Fractional Security Asset Payment System
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Solution Overview
Problem
Security assets, such as stocks and bonds, are not commonly used for everyday payments due to long transaction times, fluctuating values, and high transaction costs, making them impractical for merchants and customers.
Innovation Solution
A payment service system that allows users to manage and transfer security assets in fractional units, facilitating their use as payment instruments by recording ownership interests electronically and reducing transaction costs through a ledger-based system.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If security assets are used as payment instruments, then investment opportunities are 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 requiring whole units. This segmentation enables faster transaction processing while maintaining investment flexibility, as the system can process smaller, divided asset transfers more efficiently than traditional whole-unit security transfers.
Solution Approach 2:
The payment service system acts as an intermediary between security asset holders and merchants, facilitating direct payment transactions without requiring traditional brokerage intermediaries. This intermediary platform streamlines the transfer process, reducing transaction time while enabling security assets to function as payment instruments.
2Adaptability or versatility
If security assets are used for payments, then asset utilization is improved, but transaction costs increase
Solution Approach 1:
By dividing security assets into fractional units, the system enables payment transactions with smaller asset values, reducing the overall transaction costs associated with transferring expensive securities. This segmentation allows merchants to accept payments in practical amounts without incurring prohibitive transfer fees.
Solution Approach 2:
The patent changes the parameter of asset divisibility, transforming security assets from indivisible whole units to divisible fractional units. This parameter change enables cost-effective transactions by allowing users to transfer only the precise amount needed for payment, minimizing excess transfer costs.
3Adaptability or versatility
If security assets are used as payment instruments, then investment flexibility is improved, but measurement precision deteriorates
Solution Approach 1:
The fractional segmentation of security assets enables precise pricing and measurement of payment amounts. By dividing assets into smaller units, the system can accurately measure and transfer specific values, improving pricing precision while maintaining investment flexibility.
Solution Approach 2:
The patent replaces traditional mechanical certificate-based security transfer with an electronic ledger-based system. This substitution enables precise digital measurement and tracking of fractional asset values, improving measurement precision through automated electronic recording and calculation.
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.