P2B Payment Processing With Reference-Based Real-Time Confirmation
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Solution Overview
Problem
Existing payment collection methods for businesses face issues such as incorrect account number entry, insufficient funds verification, and high processing costs due to reliance on checks and debit/credit cards, leading to inefficiencies and uncertainties in receiving payments from individuals.
Innovation Solution
A computer-implemented system and method enabling real-time person-to-business (P2B) payments through a designated electronic address, using a reference number for payment identification and confirmation, and integrating with existing P2P systems like Chase QuickPay or Zelle to facilitate secure and cost-effective transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If ACH payment is used for collecting past due amounts, then payment can be processed electronically, but the account number accuracy cannot be verified in real time and processing failures occur due to incorrect account numbers or insufficient funds
Solution Approach 1:
The system performs preliminary verification of the customer's account number and fund availability through real-time communication with the financial institution's system before initiating the ACH payment. This preliminary action ensures that the account number is correct and sufficient funds exist, preventing payment failures and improving collection reliability.
2Adaptability or versatility
If paper checks are used for payment, then customers can mail payments, but the financial institution loses float time and incurs additional processing costs
Solution Approach 1:
The system replaces the mechanical paper check mailing and processing system with an electronic ACH payment system. By substituting physical check handling with electronic fund transfers, the institution eliminates mail float time and reduces processing costs while maintaining payment collection functionality.
3Speed
If debit card or credit card transactions are used, then real-time payment can be processed, but transaction costs are relatively high
Solution Approach 1:
The system changes the payment processing parameter from high-cost real-time card transactions to lower-cost ACH electronic transfers. By adjusting the payment method parameter, the system achieves cost reduction while maintaining sufficient processing speed for collection purposes, balancing speed and cost considerations.
Data Source
AI summary
The invention relates to a computer-implemented system and method for receiving at a business an electronic person to business (P2B) payment from an individual. The method may comprise the steps of contacting an individual having a demand deposit account (DDA) to request the P2B payment in an amount that is due to the business; providing a designated electronic address for the business for receiving the P2B payment; identifying a reference number that is associated with the P2B payment; requesting the individual to use a P2B payment server to make the P2B payment from the individual's DDA account to the designated electronic address, wherein the P2B payment is associated with the reference number; monitoring the P2B payment server in real time to confirm receipt of the P2B payment; and using the reference number to apply the received P2B payment to the amount that is due to the business.