Payment Credential Matching with Open Approval

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Solution Overview

Problem

Current retail payment systems face challenges in efficiently processing payments using digital wallets, particularly in verifying shopper credentials and managing loyalty programs, and in assessing transaction risks, especially when using mobile devices and geolocation information.

Innovation Solution

A method that involves receiving and matching shopper credentials, including mobile phone numbers and geolocation information, with open approvals from financial institutions to notify merchants of approved payments, while also determining loyalty program entitlements and assigning transaction risks based on geolocation comparisons.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Ease of operation

If digital wallet payment processing is implemented, then payment convenience is improved, but credential verification complexity increases

Engineering Contradiction:

Improvepayment convenienceVSAvoidcredential verification complexity

Core Design Contradiction:

Ease of operationVSDevice complexity

Solution Approach 1:

The system performs preliminary actions by obtaining shopper credentials and initiating payment requests before the actual purchase transaction. The payment initiation request is sent to the financial institution in advance, and the system waits for an open approval response, thereby preparing the payment pathway ahead of time to streamline the actual purchase process.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system introduces an intermediary payment processing mechanism that acts as a mediator between the shopper's digital wallet and the merchant's point of sale system. The payment initiation request and open approval response serve as intermediary communication protocols that facilitate seamless credential verification and payment authorization without requiring direct complex interaction between the shopper and merchant systems.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Productivity

If open approval matching with shopper credentials is implemented, then payment processing speed is improved, but fraud risk increases

Engineering Contradiction:

Improvepayment processing speedVSAvoidfraud risk

Core Design Contradiction:

ProductivityVSObject-affected harmful factors

Solution Approach 1:

The system implements a feedback mechanism where the financial institution sends an open approval response back to the payment processing system. This feedback loop allows the system to verify that the payment initiation request was properly authorized by matching it with the received open approval response containing the shopper's credentials, thereby maintaining security while enabling fast processing.

Inventive Principle:

Principle #23Feedback

Solution Approach 2:

The system performs preliminary verification by obtaining and storing shopper credentials before processing the payment. The open approval response from the financial institution serves as pre-authorized validation, allowing the system to quickly match credentials during the actual transaction without performing complex real-time verification, thus maintaining both speed and security.

Inventive Principle:

Principle #10Preliminary action

3Reliability

If geolocation information is used for risk assessment, then fraud detection capability is improved, but system complexity increases

Engineering Contradiction:

Improvefraud detection capabilityVSAvoidsystem complexity

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The system applies local quality by using geolocation information specifically for risk assessment purposes rather than for the entire payment processing system. The geolocation data is obtained from the mobile device and compared with the merchant's location to locally evaluate transaction risk, adding targeted fraud detection capability without requiring complex system-wide changes.

Inventive Principle:

Principle #3Local quality

4Adaptability or versatility

If loyalty program verification is integrated, then customer retention is improved, but processing time increases

Engineering Contradiction:

Improvecustomer retention capabilityVSAvoidprocessing time

Core Design Contradiction:

Adaptability or versatilityVSLoss of time

Solution Approach 1:

The system merges loyalty program verification with the existing payment processing workflow. By integrating the loyalty program check into the same transaction flow that handles payment initiation and open approval matching, the system verifies shopper credentials for both payment and loyalty purposes simultaneously, thereby improving customer retention without significantly increasing processing time.

Inventive Principle:

Principle #5Merging (Combining)

Data Source

PatentUS9727859B1Methods, systems, and computer program products for using shopper credentials to initiate payment for a purchase by matching the credentials with an open approval from a financial institution

Publication Date: 2017.08.08 CAROLINA COUPON CLEARING INC

AI summary

A method includes performing operations as follows on at least one processor: receiving credentials from a shopper, the credentials being associated with a purchase from a merchant, receiving an open approval for advancing funds for the purchase from a financial institution, matching the open approval with the credentials received from the shopper, and notifying the merchant that payment has been approved.