Online Transaction Payment via Point of Sale Terminal
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Solution Overview
Problem
E-commerce transactions face challenges due to high costs and fraud risks associated with credit/debit card payments, and many customers, especially 'unbanked' and 'under-banked' individuals, are hesitant to enter financial information online, limiting their ability to make online purchases.
Innovation Solution
A system that allows customers to pay for online purchases at a Point of Sale (POS) location, using methods like cash or store credit, which includes methods for managing transactions, preventing fraud, and providing alternatives for refunds and inventory management.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If credit or debit card payment methods are used for online purchases, then transaction processing and fraud processing costs increase, but payment security and reliability improve
Solution Approach 1:
The patent extracts the payment authentication process from traditional credit/debit card systems and relocates it to a point-of-sale terminal environment. The system separates the online ordering function from the payment processing function, allowing customers to complete purchases online without entering sensitive financial information, while payment verification occurs securely at the POS terminal using alternative payment methods.
Solution Approach 2:
The patent introduces a point-of-sale terminal as an intermediary between the customer and the payment processing system. This intermediary device enables unbanked and under-banked customers to make payments using cash or other alternative methods without requiring traditional banking infrastructure, while still providing secure transaction processing and fraud prevention capabilities.
2Ease of operation
If customers enter credit card information on websites, then online shopping convenience improves, but customer comfort and security perception worsen
Solution Approach 1:
The patent removes the requirement for customers to enter credit card information on e-commerce websites. The payment information entry process is extracted from the online ordering process and relocated to a point-of-sale terminal, allowing customers to shop online with the same convenience as before but without exposing sensitive financial information to potential security risks.
3Reliability
If traditional payment processing systems are used, then fraud processing capabilities improve, but chargeback exposure and overall costs worsen
Solution Approach 1:
The patent introduces a point-of-sale terminal as an intermediary that enables alternative payment methods including cash, mobile payments, and stored-value cards. This intermediary system provides fraud processing capabilities through secure terminal-based authentication while eliminating chargeback exposure associated with traditional card-based systems, as these alternative methods do not carry the same dispute and chargeback risks.
Data Source
AI summary
Disclosed are systems and methods for managing transactions in which an order is specified online and payment is received at a point of sale (POS). Methods are disclosed for managing payment for such transactions at a POS, including transactions involving payment for both in-store purchases and online orders. Methods are also disclosed for managing inventory and price changes for such transactions where payment can occur at any time in a pay period following order creation. Also disclosed are methods for processing refunds for online orders for which payment was made at a POS. Finally, methods for preventing fraud and abuse as well as restricting the availability of this payment method for certain items are disclosed.