Multi-Lender Installment Options Through Payment Network
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Solution Overview
Problem
Consumers are disadvantaged by limited and less favorable installment payment options from a single lender, and merchants face burdensome system modifications to offer such options, leading to inefficiencies and limited consumer choice.
Innovation Solution
A method and system that allows consumers to access multiple lender options for installment payments through a customer device, enabling selection from a plurality of installment payment options, with data communication and authorization processes to facilitate transactions between merchant, lender, and issuer systems.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If consumers accept installment payment options from a single issuer or merchant, then the transaction can be completed with simplified processing, but the consumer is limited to less favorable payment terms and has reduced choice
Solution Approach 1:
The patent introduces a payment network as an intermediary between merchants, consumers, and multiple lenders. The network receives authorization requests from merchants, retrieves consumer account information, obtains installment payment offers from multiple lenders, and returns the options to the merchant. This intermediary approach enables consumers to access multiple lender options without requiring merchants to directly integrate with multiple lenders, thus resolving the contradiction between consumer choice and system complexity.
2Adaptability or versatility
If merchants implement their own installment payment options, then they can offer payment flexibility to consumers, but the merchant must modify multiple systems including POS devices and back office systems
Solution Approach 1:
The patent extracts the complex installment payment processing functionality from the merchant's system and relocates it to the payment network. The merchant's authorization request is enhanced with a flag indicating installment payment capability, but the actual retrieval of consumer information, generation of installment offers, and coordination with multiple lenders is performed by the payment network. This extraction allows merchants to offer payment flexibility without modifying their POS devices or back office systems, resolving the contradiction between payment flexibility and ease of system modification.
3Adaptability or versatility
If the system processes installment payment authorization requests through multiple lenders, then consumers gain access to better payment terms, but the authorization process requires additional communication steps
Solution Approach 1:
The patent implements preliminary action by having the payment network retrieve consumer account information and obtain installment payment offers from multiple lenders in advance, before the merchant completes the authorization process. The network proactively queries multiple lenders with the consumer's information and receives installment offers, then returns these pre-obtained options to the merchant. This preliminary retrieval of information and offers reduces the time required during the actual authorization transaction, resolving the contradiction between accessing multiple lender options and authorization processing time.
Data Source
AI summary
Provided is a method for providing installment payment options for a payment transaction. The method may include communicating, to a customer device, installment payment data associated with a plurality of installment payment options. A first authorization request for a payment transaction with a customer may be received from a merchant system. The first authorization request may include at least one field including first installment payment data associated with a first installment payment option. A first lender system associated with the first installment payment option may be determined. A second authorization request, which may include the first installment payment data, may be communicated to the first lender system. An authorization response may be received from the first lender system indicating approval of the first installment payment option for the payment transaction. The authorization response may be communicated to the merchant system. A system and computer program product are also disclosed.