Federated Directory Model for Real-Time Payment Settlement
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Solution Overview
Problem
Current payment systems are cumbersome and prone to errors, with customers facing difficulties in setting up bill payees, managing multiple login credentials, and exposing themselves to fraud due to the lack of a centralized and reliable directory service for banking information.
Innovation Solution
A federated directory model that enables real-time clearing and payment settlement transactions by tokenizing endpoints, supporting verified single sign-on, and providing a unified interface for accessing banking information, allowing multiple pricing models and reducing the complexity of directory services.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If a centralized directory service is implemented, then payment transaction accuracy and reliability improve, but system complexity and implementation cost increase
Solution Approach 1:
The patent introduces a centralized directory service as an intermediary component that mediates between payment systems and banking information. This directory service stores and manages payee bank account information, routing numbers, and other payment-related data, allowing multiple payment systems to access standardized information without directly connecting to each other's proprietary directories, thereby improving transaction accuracy while managing system complexity through a standardized interface
Solution Approach 2:
The centralized directory service is designed to serve multiple payment systems, banks, and financial institutions simultaneously with a universal interface. It provides standardized access to banking information for various payment types (bill pay, transfers, checks) across different institutions, eliminating the need for each system to maintain separate proprietary directories and reducing overall system complexity through consolidation
2Reliability
If proprietary directories are maintained by individual banks, then data accuracy for that bank's transactions improves, but overall system interoperability and cost-effectiveness deteriorate
Solution Approach 1:
The patent merges multiple proprietary bank directories into a single centralized directory service that consolidates banking information from various institutions. This unified directory maintains data accuracy for each bank's transactions while enabling interoperability across the entire payment ecosystem, allowing different payment systems to access standardized banking information without relying on fragmented proprietary directories
Solution Approach 2:
The centralized directory service is organized into structured segments or sections, with each section dedicated to specific banks or financial institutions. This segmentation allows the directory to maintain bank-specific data accuracy while providing a unified access interface, enabling the system to handle diverse banking information in an organized, interoperable manner
3Reliability
If customers use online bank account services for bill pay, then payment security improves, but user experience and ease of setup deteriorate
Solution Approach 1:
The centralized directory service performs preliminary actions by pre-storing and validating payee banking information, including bank account numbers, routing numbers, and payee details, before actual payment transactions occur. This allows customers to select payees from a pre-validated list rather than manually entering banking information, improving ease of setup while maintaining security through the use of pre-verified data stored in the secure centralized directory
Data Source
AI summary
A method, system, apparatus, and computer program for conducting a real-time payment settlement transaction. The method receiving a request for endpoint data, and, in response to receiving the request, determining whether one or more directories, among a plurality of directories, can provide the endpoint data requested in the request. The method also includes identifying at least one directory, among the directories determined to be able to provide the endpoint data requested in the request, as a selection for providing the endpoint data, and obtaining the endpoint data from the at least one directory identified in the identifying. In one example embodiment, the endpoint data includes an account number of a payee account and a routing number of a payee entity. A payment message or a request for payment message can be routed using the obtained endpoint data.