Open Network Financial Transaction Authorization System
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Solution Overview
Problem
Current credit card transaction systems incur high costs due to proprietary networks, limit data transmission capacity, and require delays in gathering transaction information, which hinders real-time data exchange and discourages small businesses from adopting credit card technologies.
Innovation Solution
A system and method that uses an open network, such as the Internet, for financial and data transactions, where a point-of-sale device communicates with a computing system operated by a non-bank entity to authorize transactions, eliminating the need for proprietary networks and enabling real-time data exchange by using a card with a storage medium encoding a card number, allowing for instantaneous activation and reduced costs.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If a proprietary network is used for credit card transactions, then transaction security and reliability are improved, but transaction costs and network complexity increase
Solution Approach 1:
The patent introduces a transaction processing service and open network infrastructure as intermediaries between merchants and card-issuing banks. This mediator layer handles the complexity of secure transaction processing, authentication, and data management, allowing merchants to use simple Internet connections while maintaining security through centralized service management.
2Reliability
If a proprietary network is used for credit card transactions, then transaction security is improved, but transaction costs increase
Solution Approach 1:
The system enables merchants to independently process transactions using standard Internet infrastructure without requiring dedicated proprietary network infrastructure. The centralized transaction processing service automates security verification, authentication, and settlement processes, eliminating the need for merchants to invest in expensive specialized network equipment and maintenance.
3Quantity of substance
If magnetic strip storage is used on credit cards, then card information storage is achieved, but activation time and processing complexity increase
Solution Approach 1:
The system pre-generates and stores transaction data, authentication credentials, and account information in the transaction processing service database before actual card issuance. When a card is applied for and approved, the system has already prepared all necessary data structures and security parameters, allowing for near-instantaneous card activation without physical card production or magnetic strip encoding delays.
4Reliability
If proprietary network infrastructure is required, then transaction reliability is improved, but accessibility and ease of operation deteriorate
Solution Approach 1:
The system is designed to work with standard Internet infrastructure and common hardware devices that most businesses already possess. The transaction processing service provides universal access through web browsers and standard communication protocols, eliminating the need for specialized proprietary network equipment and making credit card processing accessible to businesses of all sizes, including small businesses.
Data Source
AI summary
A system and method for execution of financial and data transactions includes a point-of-sale device configured to execute a transaction in which at least one good or service is sold to an individual having a card with a storage medium encoding a card number. The transaction is completed after said point-of-sale device receives a data transmission authorizing said transaction. The point-of-sale device is configured to communicate via the Internet with a first computing system. The first computing system stores a set of instructions that cause the first computing system to evaluate the transaction to determine whether the transaction is to be authorized, and to send a transmission authorizing the transaction via the open network to said point-of-sale device.