Electronic Wallet Intermediary for Secure Payment Processing
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Solution Overview
Problem
Current methods for online transactions, such as credit cards, debit cards, and electronic fund transfers, face security issues and limitations, including fraud risks, lack of real-time verification, and inconvenience in funding intermediaries, making consumers reluctant to use these methods for online purchases.
Innovation Solution
A system and method that allows users to direct-debit their financial institution account to a stored-value financial instrument, enabling secure transactions over a network by receiving a dollar amount, selecting a non-integrated financial institution, and participating in a user-free electronic dialogue to transfer funds, facilitating both online and offline transactions without requiring sensitive information from the user.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If credit card information is provided for online transactions, then payment can be processed, but security risks increase due to fraud and misappropriation of card information
Solution Approach 1:
The patent introduces an intermediary account (electronic wallet) between the consumer's financial institution account and the merchant. The consumer deposits funds into this intermediary account, which then holds the information needed to complete transactions. This intermediary layer prevents direct exposure of financial institution account information to merchants, thereby reducing security risks while maintaining ease of payment processing
2Productivity
If debit card information is provided for online transactions, then funds can be debited directly, but security risks increase due to direct access to consumer funds and inability to reverse transactions
Solution Approach 1:
The electronic wallet acts as an intermediary that receives funds from the consumer's financial institution account and then dispenses them to merchants. This intermediary structure allows fast transaction processing (similar to debit cards) while adding security layers: the consumer controls the intermediary account, can monitor transactions, and has the ability to reverse transactions by controlling the intermediary account, unlike direct debit card transactions
3Reliability
If intermediate account systems are used for fund transfers, then security is improved by not sharing financial information with merchants, but convenience deteriorates due to constant monitoring and manual funding requirements
Solution Approach 1:
The patent implements automatic funding mechanisms where the system monitors the intermediary account balance and automatically transfers additional funds from the consumer's financial institution account when the balance is insufficient. This self-service automation eliminates the need for manual monitoring and funding by the consumer, while maintaining the security benefits of the intermediary account structure
4Reliability
If fund transfer accounts are used for online purchases, then security is improved by using intermediate accounts, but versatility is limited by merchant acceptance restrictions
Solution Approach 1:
The electronic wallet intermediary account is designed to be universally accepted by multiple merchants. Instead of requiring separate arrangements with each merchant, the intermediary account system provides a standardized interface that can be used across different merchants and transaction types, enhancing versatility while maintaining security through the intermediary structure
Data Source
AI summary
A device, system, and method for conducting a secure transaction over a network includes receiving from a merchant a price amount associated with a purchase selection made by a user and an identification of a stored-value financial instrument having been issued to the user, and participating in a user-free electronic dialogue with a non-integrated financial institution, the user-free electronic dialogue including a request to transfer funds from the non-integrated financial institution to satisfy the price amount associated with the purchase selection. The device, system, and method further includes determining whether there are sufficient funds associated with the stored-value financial instrument. The participation in the user-free electronic dialogue to request the funds transfer from the non-integrated financial institution occurs as a result of determining that there are insufficient funds.