Electronic Check Data Transaction System
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Solution Overview
Problem
The existing system of monetary transactions using physical checks is prone to fraud, inconvenient, costly, and time-consuming due to the need for physical document exchange and verification, which can lead to delays and losses.
Innovation Solution
A system and method for managing financial transactions using electronic check data, where a payor registers with a third-party service, supplies bank account information, and initiates a check-type payment request, which is verified and transmitted to a payee, allowing for secure, remote, and efficient deposit processing.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If physical checks are used for monetary transactions, then the payee can receive payment, but the system is susceptible to fraud and requires physical document exchange which is costly and time-consuming
Solution Approach 1:
The patent replaces the mechanical system of physical check exchange with an electronic data transmission system. Electronic check data is transmitted through a network, eliminating the need for physical document handling, transportation, and manual processing, thereby reducing both time and cost while maintaining security through cryptographic verification
Solution Approach 2:
The patent creates and transmits electronic copies of check data instead of physical checks. The electronic check data includes all necessary information (payor account, payee account, amount, authorization) in a digital format that can be verified cryptographically, replacing the need for physical document exchange while preventing fraud through digital security measures
2Productivity
If physical checks are used for monetary transactions, then the payee can receive payment, but the system requires transportation and processing of large volumes of physical documents which adds cost and time delays
Solution Approach 1:
The patent replaces the mechanical system of physical check transportation and processing with electronic data transmission. The electronic check data system eliminates costs associated with paper, printing, postage, handling, and manual processing, while dramatically increasing transaction speed through automated electronic verification and fund transfer
Solution Approach 2:
The patent implements automated verification and processing systems that eliminate the need for manual intervention. The electronic check data system automatically verifies authorization, validates account information, and processes fund transfers without requiring physical document handling or manual review, thereby reducing both cost and time
3Ease of operation
If remote deposit capture is used, then the payee can deposit checks remotely without traveling to a bank, but the system still requires physical check imaging and transmission which may be susceptible to tampering
Solution Approach 1:
The patent replaces the imaging and transmission process with direct electronic data transmission. Instead of scanning physical checks and transmitting images, the system transmits structured electronic check data that includes embedded cryptographic verification, eliminating the vulnerability of image-based systems to tampering while maintaining remote deposit convenience
Solution Approach 2:
The patent introduces cryptographic verification as an intermediary layer between the payor and payee. The electronic check data includes digital signatures and verification codes that act as a trusted mediator, ensuring data integrity and preventing tampering without requiring physical document verification
Data Source
AI summary
A system and method of transmitting a check-type payment between a payor and a payee using a third-party service includes registering a payor, receiving a check-type payment request from the payor by the third-party service, generating a unique identifier for the check-type payment request and associating payment information with the unique identifier, transmitting a payment notice to the payee, receiving a deposit request to a deposit account from the payee by the third-party, generating a depositable item responsive to the deposit request, and depositing the depositable item into the deposit account by the third-party service.