Payment Identification Code for Secure Electronic Transactions
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Solution Overview
Problem
Current electronic payment systems face challenges in securely transmitting and validating account information, particularly in business-to-business transactions, due to concerns over security, authorization, and the reluctance to share account numbers, which hinders the adoption of electronic payments and lacks remittance information.
Innovation Solution
A method utilizing a payment identification code (PIC) and system routing number to securely facilitate electronic payments by masking sensitive account information, allowing direct communication between buyer and seller banks through existing payment systems like EPN and CHIPS, ensuring confidentiality and portability across banking relationships.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If account numbers and banking information are shared for electronic payments, then payment processing efficiency is improved, but security and confidentiality of account information deteriorates
Solution Approach 1:
The patent introduces a payment identification code (PIC) as an intermediary that masks the actual account number and banking information. The PIC serves as a mediator between the payer and payee, allowing payment processing to occur without exposing sensitive account details. The system translates the PIC into the actual account information through a trusted third-party clearinghouse, thereby maintaining security while enabling efficient electronic payment processing.
2Reliability
If account numbers are kept confidential to maintain security, then security is improved, but the ability to process electronic payments deteriorates
Solution Approach 1:
The patent creates a functional copy of the account identification mechanism by introducing the payment identification code (PIC). Instead of using the actual account number directly, the system uses a copied identifier that contains the necessary payment routing information without revealing the sensitive account details. This copy enables electronic payment processing while preserving the confidentiality of the original account information.
3Reliability
If traditional paper-based payment systems are used to maintain confidentiality, then security is improved, but processing efficiency and automation deteriorate
Solution Approach 1:
The patent replaces the mechanical paper-based payment system with an electronic system that uses the payment identification code (PIC). Instead of physically mailing checks and payment coupons, the system electronically transmits payment instructions containing the PIC. This substitution maintains confidentiality through the masking mechanism of the PIC while dramatically improving processing speed and enabling automation through electronic data interchange between banks and clearinghouses.
Data Source
AI summary
A method comprises receiving a payment instruction including a payment system routing number and a unique code associated with a payee, and employing the routing number to determine whether it includes routing information for a specific financial institution. If so, then the payment instruction is transmitted based on the routing number. The transmitted payment instruction includes the unique code associated with the payee. If the routing number is determined to not include routing information for a specific financial institution, then account identification information of the payee and a first system routing number are retrieved based on the unique code, and the unique code included in the payment instruction is replaced with the retrieved account identification information, and the routing number is replaced with the retrieved first system routing number. The payment instruction with the account identification information is transmitted to the payee and/or a financial institution associated with the payee.