Payment Processing System with Dynamic Payer Status Segmentation
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Solution Overview
Problem
Current electronic payment systems face challenges in maximizing user registration while protecting payment service providers from financial risk, as they often require credit history validation, are 'all or nothing' in registration, and do not offer varying levels of service or privilege, deterring potential users with poor or non-existent credit histories and those unwilling to disclose credit information.
Innovation Solution
A method that allows users to be assigned different payer statuses based on credit risk assessment, enabling immediate registration and payment direction within a single online session, with options for varying levels of service and privilege, and the ability to change statuses based on payment history or sponsor relationships, without requiring users to disclose extensive credit information.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If credit history validation is required for user registration, then provider financial risk is reduced, but user registration quantity decreases
Solution Approach 1:
The patent segments users into different categories (registered users with full privileges and unregistered users with limited privileges) based on their credit risk profiles. This allows the system to serve high-risk users without exposing the provider to unacceptable financial risk, thereby increasing overall user registration quantity while maintaining reliability for the provider.
Solution Approach 2:
The patent changes the parameter of user privileges from binary (registered/unregistered) to a spectrum of service levels. Unregistered users are granted limited privileges (e.g., payment amount caps, restricted payee selection) that scale with their credit risk profile, enabling registration of more users while controlling provider exposure through parameterized privilege adjustment.
2Measurement precision
If extensive credit information disclosure is required, then provider credit risk assessment accuracy improves, but ease of operation for users deteriorates
Solution Approach 1:
The patent applies partial action by requiring only the minimum necessary credit information from users to perform risk assessment. Instead of demanding extensive credit histories, the system collects sufficient data (e.g., basic identity verification, limited financial information) to categorize users into risk segments, thereby maintaining assessment accuracy while improving ease of operation.
3Reliability
If all-or-nothing registration is implemented, then provider control over financial risk is maintained, but adaptability of service levels decreases
Solution Approach 1:
The patent introduces dynamic service levels that adjust based on user behavior and credit risk assessment. Users start with limited privileges and can earn expanded access as they demonstrate reliable payment patterns. This dynamic adaptation allows the system to maintain risk control while providing versatile service levels that evolve with user trust.
Solution Approach 2:
The system changes service parameters (payment limits, approved payees, transaction speeds) based on user risk profiles and behavior. This parameterized approach enables fine-grained control over financial risk while providing adaptability in service levels, allowing the same platform to serve both high-risk and low-risk users with appropriate customization.
4Adaptability or versatility
If multiple payer statuses are assigned, then adaptability of payment options increases, but device complexity increases
Solution Approach 1:
The patent segments payer statuses into distinct categories (e.g., unregistered, registered, verified) with clearly defined privilege sets. This segmentation approach manages complexity by creating discrete, manageable status levels rather than continuous variations, making the system easier to implement while still providing adaptable payment options for different user types.
Data Source
AI summary
The present invention provides a method, system, and article of manufacture for providing payment services on a network. Information identifying a network user is received. The network user is assigned a payer status. A request to make a payment to a payee on behalf of the network user is received. If a first payer status is assigned to the network user, the payment will be made no matter the identity of the payee. If a second payer status is assigned to the network user, the payment will only be made if the payee is one of a group of payees that is not determined by the network user. With the second payer status, the network user can only direct payments to the group of payees. The payer status can be changed from one payer status to another payer status.