Automatic Payment Method Selection System for Transaction Optimization
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Solution Overview
Problem
Customers face difficulties in determining the optimal payment method when transacting with vendors, as existing methods require manual inquiries and can be time-consuming, delaying transactions due to vendor-specific payment preferences and rules.
Innovation Solution
An automatic payment method selection system that receives payment preferences and data from both payors and payees, determining a payment composition based on cash holdings, available credit, and approved payment methods to execute payments efficiently, dissociating payment types from the composition.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If manual inquiries are used to determine optimal payment method, then vendor-specific payment preferences can be accommodated, but transaction time increases and efficiency decreases
Solution Approach 1:
The system pre-establishes payment profiles for both payors and payees containing their respective payment preferences and approved methods. When a transaction is initiated, these pre-stored profiles are automatically retrieved and matched, eliminating the need for manual inquiries and enabling instant determination of optimal payment methods while accommodating vendor-specific requirements.
Solution Approach 2:
The system enables automatic self-service matching of payment methods by comparing payor preferences with payee approved methods through algorithmic processing. The system autonomously determines the optimal payment composition without requiring manual customer-vendor communication, thereby reducing transaction time while maintaining adaptability to individual preferences.
2Adaptability or versatility
If multiple payment methods are offered to accommodate preferences, then customer and vendor satisfaction improves, but system complexity increases
Solution Approach 1:
The system segments the payment determination process into distinct modular components: payor profile management, payee profile management, preference matching algorithms, and payment composition generation. Each component handles a specific aspect of the complex matching process independently, making the overall system more manageable and maintainable while supporting multiple payment methods.
Solution Approach 2:
The system employs a universal payment processing framework that can accommodate multiple payment types (cash, credit, ACH, checks) through a single integrated platform. The modular architecture allows the same core system to handle diverse payment methods by simply retrieving different pre-stored preferences from profiles, avoiding the need for separate specialized systems for each payment type.
3Productivity
If automatic payment selection is implemented, then transaction speed increases, but ability to accommodate specific vendor rules decreases
Solution Approach 1:
Vendor-specific rules and approved payment methods are pre-configured and stored in the payee's profile during setup. When automatic payment selection is executed, the system instantly retrieves these pre-stored rules and applies them to the current transaction, achieving both high processing speed and accurate accommodation of vendor-specific requirements without real-time communication.
4Device complexity
If payment composition is tightly coupled with payment type, then processing is simpler, but flexibility to optimize payment method selection is reduced
Solution Approach 1:
The system separates payment composition (the breakdown of payment amounts across different funding sources) from payment type (the specific payment instruments used). This segmentation allows the system to independently optimize the payment composition based on cash holdings and credit availability, then map it to appropriate payment types that satisfy vendor requirements, achieving both flexibility and controlled complexity.
Data Source
AI summary
A system for providing a payment includes a processor and a memory configured to cause the system to receive a payment request representative of a payment amount, a payor identification, and a payee identification. The system includes means for determining payor cash holdings and payor available credit as well as authenticating the validity of a payment request and identity of the payor via received biometric data from a payor device. The system may further receive data representative of payee approved payment methods and determine a payment composition based on the payment amount, payor payment preferences, payor cash holdings and payor available credit. Based on the payee approved payment methods, the system may determine one or more payment types. The system may convey the payment amount to the payee in the form of one or more payment types and may fund the payment amount according to the payment composition.