Mobile Payment Gateway Mediator for Merchant Fees

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Solution Overview

Problem

Existing payment card systems require merchants to establish relationships with acquirer financial institutions, leading to increased costs and complexity, particularly for small merchants, and may compromise customer security by requiring disclosure of payment card account numbers.

Innovation Solution

A payment system where transactions are initiated from the customer's device, allowing for secure, flexible, and convenient payment processing without disclosing the account number, using a customer's mobile device to request payments directly from their issuer, bypassing the need for a merchant-acquirer relationship and enabling wireless communication for transaction details.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If a customer uses a traditional payment card system, then the payment transaction can be completed, but the customer must disclose their payment card account number to the merchant which compromises security

Engineering Contradiction:

Improvecustomer securityVSAvoidpayment card account number disclosure

Core Design Contradiction:

ReliabilityVSLoss of information

Solution Approach 1:

The patent introduces a payment gateway as an intermediary between the customer and merchant. The gateway receives payment information from the customer and forwards it to the merchant without the merchant ever seeing the actual payment card account number. This mediator approach allows the transaction to complete while protecting the customer's sensitive information from direct exposure to the merchant.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The system creates a copy or representation of the payment information that can be transmitted without exposing the original sensitive data. The payment gateway processes and transmits payment details in a format that preserves transaction functionality while eliminating the need to share the actual payment card account number with the merchant.

Inventive Principle:

Principle #26Copying

2Adaptability or versatility

If a merchant establishes a relationship with an acquirer financial institution, then payment processing capability is obtained, but costs and complexity increase particularly for small merchants

Engineering Contradiction:

Improvepayment processing capabilityVSAvoidmerchant-acquirer relationship structure

Core Design Contradiction:

Adaptability or versatilityVSDevice complexity

Solution Approach 1:

The payment gateway serves as an intermediary that simplifies the payment processing infrastructure for merchants. Instead of requiring merchants to establish direct relationships with acquirer financial institutions, the gateway handles the complexity of payment processing on their behalf, making the system accessible to small merchants without complex contractual arrangements.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The system enables merchants to process payments through a self-service model where the payment gateway automatically handles transaction processing, authorization, and settlement without requiring merchants to navigate complex financial institution relationships. This automates what would otherwise require manual setup and maintenance of acquirer relationships.

Inventive Principle:

Principle #25Self-service

3Ease of operation

If a customer initiates payment from their mobile device, then convenience and flexibility are improved, but new system architecture and communication protocols are required

Engineering Contradiction:

Improvepayment initiation convenienceVSAvoidsystem architecture

Core Design Contradiction:

Ease of operationVSDevice complexity

Solution Approach 1:

The patent replaces traditional mechanical payment initiation methods (physical card insertion or manual entry at a terminal) with mobile device-based initiation using wireless communication protocols. The customer's mobile device communicates with the payment gateway through standardized wireless interfaces, eliminating the need for physical contact with payment terminals while enabling convenient remote payment initiation.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Data Source

PatentUS8762211B2System for personalized payments via mobile devices

Publication Date: 2014.06.24 MASTERCARD INT INC

AI summary

A method includes receiving transaction information at a mobile device from a merchant device. The transaction information includes a transaction amount and merchant information that identifies a merchant that operates the merchant device. The method further includes generating a funds transfer request in the mobile device. The funds transfer request includes the merchant information, information that indicates the transaction amount and information that identifies a customer of the merchant. The funds transfer request is for requesting that funds be transferred from a payment card account that belongs to the customer to a payment card account that belongs to the merchant. The method also includes transmitting, from the mobile device, the funds transfer request, to a financial institution that issued the customer's payment card account.