Distributed Commerce System Reducing Payment Processor Complexity

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Solution Overview

Problem

Current payment systems face challenges in remote transactions, particularly in online and wireless commerce, due to limitations in existing payment processors, high costs for merchants and credit issuers, and security risks associated with data distribution in hub-centric models.

Innovation Solution

A distributed system for commerce that includes a merchant system, an intermediate server system, and a payment processor system, facilitating credit-based or debit-based transactions while providing secure communication and dynamic content delivery, thereby reducing reliance on traditional payment processors and enhancing security.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Ease of operation

If a traditional payment processor system is used to mediate transactions between merchants and credit issuers, then transaction authorization and settlement can be facilitated, but the system complexity increases and costs rise for both merchants and credit issuers

Engineering Contradiction:

Improvetransaction facilitationVSAvoidsystem complexity

Core Design Contradiction:

Ease of operationVSDevice complexity

Solution Approach 1:

The patent extracts the payment mediation function from the traditional payment processor and relocates it to the merchant's own server system. The merchant server directly communicates with credit issuers to obtain authorization and process transactions, eliminating the need for intermediary payment processors and reducing system complexity.

Inventive Principle:

Principle #2Taking out (Extraction)

Solution Approach 2:

The patent uses the merchant server as a new intermediary between the customer and credit issuer, replacing the traditional payment processor. The merchant server handles authorization requests, communicates with credit issuers, and manages transaction settlement, thereby simplifying the overall system architecture.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Adaptability or versatility

If merchants connect their payment systems directly to multiple credit issuers, then payment options can be expanded, but implementation and maintenance costs increase significantly

Engineering Contradiction:

Improvepayment option varietyVSAvoidimplementation cost

Core Design Contradiction:

Adaptability or versatilityVSEase of manufacture

Solution Approach 1:

The merchant server is designed with multi-functional capabilities to handle various credit card types, authorization protocols, and settlement processes from multiple credit issuers through a single unified system, eliminating the need for separate integration for each credit provider.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Solution Approach 2:

The system employs dynamic configuration capabilities that allow merchants to easily add, remove, or modify credit issuer connections without requiring significant system changes. The merchant server can adapt to different credit issuer requirements and update processing rules dynamically.

Inventive Principle:

Principle #15Dynamics

3Productivity

If credit request data is centralized at the payment processor hub, then transaction processing can be coordinated, but security risks increase due to data concentration

Engineering Contradiction:

Improvetransaction processing efficiencyVSAvoiddata security risk

Core Design Contradiction:

ProductivityVSObject-affected harmful factors

Solution Approach 1:

The patent segments the centralized data storage model into a distributed architecture where customer credit request data is processed and transmitted directly between the merchant server and credit issuers. Data is not concentrated at a single hub but distributed across multiple secure endpoints, reducing the security risk associated with data concentration.

Inventive Principle:

Principle #1Segmentation

4Ease of manufacture

If merchants use existing payment processor infrastructure, then initial setup costs are reduced, but the ability to implement new payment products is limited by processor specifications

Engineering Contradiction:

Improveinitial setup costVSAvoidnew payment product implementation

Core Design Contradiction:

Ease of manufactureVSAdaptability or versatility

Solution Approach 1:

The merchant server is pre-configured with the necessary software and protocols to directly communicate with multiple credit issuers before transactions begin. This preliminary setup includes pre-established authorization channels and settlement pathways, enabling merchants to implement new payment products quickly without relying on processor approval or configuration changes.

Inventive Principle:

Principle #10Preliminary action

Data Source

PatentUS10580070B2Distributed system for commerce

Publication Date: 2020.03.03 PAYPAL INC

AI summary

A distributed system for commerce including a merchant system with a communication system for receiving, processing and transmitting data. The system further includes an intermediate server system in communication with the merchant system, and this intermediate server system includes a data storage system for storing data transmitted thereto, as well as a communication system for receiving, processing and transmitting data.