Electronic Transaction Settlement via Intermediary
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Solution Overview
Problem
Customers face risks of card loss or unauthorized access when using credit or debit cards for transactions, especially in situations where physical possession is not possible, such as dining, due to the need to carry multiple cards and potential for card information to be copied.
Innovation Solution
A method for electronic transaction settlement that involves a customer providing an account identifier and contact information to a merchant, which then contacts a settlement house to facilitate transactions via mobile communication devices, allowing selection of payment methods and authorization through a settlement house that interacts with credit or debit card providers without revealing card information to the merchant.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If customers use credit or debit cards for transactions, then payment convenience is improved, but security risk increases due to potential card loss or unauthorized access
Solution Approach 1:
The patent introduces a settlement house as an intermediary between the customer, merchant, and card provider. The settlement house handles card verification and authorization without the merchant ever seeing or storing the actual card number, thus maintaining payment convenience while eliminating the security risk of card information exposure
Solution Approach 2:
The patent extracts the sensitive card information handling from the merchant's system entirely. The card number is never transmitted to or stored by the merchant; instead, only a verification result from the settlement house is returned, removing the security vulnerability while preserving transaction functionality
2Loss of time
If merchants store card information for future transactions, then transaction speed is improved, but security vulnerability increases
Solution Approach 1:
The settlement house serves as a trusted intermediary that stores and manages card information securely. Merchants can reference previously authorized cards through the settlement house without storing sensitive data themselves, achieving fast repeat transactions while maintaining security through centralized, protected storage
3Adaptability or versatility
If customers carry multiple physical cards, then payment versatility is improved, but risk of loss or theft increases
Solution Approach 1:
The patent replaces physical card copies with a single digital representation stored securely by the settlement house. Customers can use multiple card accounts through one device or system without carrying multiple physical cards, maintaining payment versatility while eliminating the risk of losing or having physical cards stolen
Data Source
AI summary
A method for electronic transaction settlement includes a customer providing an account identifier and contact information to a merchant, the merchant contacting a settlement house and transmitting the account identifier and a transaction amount, the settlement house contacting the customer, preferably via a mobile communication device. The customer then chooses a payment method such as a credit card and the settlement house contacts a credit provider for authorization. If the settlement house receives an authorization, the settlement house transmits it to the client, who approves the amount. The settlement house then completes the transaction with the credit provider and the merchant's bank.