. This merging eliminates the need for separate fund transfers to each payment agent, reducing transaction costs while the affiliation relationship between banks provides a familiar and manageable structure for the complexity.
Data Source
AI summary
A bank customer of a first bank in a first country has a bank account. The bank provides a banking service whereby customer is able to send cash to a recipient in a second country via a commingled bank account belonging to a second bank. The cash is provided to the recipient in the currency of the second country by a third party payment agent. To effect a transfer, the bank customer in the first country instructs the first bank to debit his or her account and send cash to a designated recipient. In response, the first bank debits the customer's account, sends first payment instructions to the second bank, and transfers funds to a commingled account at the second bank. Funds from this commingled account are used to pay for the cash provided to the recipient. The banking service may be provided free of charge to a banking customer of the first bank.