Mobile Wallet Limited Payment Network Routing
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Solution Overview
Problem
Mobile wallet applications face high transaction fees when using general payment networks, which can be costly for merchants, and there is a need for a more efficient method to process payments that reduces these costs.
Innovation Solution
Implementing a limited payment processing network within mobile wallet applications that connects directly with a mobile wallet provider system, allowing merchants to authorize and clear payments through a limited set of issuers, thereby reducing fees by bypassing general payment networks.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of manufacture
If a general payment network is used to process payments through mobile wallet applications, then payment processing capability is provided, but transaction fees are high and costly for merchants
Solution Approach 1:
The patent segments the payment network into two distinct types: general payment networks and limited payment networks. Mobile wallet applications can selectively use limited payment networks for compatible issuers, thereby avoiding high fees of general networks while maintaining payment processing capability. This segmentation allows merchants to benefit from lower transaction fees without sacrificing the ability to process payments.
2Loss of energy
If a limited payment processing network is implemented to reduce fees, then transaction costs are reduced, but the system complexity increases with multiple network interfaces
Solution Approach 1:
The mobile wallet application is designed with multi-functionality to interface with both general payment networks and limited payment networks. This universal design allows the same application to automatically select the most cost-effective network based on the issuer, thereby reducing transaction fees without requiring separate systems. The application acts as a unified interface that handles multiple payment network protocols.
3Adaptability or versatility
If mobile wallet applications support both general and limited payment networks, then payment processing versatility is improved, but the difficulty of detecting and measuring payment routing increases
Solution Approach 1:
The system performs preliminary action by pre-configuring the mobile wallet application with knowledge of which issuers are associated with limited payment networks. When a payment is initiated, the application automatically identifies the issuer and selects the appropriate network type before processing. This preliminary identification simplifies payment routing detection and measurement, as the system already has the routing decision logic in place before the transaction occurs.
Data Source
AI summary
Various examples described herein are directed to systems and methods for managing payments of a first merchant. A mobile wallet application may receive first payment element data describing a first payment element for making a first payment and may determine that the first payment element is to be processed by a limited payment network. The mobile wallet application may send a first payment authorization message to an issuer of the first payment element via the limited payment network. The mobile wallet application may also receive second payment element data describing a second payment element for making a second payment. The mobile wallet application may determine that the second payment element is not to be processed by the limited payment network, and send a second payment authorization message to an issuer of the second payment element via a second payment network.