Automated Payment Management System with Intermediary Validation
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Solution Overview
Problem
Existing finance methods and account payable departments face labor-intensive and costly processes when managing large numbers of one-time payments, necessitating a system for quick and convenient electronic payment management.
Innovation Solution
A system that includes a database with multiple modules for managing payments over a communication network, featuring a notification module, payee module, payment process module, and other functionalities like customizable payment summaries, verification, and encryption, to automate and streamline payment processes between senders and financial institutions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Extent of automation
If manual payment processing is used, then payment security and control are maintained, but labor intensity and processing costs increase significantly
Solution Approach 1:
The patent introduces a financial institution as an intermediary between the sender and payee to handle payment processing. The financial institution module receives payment requests, validates beneficiary details, and executes payments through their existing infrastructure, thereby automating the process without requiring the sender to build complex payment processing capabilities from scratch.
Solution Approach 2:
The system enables self-service through automated workflows where the sender initiates a payment request with beneficiary details, and the system automatically processes validation, notification, and payment execution without requiring manual intervention at each step. The financial institution's existing systems also operate autonomously to complete transactions.
2Productivity
If electronic payment systems are implemented, then processing speed and efficiency improve, but labor intensity in setup and reconciliation remains high
Solution Approach 1:
The system performs preliminary actions by pre-validating beneficiary details against the financial institution's database before payment execution. The notification module sends advance notifications to payees about incoming payments, allowing them to prepare accordingly. This reduces last-minute reconciliation work and speeds up overall processing.
Solution Approach 2:
The system implements feedback mechanisms where payment status updates are automatically transmitted back to the sender and relevant parties. The financial institution module provides real-time feedback on payment processing status, enabling automatic reconciliation without manual intervention and reducing the time lost to verification tasks.
3Extent of automation
If automated payment systems are deployed, then labor costs decrease, but system reliability and security requirements increase
Solution Approach 1:
The financial institution acts as a trusted intermediary that leverages their existing security infrastructure, regulatory compliance frameworks, and established validation protocols. They verify beneficiary identities, validate account details, and ensure secure fund transfer, thereby maintaining high security standards without requiring the sender to implement complex security systems.
Solution Approach 2:
The system performs preliminary security checks by validating beneficiary details against the financial institution's authenticated database before payment execution. Encryption modules secure data transmission in advance, and verification processes confirm payment authority beforehand, preventing fraudulent transactions and ensuring system reliability.
Data Source
AI summary
Disclosed is a system and a method for communicating with a financial institution over a communication network to manage payments of payee initiated by a sender. The system includes a database for storing plurality of modules, a central server for monitoring and updating the plurality of modules, a processing unit processes the plurality of modules. The plurality of modules includes a notification module, a payee module and a payment process module. The notification module allows the sender to send a payment summary to each payee. The payee module allows the payee to upload payee's details in the central server, to select a mode of payment to receive the payment, to input banking details of the financial institution. The payment process module processes the payment as per the mode selected by the payee in the payee module, further processes the payment via cheque mode if the payee fails to update the mode of payment in a pre-defined duration.