Digital Check Disbursement via QR Code and Distributed Ledger
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Solution Overview
Problem
Conventional systems lack the capability to facilitate digital check endorsements in mobile applications for partial deposits into multiple accounts simultaneously and partial check transfers to merchants at point of sale, limiting convenience and functionality.
Innovation Solution
A computing platform that processes check images to generate digital checks with QR codes, enabling transactions between user devices and point of sale devices, with validation using distributed ledgers and digital chips, allowing partial or full fund transfers without depositing into the recipient's account, and supporting cancellation of transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If digital check processing is implemented in mobile applications, then client convenience is improved, but security parameters may be compromised compared to traditional methods
Solution Approach 1:
The digital check processing system is segmented into multiple independent security layers: device security credentials verification, digital signature validation, distributed ledger recording, and event processing server authorization. Each layer operates independently to provide comprehensive security while maintaining user convenience through automated validation.
Solution Approach 2:
The patent introduces multiple intermediary components to bridge security and convenience: the computing platform acts as an intermediary between the mobile device and banking system, the distributed ledger serves as an intermediary for transaction verification, and the event processing server acts as an intermediary for fund transfer authorization. These intermediaries enable secure processing without requiring users to directly interact with complex security protocols.
2Reliability
If traditional check deposit methods are used, then security is maintained, but functionality is limited requiring prior deposit before use of funds
Solution Approach 1:
The digital check processing system provides multi-functionality beyond traditional deposit: users can freeze checks pending verification, split funds to multiple accounts, transfer to third-party accounts, and use checks for peer-to-peer payments. The system universally handles various transaction types while maintaining security through the same validation framework, eliminating the limitation of requiring prior deposit before fund usage.
Solution Approach 2:
The patent implements dynamic transaction states that allow flexibility: checks can be in pending, frozen, or completed states. Users can freeze a digital check pending verification of authenticity, then later unfreeze and deposit it. The system dynamically adjusts security measures based on transaction stage, allowing functionality expansion while maintaining security adaptability.
3Ease of operation
If digital checks allow direct transfer to merchants without deposit, then convenience is improved, but risk of fraud increases
Solution Approach 1:
The system performs preliminary verification actions before enabling merchant transfer: the mobile device verifies device security credentials and validates the digital signature on the check image before allowing the transaction to proceed. The computing platform preliminarily processes the check image to extract account information and verify it against the distributed ledger. These preliminary actions ensure fraud prevention is built into the workflow before funds are transferred, maintaining convenience while reducing risk.
Solution Approach 2:
The patent implements feedback mechanisms at multiple stages: the distributed ledger provides feedback on account validity and balance, the event processing server provides feedback on transaction authorization, and the system provides user feedback on transaction status. This feedback loop enables real-time fraud detection and prevention, allowing the system to confirm transaction legitimacy before completing the transfer, thus reducing fraud risk while maintaining convenience.
Data Source
AI summary
Aspects of the disclosure relate to digital check processing. A computing platform may receive a check image from a user device. The computing platform may configure, based on the check image, a digital check for use in conducting transactions between the user device and point of sale devices, which may include generating a QR code for the check. The computing platform may send, to the user device, the digital check, which may enable the user device to execute a transaction with a first point of sale device. The computing platform may receive, from the first point of sale device, a request to execute the transaction. The computing platform may direct an event processing server to process the transaction, which may cause the event processing server to execute a transfer of funds from an account of the initial payor to an enterprise account of the first point of sale device.