Fund Transfer via Intermediate Accounts
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Solution Overview
Problem
Current fund transfer methods between different banks are either costly and instantaneous (wire transfers) or slow and free (ACH transfers), with a high risk of rejection and inefficiency due to the involvement of multiple entities and batch processing.
Innovation Solution
A transfer management system that utilizes intermediate accounts at different banks to facilitate intra-bank transfers, reducing costs and increasing speed by breaking down inter-bank transfers into intra-bank transactions, ensuring quick and verified fund transfers between accounts at various banks.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Speed
If wire transfer is used to transfer funds between different banks, then the transfer speed is improved (almost instantaneous), but the cost increases (both sender and receiver pay large fees)
Solution Approach 1:
The patent introduces an intermediary account system where funds are transferred through intermediate accounts at each bank rather than directly between customer accounts at different banks. This intermediary mechanism allows the transfer to be processed as two separate intra-bank transfers, avoiding the high costs of traditional wire transfers while maintaining fast processing speed.
Solution Approach 2:
The patent segments the inter-bank transfer process into two separate intra-bank transfer operations. By breaking down the single complex inter-bank transfer into smaller, manageable intra-bank transfers through intermediate accounts, the system achieves both speed and cost efficiency that neither traditional wire transfer nor ACH alone can provide.
2Loss of energy
If ACH transfer is used to transfer funds between different banks, then the cost is reduced (free or small fee), but the transfer speed deteriorates (1-3 days to complete)
Solution Approach 1:
The patent segments the transfer process into two fast intra-bank transfers instead of one slow inter-bank ACH transfer. Each intra-bank transfer completes quickly through the bank's own processing system, eliminating the 1-3 day delay inherent in traditional ACH inter-bank transfers while keeping costs low.
Solution Approach 2:
The intermediary accounts serve as mediation points that enable rapid intra-bank transfers to replace slow inter-bank ACH processing. These intermediate accounts allow the system to bypass the batch processing limitations of ACH while maintaining the cost advantages of electronic transfer systems.
3Loss of energy
If ACH transfer is used to transfer funds between different banks, then the cost is reduced, but the reliability deteriorates (transfer may be rejected up to 60 days later)
Solution Approach 1:
By segmenting the transfer into two intra-bank operations, the patent eliminates the prolonged settlement period of ACH transfers. Each intra-bank transfer is processed and completed within the same banking system, providing immediate finality and eliminating the 60-day rejection window inherent in traditional ACH inter-bank transfers.
Solution Approach 2:
The intermediary account system acts as a reliable mediation mechanism that ensures transfer completion. Once funds are transferred to the intermediate account and then to the receiving account, the transaction is final and cannot be rejected days later, providing the reliability needed for immediate fund transfer guarantees.
4Ease of operation
If traditional inter-bank transfer methods are used, then the process is simple for the user, but the system complexity increases (multiple entities and batch processing involved)
Solution Approach 1:
The patent introduces an intermediary account management system that handles the complexity of coordinating multiple banks and transfers. This intermediary layer absorbs the system complexity, allowing users to initiate transfers with a single action without needing to understand or manage the underlying multi-bank coordination mechanics.
Solution Approach 2:
The system automatically manages the intermediate accounts and coordinates the intra-bank transfers without requiring user intervention. The complexity of setting up intermediate accounts, routing transfers, and reconciling transactions is handled autonomously by the system, maintaining ease of operation for users while managing system complexity internally.
Data Source
AI summary
A transfer management system receives a request to transfer an amount of funds from a transferring account maintained by a transferring bank to a receiving account maintained by a receiving bank. The transfer management system determines whether the transferring bank maintains an intermediate transferring account, and whether the receiving bank maintains an intermediate receiving account. If the transferring bank maintains an intermediate transferring account and the receiving maintains an intermediate receiving account, the transfer management system transmits to a transferring bank system of the transferring bank an intra-bank transfer request. The intra-bank transfer request is to transfer the amount of funds from the transferring account to the intermediate transferring account. Additionally, the transfer management system transmits an intra-bank transfer request to a receiving bank system of the receiving bank to transfer the amount of funds from the intermediate receiving account maintained by the receiving bank to the receiving account.