Pay by Bank Tokenization for Merchant Funding
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Solution Overview
Problem
Current systems for online payments lack efficient integration of pay by bank services, which restricts users from easily adding and utilizing their bank accounts for funding merchant accounts, leading to cumbersome processes and limited payment options.
Innovation Solution
A method and system that allows users to select and add online banking accounts to merchant accounts, generate tokens for secure transactions, and conduct funding transactions using automated clearing house (ACH) processes, optimizing payment routes and restricting token usage for security and efficiency.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If traditional credit card or third party payment methods are used, then payment processing is simple and well-established, but payment options are limited and users cannot easily add bank accounts for funding
Solution Approach 1:
The patent introduces a payment processor as an intermediary system that bridges merchants and banks. This intermediary handles the complex token generation, account linking, and funding transactions automatically, allowing users to add bank accounts without exposing sensitive information or managing complex integration logic directly.
Solution Approach 2:
The system creates a token copy of the user's bank account information rather than storing actual sensitive data. This token is a simplified representation that enables funding transactions while preserving security, allowing the system to work with bank accounts without handling raw account details.
2Adaptability or versatility
If bank accounts are added to merchant accounts, then funding options are expanded, but security risks and transaction complexity increase
Solution Approach 1:
The system generates a token that copies essential account information without exposing sensitive data. This token is used for all funding transactions, ensuring that actual bank account credentials never leave the user's environment, thereby maintaining security while enabling expanded funding options.
Solution Approach 2:
The patent extracts sensitive authentication details from the transaction flow by using pre-generated tokens. The token contains only the necessary information for funding transactions, separating security concerns from functionality and allowing bank account integration without compromising user credentials.
3Ease of operation
If manual bank account integration is performed, then account linking is direct, but the process becomes cumbersome and time-consuming
Solution Approach 1:
The system performs preliminary actions by pre-generating tokens and pre-linking accounts before the user needs to fund a merchant account. Users can add their bank account once and have the token ready for future transactions, eliminating repetitive manual integration steps and saving time.
Solution Approach 2:
The payment processor handles the complex account linking and token generation processes automatically without requiring users to manually configure settings or provide detailed information. The system serves itself by automating what would otherwise be manual, time-consuming tasks.
4Reliability
If tokens are generated for bank accounts, then transaction security is enhanced, but system complexity and token management requirements increase
Solution Approach 1:
The payment processor acts as an intermediary that manages token generation and storage centrally. This intermediary handles the complexity of token management, including generation, storage, and validation, while presenting a simple interface to both users and merchants. The complex token management logic is isolated in the intermediary system rather than being distributed throughout the architecture.
Data Source
AI summary
Systems and methods for integrating pay by bank services are disclosed. A method may include a merchant computer program: (1) receiving a request to add funds to a merchant account or wallet; (2) receiving a selection to add an online banking account to the merchant account or wallet; (3) receiving a selection of a funding amount; (4) receiving a selection of a user financial institution; (5) receiving user login credentials for the user financial institution; (6) receiving, from a user financial institution backend, one or more bank accounts associated with the user login credentials; (7) receiving a selection of one of the bank accounts; (8) receiving a token for the selected bank account from a merchant financial institution backend; (9) storing the token in a merchant wallet; and (10) conducting a funding transaction for the funding amount using the token.