Electronic Check Data Transmission System
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Solution Overview
Problem
Conventional financial transaction methods, such as paper checks and credit/debit cards, are slow, expensive, insecure, and inconvenient, often requiring specialized equipment and high transaction fees, which can deter merchants from accepting these forms of payment.
Innovation Solution
A method and system for executing electronic financial transactions by generating and authorizing a transaction record, allowing parties to electronically transmit data records representative of financial transactions, which can be converted into physical or electronic checks compliant with Check 21 standards, enabling secure, efficient, and cost-effective transactions over public networks like the internet.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If paper checks are used for physical payments, then security against theft is improved, but transaction speed and convenience deteriorate
Solution Approach 1:
The patent replaces the mechanical system of physical check handling (printing, mailing, manual processing) with an electronic data transmission system. Check data is transmitted electronically between parties and processed through automated clearinghouse systems, eliminating the need for physical transportation and manual handling while maintaining security through electronic verification and authorization protocols.
Solution Approach 2:
The patent creates electronic copies of check data that can be transmitted and processed without requiring the original physical check to move through the entire clearance process. The electronic representation contains all necessary information for clearance while eliminating the security risks and delays associated with physical check handling.
2Speed
If credit cards and debit cards are used for electronic transactions, then transaction speed is improved, but transaction costs and device complexity increase
Solution Approach 1:
The patent creates a universal check data transmission system that can be used for various types of financial transactions without requiring specialized credit card terminals or proprietary network equipment. The same electronic data transmission infrastructure supports different transaction types, making the system accessible to merchants without specialized equipment while maintaining fast electronic processing speeds.
3Reliability
If credit card processors are used for transactions, then transaction security is improved, but transaction fees and cost increase
Solution Approach 1:
The patent introduces an electronic check data transmission system as an intermediary between the payer and payee, replacing the need for expensive credit card processing intermediaries. The system uses standardized electronic data formats and automated clearinghouse protocols to securely transfer payment information, eliminating or reducing the need for costly third-party credit card processors while maintaining appropriate security measures.
Data Source
AI summary
A method of executing an electronic financial transaction involving two parties providing information for generating a transaction document and authorizing the document to execute the transaction. The method contemplates the maker electronically transmitting a data record representative of the financial transaction directly to a payee, such as by email. The payee can then convert the data record into a transaction acceptable to a bank of first deposit, such as by printing or imaging the data record into a form acceptable to the bank, such as a standard paper check.