Open-loop payment network for trade credit approval
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Current trade credit approval processes are cumbersome and inefficient, requiring extensive manual effort and lacking a unified platform for managing and processing trade credit transactions, leading to delays and operational inefficiencies.
Innovation Solution
A system utilizing an open loop payment network allows customers with trade credit accounts to initiate purchases using a trade credit card or account number, with a credit manager approving and authorizing transactions, and subsequently initiating payments through a supporting bank, while providing detailed invoices and managing credit lines, thereby streamlining the approval and payment process.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If traditional trade credit approval processes are used, then manual control and oversight are maintained, but the process becomes cumbersome and inefficient with extensive delays
Solution Approach 1:
The patent implements a universal payment network infrastructure that handles multiple transaction types (trade credit, consumer credit, debit) through a single platform. This allows the system to process diverse financial transactions using common protocols and infrastructure, dramatically improving processing speed while reducing the complexity of maintaining separate manual approval systems for different transaction types.
Solution Approach 2:
The patent introduces an intermediary layer between the customer/merchant and the credit manager, using standardized payment network messages and protocols. This intermediary automates the communication and approval process, eliminating the need for manual intervention while maintaining credit oversight, thus resolving the contradiction between speed and control.
2Ease of operation
If manual trade credit approval processes are used, then detailed transaction oversight is maintained, but operational efficiency decreases and delays occur
Solution Approach 1:
The patent enables customers to initiate trade credit transactions themselves using their payment cards, without requiring manual application or approval for each transaction. The system automatically processes transactions through the payment network and only requires credit manager intervention when approval is needed, allowing customers to serve themselves while maintaining necessary oversight.
Solution Approach 2:
The patent implements preliminary credit approval and setup processes where customers are pre-approved for trade credit lines before making purchases. This preliminary action eliminates the need for real-time manual approval of individual transactions, dramatically reducing approval time while maintaining control through pre-established credit terms and limits.
3Reliability
If traditional separate systems are used for trade credit management, then specialized control is maintained, but data consolidation and security improve when unified
Solution Approach 1:
The patent merges trade credit management, consumer credit processing, and debit transactions into a single unified payment network system. By combining these previously separate functions into one integrated platform with standardized protocols, the system improves reliability through consistent security and processing while managing integration complexity through common infrastructure and message standards.
Data Source
AI summary
Aspects of this invention provide for allowing a customer which has been issued trade credit to use that credit through an open loop payment network. A purchase from a merchant using an open loop payment network associated with that customer's trade credit account is requested to be approved. A credit manager can then approve or deny the transaction. Once the transaction is approved, the credit manager is provided transaction information through a number of processes described herein. The credit manager also initiates the payment of the merchant through a supporting bank. Once the transaction information is received by the credit manager, the credit manager can then issue an invoice based on the trade credit terms agreed upon when the customer was issued trade credit.