Cryptocurrency Payment Processing for Underpayment and Late Payment Handling
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Solution Overview
Problem
Existing systems fail to address the unique challenges of cryptocurrency transactions, including control issues, volatility, finality, and exchange-rate-disparity, leading to underpayments, overpayments, and late payments, which hinder merchant adoption of cryptocurrency as a viable payment method.
Innovation Solution
A digital currency payment platform that enables recipients to make programmatic decisions based on logic and thresholds to automatically determine and address underpayments, overpayments, and late payments, and can generate modified transactions to ensure accurate payments.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If cryptocurrency transactions are made irreversible to prevent fraud, then security is improved, but the ability to correct payment errors is worsened
Solution Approach 1:
The system performs preliminary actions by establishing escrow arrangements and smart contracts before the transaction is finalized. The payment is held in escrow or automated smart contract until verification conditions are met, allowing correction of errors before the irreversible blockchain settlement occurs. This resolves the contradiction by enabling error correction mechanisms to operate in the pre-transaction phase while maintaining security through the irreversible blockchain settlement phase.
2Productivity
If cryptocurrency payments are processed instantly to improve transaction speed, then productivity is improved, but the ability to verify payment accuracy is worsened
Solution Approach 1:
The system introduces intermediary mechanisms including escrow services and automated verification systems that act as mediators between the instant cryptocurrency payment and the verification process. The escrow holds the payment temporarily while verification occurs, and automated systems continuously monitor blockchain confirmations to verify payment accuracy without requiring manual intervention. This enables instant payment processing while maintaining verification capability through automated intermediary systems.
3Stability of the object's composition
If cryptocurrency exchange rates are locked for a fixed period to reduce volatility risk, then stability is improved, but the acceptance of late payments is worsened
Solution Approach 1:
The system implements dynamic exchange rate locking mechanisms where the lock-in period and rate adjustment policies are flexible rather than fixed. The escrow arrangement can accommodate late payments by dynamically adjusting the exchange rate lock period or applying rate adjustments based on current market conditions. This allows the system to maintain stability through rate locking while adapting to late payment scenarios through dynamic policy adjustments.
4Measurement precision
If manual review processes are implemented to verify cryptocurrency payments, then measurement precision is improved, but loss of time is worsened
Solution Approach 1:
The system implements self-service verification through automated smart contracts and blockchain monitoring that automatically verify payment accuracy without requiring manual review. The smart contracts encode verification logic that automatically checks payment amounts, addresses, and confirmation status on the blockchain. This eliminates manual verification time while maintaining high precision through automated validation rules, resolving the contradiction between verification accuracy and time consumption.
Data Source
AI summary
As disclosed herein is a novel cryptocurrency payment platform and a method of use thereof. The cryptocurrency payment platform includes an application programming interface (API) that allows for the recipient of a cryptocurrency payment from a payor to be able to accept a payment that is different from the amount of cryptocurrency invoiced. The platform also provides the recipient the ability to make programmatic decisions whether to accept or refund cryptocurrency amounts and provide, via the API, the ability to then accept or refund the cryptocurrency. The cryptocurrency payment platform API further permits merchant to be made aware when a late payment has been made, become informed of the amount in fiat currency that the late payment is worth at that point in time, and provide the ability to accept or refund the cryptocurrency.