Fractional Security Asset Payment Network
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Solution Overview
Problem
Security assets, such as stocks and bonds, are not commonly used for everyday payments due to longer transaction times, fluctuating values, and high transaction costs, making them unsuitable for merchants and impractical for fractional transactions.
Innovation Solution
A payment service system that allows users to manage and transfer security assets in fractions, using ledgers to record ownership and facilitate transactions, reducing costs and improving efficiency by enabling purchases, sales, and payments with arbitrarily specified quantities of security assets.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If security assets are used for everyday payments, then investment diversification is improved, but transaction time increases
Solution Approach 1:
The patent segments security assets into fractional units, allowing payments to be made in partial shares rather than whole units. This segmentation enables faster transaction processing while maintaining investment diversification benefits, as users can transfer smaller portions of security assets without waiting for full unit consolidation or approval processes.
2Adaptability or versatility
If security assets are accepted by merchants, then payment options are improved, but transaction costs increase
Solution Approach 1:
The patent introduces a payment network as an intermediary layer between security asset holders and merchants. This intermediary handles the conversion and settlement processes, reducing direct transaction costs for merchants while expanding payment options. The network mediates the complex interactions between different security assets and merchant requirements, making the system more efficient and cost-effective.
3Ease of operation
If fractional transactions of security assets are enabled, then payment flexibility is improved, but system complexity increases
Solution Approach 1:
The patent creates digital representations or copies of security asset ownership rights that can be divided and transferred fractionally. Instead of physically dividing actual securities, the system uses digital tokens or records that replicate ownership rights, enabling flexible fractional transactions while keeping the underlying asset structure simple and manageable.
4Productivity
If security assets are used for payments, then asset utilization is improved, but reliability decreases due to value fluctuation
Solution Approach 1:
The patent implements dynamic parameter adjustment mechanisms that monitor security asset values and automatically adjust transaction parameters such as settlement timing, conversion rates, or collateral requirements. When value fluctuation exceeds certain thresholds, the system modifies transaction parameters to maintain reliability, allowing continuous asset utilization while protecting against excessive value instability.
Data Source
AI summary
In one embodiment, a method includes receiving a request for payment associated with a transaction between a merchant and a customer, where a payment amount is specified in a fiat currency, determining a preference of the customer to pay for the transaction using a security asset, and verifying that a value of the security asset held by the payment system and assigned to the customer is sufficient to satisfy the payment amount. The method also includes initiating a transfer of at least a portion of the value of the security asset from a customer balance of the customer to a service balance of the payment service, initiating a transfer of a value in the fiat currency from the service balance of the payment service to a merchant balance of the merchant, and storing a record of the transaction between the customer and the merchant.