Email-Based Digital Wallet for Secure ACH Transaction Processing
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Solution Overview
Problem
Existing electronic financial transaction systems face challenges in real-time surcharge calculation and secure payment processing, particularly with automated clearing house (ACH) transactions, which can be delayed and uncertain, and do not allow merchants to add fees to tips collected at restaurants after the consumer has left.
Innovation Solution
A system integrating an email-based digital wallet that enables real-time transaction processing and secure payment by registering a unique email address for electronic funds transfers, parsing transaction emails for immediate visibility, and using pre-authorization features to secure ACH transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If ACH transactions are used for electronic payments, then payment processing is possible with minimal physical interaction, but transaction finalization is delayed taking several days
Solution Approach 1:
The system performs pre-authorization of ACH transactions before the actual payment is finalized. This preliminary action ensures that funds are reserved and payment intent is confirmed immediately, while the actual ACH transfer can be scheduled later, thus reducing the perceived transaction time for the user while maintaining the batch-processing efficiency of ACH.
Solution Approach 2:
The patent introduces an intermediary processing layer between the payment initiation and ACH network settlement. This intermediary system (the processing server with pre-authorization module) sits between the consumer's payment request and the ACH network, enabling real-time validation and scheduling while the actual funds transfer occurs through the traditional ACH batch process.
2Productivity
If real-time transaction calculation is implemented using BIN and other data, then tips can be calculated in real-time on the customer's phone, but system complexity increases
Solution Approach 1:
The system extracts and pre-processes fee calculation logic from the complex ACH processing system. By using BIN (Bank Identification Number) data and other customer information, the system can independently calculate applicable fees in real-time on the consumer's device before the actual ACH transaction occurs, separating the calculation function from the execution function.
Solution Approach 2:
The system implements real-time feedback by calculating and displaying applicable fees to consumers immediately during the payment process. The processing server provides feedback about surcharge amounts based on real-time BIN lookups and transaction parameters, allowing consumers to see the complete cost before confirming the payment.
3Reliability
If surcharge fees are applied to electronic transactions, then consumers can be charged processing fees, but consumers may pay higher fees when lower fees are possible
Solution Approach 1:
The surcharge fee structure is made dynamic rather than static. The system automatically adjusts the applicable surcharge based on real-time transaction parameters, BIN data, and current fee schedules. This dynamic adjustment ensures that consumers are charged the most appropriate fee level for their specific transaction type and card, rather than a fixed higher fee.
Solution Approach 2:
The system changes the parameter of fee calculation from a static percentage to a dynamic value based on multiple factors including BIN data, transaction amount, card type, and current surcharge schedules. This parameter change allows the system to optimize fee collection while adapting to different consumer situations and payment scenarios.
4Extent of automation
If ACH transactions are used for payment, then payments can be processed electronically, but the transaction may not finalize due to processing delays
Solution Approach 1:
The system performs preliminary actions by pre-authorizing transactions and validating payment information before the actual ACH settlement occurs. This preliminary validation step reduces the likelihood of transaction failures during the batch processing cycle, as issues are identified and resolved before the funds are actually transferred.
Solution Approach 2:
The pre-authorization mechanism provides a form of cushioning by reserving funds and confirming payment intent in advance. This creates a buffer that protects against potential ACH failures, as the system has already established the payment framework and can handle exceptions more gracefully if the batch processing encounters issues.
Data Source
AI summary
A method for integrating an electronic funds transfer system with an email-based digital wallet is disclosed. The method includes the steps of registering a user with a digital wallet service using a unique email address associated with the digital wallet, registering the unique email address with a banking institution to enable electronic funds transfers, receiving a confirmation email from the banking institution at the digital wallet service, enabling end consumers to send funds to the unique email address via the electronic funds transfer system, receiving transaction emails at the digital wallet service, wherein the transaction emails contain details of the funds transfer, parsing the transaction emails to extract transaction details including the amount transferred and any associated notes, and displaying the extracted transaction details in a transaction history associated with the digital wallet.