Controlled Payment Number Segmentation for B2B Reconciliation
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Current credit card systems for business-to-business transactions lack efficient mechanisms for matching purchase and payment information, leading to manual and costly reconciliation processes, and do not provide deferred payment scheduling or declining balance features.
Innovation Solution
The introduction of Controlled Payment Numbers (CPNs) that link purchase order information to a unique payment number, enabling automated matching of purchase and payment details, and allowing for deferred payment scheduling and declining balance transactions through a software platform that manages CPNs with defined user profiles and authorization controls.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of manufacture
If conventional credit card systems are used for business-to-business transactions, then payment processing is simple, but manual reconciliation of purchase and payment information is required leading to high back-office costs
Solution Approach 1:
The patent segments the payment identification into multiple hierarchical levels: the account number identifies the general account, while the discretionary sub-account number identifies specific cost centers, projects, or departments. This segmentation allows automated matching of payment information with specific purchase orders without manual intervention, resolving the contradiction between simple processing and efficient reconciliation.
Solution Approach 2:
The system performs preliminary action by requiring the merchant to include the discretionary sub-account number in the transaction data at the time of purchase. This pre-inclusion of reconciliation information eliminates the need for manual matching later, improving productivity while maintaining processing simplicity.
2Device complexity
If a single credit card number is used for multiple purchases, then card management is simple, but matching payment information to specific purchase orders becomes difficult
Solution Approach 1:
The payment card number is segmented into an account number portion and a discretionary sub-account number portion. This segmentation preserves the simplicity of card management (single card structure) while enabling detailed purchase order tracking through the sub-account component, preventing information loss.
Solution Approach 2:
The discretionary sub-account number serves multiple functions: it identifies cost centers, projects, departments, or any other organizational classification. This multi-functionality allows a single card number structure to handle diverse tracking requirements without increasing complexity.
3Measurement precision
If detailed purchase information is captured at the time of purchase, then reconciliation accuracy is improved, but the system complexity increases
Solution Approach 1:
The patent extracts the reconciliation function from the card number itself by incorporating the discretionary sub-account number directly into the payment identification. This extraction allows detailed purchase information tracking without requiring a complex external matching system, maintaining system simplicity while improving accuracy.
4Ease of operation
If credit card numbers are issued with fixed balances, then account management is straightforward, but deferred payment scheduling and declining balance features cannot be provided
Solution Approach 1:
The patent introduces dynamic characteristics to the account structure by allowing the discretionary sub-account to be associated with time-based parameters such as deferred payment schedules and declining balances. This dynamics enables flexible payment scheduling while maintaining straightforward account management through the hierarchical number structure.
Solution Approach 2:
The system allows parameter changes by associating different payment terms (immediate payment, deferred payment, declining balance) with different discretionary sub-accounts. This parameter flexibility provides adaptability for various payment scheduling needs while keeping the core account management simple.
Data Source
AI summary
Controlled Payment Numbers (CPNs) which issue as a unique payment number for each transaction uniquely identify the transaction for matching the purchase and payment information. The issuance of the CPN is controlled by business rules which are designed to and effectively restrict the use of the CPN, such that if a user exceeds his authorization, a CPN is not issued. The business rules are set up according to a hierarchy of users. Further, a declining balance CPN is also provided.