Electronic Payment Network for Multi-Payee Settlement
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Solution Overview
Problem
Current electronic payment systems cannot facilitate simultaneous deposits into multiple payees' accounts, requiring physical endorsement and manual processing, which is inefficient and costly, especially for businesses and insurance claims.
Innovation Solution
A cloud-based electronic payment network that enables direct deposit and multiple payee payment processing through a Notification, Endorsement, Debits, Disbursements (NEDD) protocol, allowing for online authentication, endorsement, and notification, and integrating with existing payment systems for efficient disbursement.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If a single electronic payment is made to multiple payees, then payment efficiency and cost-effectiveness are improved, but existing electronic payment systems cannot process such transactions simultaneously to multiple accounts
Solution Approach 1:
The patent introduces an intermediary system that receives a single payment instruction from the payor and automatically distributes funds to multiple payees through existing payment networks. This intermediary layer enables multi-payee functionality without requiring changes to the underlying ACH or card networks, resolving the contradiction between improved productivity and system adaptability.
Solution Approach 2:
The system segments a single payment instruction into multiple separate payment transactions, each routed to a different payee through existing payment networks. This segmentation allows the system to maintain compatibility with single-payee payment infrastructure while achieving multi-payee payment efficiency.
2Adaptability or versatility
If paper checks are used for multiple payees, then all payees can be listed on a single instrument, but manual endorsement and physical verification are required, increasing processing time and costs
Solution Approach 1:
The patent replaces the mechanical endorsement process with electronic authentication. Payees authenticate their identity and authorize fund receipt electronically through the system, eliminating the need for physical signatures, in-person verification, and manual processing. This substitution maintains the flexibility of accommodating multiple payees on a single instrument while dramatically reducing processing time.
Solution Approach 2:
The system creates and distributes electronic copies of the payment instrument to all listed payees, who can then authenticate and claim their portions remotely. This eliminates the need for the original physical check to be physically present and manually endorsed by each payee in sequence.
3Extent of automation
If automated teller machine deposits are used for multiple payee checks, then deposit automation is improved, but endorsements must still be physically verified by bank representatives, preventing automated processing
Solution Approach 1:
The patent replaces physical endorsement verification with electronic authentication mechanisms that can be performed remotely and automatically. The system verifies payee identities and authenticates endorsements through electronic means, eliminating the need for bank representatives to physically verify signatures at ATMs or branches, thereby enabling full automation of the deposit process.
4Reliability
If multiple separate electronic payments are issued to different payees, then each payment can be processed through existing systems, but the payor must manually create and track multiple transactions, increasing administrative burden
Solution Approach 1:
The patent merges multiple separate payment transactions into a single unified payment instruction from the payor's perspective. The system automatically handles the segmentation and routing to multiple payees, while providing centralized tracking and confirmation. This combining approach maintains the reliability of individual payment processing through existing systems while eliminating the administrative burden of manual transaction creation and tracking.
Data Source
AI summary
A system and method is disclosed that facilitates electronic payment to multiple payees from a single electronic payment transaction and/or from a multiple payee check payment. The system includes a database storing payor and payee identity, address, and bank account information and a processor that executes instructions causing the processor to initiate a multiple payee payment and/or a multiple payee check handling and clearing process including determining identity of the payor and/or receiving the payor's check information; receive identification of multiple payees; place a hold on a payor's bank/card account and/or accept multiple payee check deposit via an ATM; alert respective payees that funds are available; enable payee electronic check endorsement and/or identity verification for the respective payees; receive electronic payee endorsement and confirmation of identity and provide an endorsement file to the payor for each payee; debit the payor's account in respective amounts owed the respective payees; and disburse the respective amounts to the respective payees through a payment network.