Financial Institution Intermediary for Secure Payment Processing
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Solution Overview
Problem
Current online payment systems face challenges in securely and conveniently facilitating transactions, often leading to high drop-off rates at checkout and increased liability for fraudulent purchases due to the sharing of sensitive payment information with merchants.
Innovation Solution
A system and method where a financial institution initiates a session with a merchant, validates the merchant and customer, and provides a secure interface for the customer to select a payment account from an electronic wallet without sharing payment information with the merchant, using session identifiers and device cookies to enhance security and convenience.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If customer payment information is shared with merchants for online transactions, then payment processing can be completed, but security risks and fraudulent transaction liability increase
Solution Approach 1:
The patent introduces a financial institution as an intermediary between the customer and merchant. The financial institution hosts a customer interface that directly communicates with the customer's device, while the merchant only communicates with the financial institution. This intermediary structure allows payment processing to occur without the merchant ever receiving or storing sensitive customer payment information, thereby resolving the contradiction between operational ease and security risks.
2Productivity
If traditional checkout processes are used where customers enter credit card information, then transactions can be authorized, but drop-off rates increase due to complexity and security concerns
Solution Approach 1:
The patent implements a self-service mechanism where the customer's device automatically retrieves and transmits payment information to the financial institution without requiring manual entry. The system uses device identifiers and automated authentication to streamline the process, eliminating complex form-filling and reducing checkout drop-off rates while maintaining security.
3Ease of operation
If merchants store customer payment information for future transactions, then convenience is improved, but liability for fraudulent purchases increases
Solution Approach 1:
The patent extracts the payment information storage function from the merchant's system and places it exclusively within the financial institution's secure environment. The financial institution maintains encrypted storage of customer payment data and device identifiers, while merchants only receive authorization tokens. This extraction eliminates merchant liability for fraudulent purchases while preserving repeat purchase convenience through the financial institution's secure recall system.
Data Source
AI summary
Systems and methods for facilitating payments are disclosed. In one embodiment, a method for facilitating a transaction may include (1) a customer selects a good or service to purchase from a merchant; (2) the customer being authenticated with a financial institution; and (3) the financial institution associating a unique identifier for the customer's merchant account with the customer's financial institution account. In another embodiment, a method for facilitating a transaction may include (1) a customer selecting a good or service to purchase from a merchant; (2) the customer being authenticated with a financial institution; (3) the financial institution provisioning a merchant-specific identifier for the merchant; and (4) the financial institution providing the merchant-specific token to the merchant.