Just-in-Time Payment Card Funding from External Gateway
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Solution Overview
Problem
Users face challenges when using funding sources like home equity lines or loans for purchases, as they require preplanning and result in unnecessary interest accrual, and existing payment card systems often require funding sources to hand over control to payment card processors.
Innovation Solution
A system that funds a payment card account from an external source just-in-time for a purchase, allowing users to use funds on demand and only in the amounts needed, by maintaining a payment card account for a third-party funding source and generating real-time funding requests through a third-party funding gateway.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If funds are transferred from a funding source to a bank account in advance, then the user can make purchases without preplanning, but interest accrues before the time of purchase and the user pays more interest than necessary
Solution Approach 1:
The system performs preliminary setup by establishing a payment card account linked to the funding source, but the actual fund transfer is triggered only when needed (at the time of purchase authorization). This allows the user to have the convenience of pre-configured payment while avoiding premature interest accrual, as funds are transferred just-in-time for the transaction.
Solution Approach 2:
The system automatically manages the fund transfer process by detecting purchase authorization requests and triggering real-time funding from the external source. The user does not need to manually transfer funds or estimate purchase amounts, as the system self-adjusts the funding timing and amount based on actual transaction needs.
2Adaptability or versatility
If a funding source contracts with a traditional payment card processor, then payment card functionality is provided, but control of funds is handed over to the payment card processor
Solution Approach 1:
The payment card processing system acts as an intermediary that coordinates between the user, merchant, and external funding source without taking control of the funds. It receives purchase authorization requests, triggers funding requests to the external source, and processes the transaction, while the external funding source retains direct control over its funds throughout the process.
Solution Approach 2:
The system separates the payment card processing functions from fund control functions. The payment card processing system handles transaction authorization and coordination, while the external funding source independently manages its own funds and decides whether to fulfill funding requests, maintaining clear separation of duties and control.
Data Source
AI summary
The present disclosure is directed to a system, method, and computer program for funding a payment card account from an external funding gateway just-in-time for a purchase. A payment card processing system maintains a payment card account for a user for funds from a third party funding source. Funds from the funding source are controlled by an external funding gateway. In order to approve a purchase authorization transaction, the payment card account must have a positive balance equal to or greater than the purchase amount. Funding requests are sent from the payment card processing system to the external funding gateway in response to receiving a purchase authorization request for the payment card, and, if the funding request is approved by the external funding gateway, the system credits to the payment card account with the funds just-in-time for approval of a purchase authorization request.