Issuer-Validated Wallet Payments Without Card Network Routing
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Existing digital wallet systems require customers to add their payment cards, limiting the ability to use payment cards of choice during transactions.
Innovation Solution
Systems and methods for conducting payment network-less transactions by integrating payment cards with digital wallets, enabling direct issuer authorization, clearing, and settlement without using traditional payment networks, utilizing optical codes and direct integration with issuers, and applying transaction rules and limits.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If customers use traditional digital wallet systems that require adding payment cards, then transaction security and issuer validation are ensured, but customer flexibility and ability to use payment cards of choice are limited
Solution Approach 1:
The patent segments the traditional payment network into two independent components: (1) the issuer backend that performs authorization and validation, and (2) the payment network that handles clearing and settlement. This segmentation allows the authorization function to be separated from the clearing function, enabling customers to use any payment card without being constrained by digital wallet requirements, while maintaining security through direct issuer validation.
Solution Approach 2:
The patent introduces an intermediary mechanism where the merchant's point-of-sale system directly communicates with the issuer backend for authorization decisions, bypassing the traditional payment network for the authorization phase. This intermediary approach enables flexible payment card selection while maintaining security through direct issuer validation, and allows the payment network to be used only as a fallback for clearing and settlement.
2Reliability
If transactions are conducted through traditional payment networks, then clearing and settlement are standardized, but transaction speed and availability are reduced when networks are unavailable
Solution Approach 1:
The patent performs the authorization action preliminarily by obtaining approval from the issuer backend before the actual transaction processing. This preliminary authorization ensures that the payment card is valid and has sufficient funds, while allowing the transaction to proceed without waiting for the payment network's clearing and settlement processes. If the payment network is unavailable, the pre-authorized transaction can still be completed using alternative clearing methods.
3Adaptability or versatility
If direct integration with issuers is implemented, then payment network dependency is reduced, but system complexity and integration requirements increase
Solution Approach 1:
The patent creates a universal transaction processing framework that can handle multiple payment scenarios through a single integrated system. The merchant's point-of-sale system is designed to work with any payment card type (credit, debit, prepaid, gift cards) by directly integrating with issuer backends, while maintaining compatibility with traditional payment network processes. This multi-functional approach eliminates the need for separate processing systems for different card types, reducing overall integration complexity despite the direct issuer connections.
Data Source
AI summary
Systems and methods for conducting payment network-less transactions are disclosed. A method may include: receiving, by a computer application executed on an electronic device, payment card information for a payment card; receiving by the computer application, a rule for the payment card from an issuer backend, the issuer backend associated with an issuer of the payment card; communicating, by the computer application and to a merchant point-of-sale device, an indication that a transaction for a good or service will be conducted without using a payment network; receiving, by the computer application and from the merchant point-of-sale device, transaction details for the transaction; decisioning, by the computer application, the transaction by applying the rule to the transaction details; communicating, by the computer application, approval to the merchant point-of-sale device in response to approving the transaction; and sending, by the computer application, payment advice to the issuer backend.