Cross-Border Payment Routing for Compliance and Data Localization
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Payment companies face challenges in complying with diverse international laws and regulations for cross-border transactions, leading to potential fines, reputational damage, and loss of business due to non-compliance with AML laws, KYC requirements, PCI DSS, and sanctions.
Innovation Solution
A system and method that evaluates multiple international pathways for transaction processing and data storage, considering cost and latency factors, to identify an optimum pathway for international financial transactions, taking into account localization requirements of the transaction origination and destination countries, and selecting the best infrastructure for these processes.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If multiple international pathways are evaluated and compared based on cost and latency factors, then the reliability of transaction processing is improved, but the device complexity increases
Solution Approach 1:
The system segments the complex pathway evaluation into distinct functional modules: pathway identification module that discovers available routes, evaluation module that assesses cost and latency metrics, and selection module that chooses optimal pathways. This modular segmentation reduces overall system complexity while maintaining comprehensive evaluation capabilities for transaction processing compliance
Solution Approach 2:
The system performs preliminary evaluation of multiple pathways before actual transaction processing occurs. By pre-identifying and pre-evaluating available pathways based on cost and latency factors, the system establishes compliance reliability in advance, avoiding the need for complex real-time decision-making during transaction execution
2Adaptability or versatility
If multiple alternative pathways are identified and evaluated, then the adaptability of the system is improved, but the loss of time in pathway selection increases
Solution Approach 1:
The system evaluates a limited set of key pathways (partial action) rather than exhaustively analyzing all possible routes. By focusing evaluation on the most promising pathways based on initial routing criteria, the system maintains adaptability to select the best route while avoiding excessive time consumption that would result from evaluating every conceivable alternative pathway
Solution Approach 2:
The system performs preliminary filtering of pathways based on basic criteria before detailed evaluation. This preliminary action narrows down the candidate pathways to a manageable subset that requires full assessment, thereby maintaining adaptability in pathway selection while significantly reducing the time loss associated with evaluating all possible routes
Data Source
AI summary
A system and method for facilitating an international payment card-based or other financial transaction by evaluating multiple international pathways for transaction processing and data storage and identifying and using an optimum pathway between the origination and destination countries for these processes. The origination and destination countries are assigned country categories based on localization requirements for the transaction processing and data storage processes, and a first pathway is identified, evaluated based on relevant criteria, and scored. Alternative pathways through intermediate countries are similarly identified, evaluated, and scored. The evaluations and the resulting scores may be based on, e.g., available infrastructure and the financial and performance costs of using the available infrastructure. The scores are compared to identify the optimum path, and the optimum path is used to facilitate the international financial transaction. The transaction processing process and data storage process may involve the same optimum pathway or different optimum pathways.