IOU Payment System for Trustworthy Deferred Transactions
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Solution Overview
Problem
In online financial transactions, users may face difficulties in completing transactions due to insufficient funds in their payment provider accounts, leading to missed opportunities for both buyers and sellers, as they often rely on third-party financial institutions that incur additional fees and risks.
Innovation Solution
A system that allows users to offer and accept IOUs (promises to pay) through a payment processing service, enabling users to schedule payments from their accounts even if they don't have sufficient funds immediately, with the option to accept payment earlier for a reduced amount, leveraging pre-screened secondary payment sources for trustworthiness verification.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If users rely on third-party financial institutions for payments, then transaction security is improved, but transaction costs increase due to fees and interest payments
Solution Approach 1:
The patent extracts the payment facilitation function from traditional third-party financial institutions and implements it directly within the online account system. Users can send payments from their online accounts without involving external banks or credit card companies, eliminating transaction fees and interest payments while maintaining security through the platform's own account verification and hold mechanisms.
Solution Approach 2:
The online account system itself acts as an intermediary between buyers and sellers, replacing traditional financial institutions. The system provides account verification, payment authorization, and fund holding capabilities directly, eliminating the need for external bank involvement and associated costs while maintaining transaction security through controlled release of funds upon delivery confirmation.
2Reliability
If users wait for sufficient funds in their accounts before transacting, then payment reliability is improved, but transaction opportunities are lost due to timing constraints
Solution Approach 1:
The system performs preliminary verification of the payer's online account balance and authorization status before the transaction occurs. By pre- verifying that sufficient funds are available and the payer is authorized to spend them, the system ensures payment reliability upfront, allowing immediate transaction execution without waiting for fund accumulation.
Solution Approach 2:
The system automatically verifies account balances and authorization status without requiring manual intervention or waiting periods. The automated real-time verification of funds availability and payer authorization enables immediate transaction processing while maintaining payment reliability through systematic checks.
3Adaptability or versatility
If users transact without sufficient funds using IOU promises, then transaction flexibility is improved, but trustworthiness verification becomes difficult
Solution Approach 1:
The system performs preliminary verification of the payer's online account and authorization status before accepting an IOU promise. By pre-verifying that the payer has a valid online account and is authorized to make payments, the system establishes trustworthiness upfront, enabling flexible deferred payment arrangements without compromising verification reliability.
Solution Approach 2:
The system provides feedback to the payee regarding the payer's account verification status and authorization level before the transaction is finalized. This feedback mechanism allows the payee to assess trustworthiness based on verified account information and authorization status, enabling informed decisions about accepting IOU promises while maintaining flexibility.
Data Source
AI summary
A system for facilitating financial transactions over a network includes a first user device, a second user device and a payment processing device. The first user device is adapted to allow a first user to send an invitation to a second user, via a network, to accept a promise to pay (IOU). The second user device is adapted to allow the second user to generate a response to the invitation via the network. The payment processing device is adapted to receive the invitation and the response and to schedule a payment if the response is an affirmative response.