Payment Intermediary System for Escrow-Based Transaction Security
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Solution Overview
Problem
Consumers are hesitant to use new electronic commerce sites or engage with new services due to trust issues regarding the quality of goods or services, as they lack assurance of payment security and satisfaction guarantees.
Innovation Solution
A payment intermediary system that processes electronic transactions by splitting the order value into two portions, where an initial portion is paid to the merchant upon order placement, and the remaining portion is held until the customer provides feedback on satisfaction, allowing for partial or full refund if unsatisfied, based on predefined ratios or review ratings.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If a new electronic commerce site offers goods and services without physical presence, then consumer choice and accessibility are improved, but consumer trust and payment security deteriorate
Solution Approach 1:
The patent introduces a payment intermediary system that acts as a mediator between customer and merchant. The intermediary holds the payment amount in escrow and releases it to the merchant only after the customer confirms satisfactory receipt of goods or services, thereby building consumer trust in new e-commerce platforms without physical presence
Solution Approach 2:
The system performs preliminary actions by capturing and holding the payment amount before the transaction is completed. The payment is authorized and held in the intermediary's account, ensuring funds are secured before goods or services are delivered, which enhances consumer confidence in online transactions
2Reliability
If full payment is required upfront, then merchant revenue assurance is improved, but consumer risk and hesitation worsen
Solution Approach 1:
The patent segments the payment process into distinct phases: (1) payment authorization and holding in intermediary account, (2) goods/service delivery, (3) customer confirmation, and (4) final settlement to merchant. This segmentation allows merchant revenue assurance through pre-authorized funds while reducing consumer risk by releasing payment only after satisfactory delivery
Solution Approach 2:
The payment intermediary serves as a mediator that temporarily holds the payment amount, protecting both parties. The merchant has assurance that funds are secured and will be released upon customer confirmation, while the consumer is protected from paying full amount before receiving satisfactory goods or services
3Reliability
If payment is held until customer confirmation, then consumer protection is improved, but transaction time and merchant cash flow worsen
Solution Approach 1:
The system performs preliminary payment authorization and holds funds in the intermediary's account immediately upon transaction initiation. This preliminary action ensures consumer protection through confirmed payment while minimizing delay, as the funds are already secured and only require final release upon customer confirmation rather than requiring a new authorization process
Data Source
AI summary
An apparatus for processing electronic payment transactions is provided. The apparatus includes a computer processor and a data storage device, the data storage device having an incoming and an outgoing transaction initiation module including non-transitory instructions operative by the processor to receive an order indication at a payment intermediary server, the order indication indicating an order by a customer having an order value amount, initiate a transaction from an account associated with the customer to an intermediary account for the order value amount, initiate a transaction from the intermediary account to an account associated with the merchant for a first portion of the order value amount, receive an order feedback indication, and initiate a further transaction or further transactions in response to the order feedback indication to transfer the second portion of the order value amount to the account associated with the merchant and/or the account associated with the customer.