Online Payment System for Cross-Border Transaction Settlement
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Solution Overview
Problem
Current online payment systems face challenges in facilitating transactions across different currencies, particularly when payors and payees are in different countries, as they often involve unfavorable exchange rates, high fees, and delayed fund availability, and may require credit cards or bank accounts, which not all users possess.
Innovation Solution
An online payment system that allows payors to generate and send money orders or negotiable instruments in various currencies, enabling payees to receive funds at retail locations, bypassing the need for traditional banking systems and allowing for currency conversion and fee management.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If traditional banking systems are used for international transactions, then currency conversion and fund transfer are enabled, but unfavorable exchange rates and high service fees are incurred
Solution Approach 1:
The patent introduces an online payment system as an intermediary between payors and payees, replacing traditional banking systems. This intermediary processes international transactions by allowing payors to send funds online and payees to receive them at retail locations, thereby avoiding the unfavorable exchange rates and high fees associated with conventional banking channels while maintaining currency conversion capability.
Solution Approach 2:
The patent extracts the essential function of international payment from the traditional banking system and relocates it to an online payment platform. By separating the payment initiation (online) from the fund disbursement (retail location), the system eliminates the need for payees to have bank accounts and avoids banking fees, while still providing currency conversion services through the online platform.
2Ease of operation
If foreign banks cash money orders, then funds are made available to payees, but funds are held until clearing which can take months
Solution Approach 1:
The system performs preliminary actions by pre-processing payment information online and preparing funds for disbursement before the payee actually collects them at the retail location. The online payment system validates transactions, converts currencies, and prepares funds in advance, so that when payees collect at retail locations, funds are immediately available without requiring months-long clearing periods associated with traditional foreign bank processing.
Solution Approach 2:
The online payment system acts as an intermediary that bridges the gap between payors and foreign banks. It handles the complex clearing and settlement processes online, allowing retail locations to simply disburse funds without needing to go through lengthy foreign bank clearing procedures, thereby dramatically reducing the time funds are held.
3Reliability
If credit cards or bank accounts are required for online transactions, then secure payment processing is enabled, but users without these accounts are excluded from electronic transactions
Solution Approach 1:
The patent creates a universal payment system that serves multiple functions: it accepts online payments from payors, processes currency conversion, and enables fund collection at various retail locations. This multi-functional system allows users without credit cards or bank accounts to participate in electronic transactions by simply collecting funds at retail locations, thereby extending accessibility while maintaining security through the online processing infrastructure.
Solution Approach 2:
The online payment system serves as an intermediary that decouples the security requirements from the user's personal financial accounts. It provides secure payment processing online while allowing payees to receive funds through retail locations without needing personal bank accounts, thus maintaining security while expanding accessibility to unbanked populations.
4Adaptability or versatility
If money orders are used for international payments, then transactions between parties in different countries are enabled, but unfavorable exchange rates and high fees limit profits
Solution Approach 1:
The online payment system acts as an intermediary that replaces traditional money order processing. It enables cross-border transactions by allowing online payment initiation and retail location collection, eliminating the need for physical money orders and their associated high fees and unfavorable exchange rates, thereby reducing transaction costs while maintaining cross-border capability.
Solution Approach 2:
The patent substitutes the mechanical system of physical money orders with an electronic online payment system. This replacement eliminates the costs associated with printing, mailing, and processing physical money orders, as well as the unfavorable exchange rates charged by traditional systems, while maintaining the essential function of enabling international transactions.
Data Source
AI summary
A method for paying for an auction item at least partially using an online payment system by a payor to compensate a payee includes receiving at a host computer system payment information relating to a transaction. The payment information includes comprising at least a payee identifier, a first payment amount, and an auction identifier. The auction identifier relates to an auction that was won by the payor that was for the auction item. The method also includes generating a transaction identifier at the host computer system and transmitting the transaction identifier to the payor. The method further includes receiving at a retail location a payment and using the transaction identifier to relate the payment to the transaction. The method further includes making a second payment amount available to the payee. The second payment amount may be based on the payment.