Payment Service Aggregation for Transaction Cost Reduction
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Solution Overview
Problem
Online payment service providers incur significant transaction costs due to fees charged by financial institutions for each reimbursement transaction, especially when multiple transactions occur frequently.
Innovation Solution
A method where a payment service provider collects a cumulative reimbursement amount from a user's financial institution in a single transaction, rather than individual transactions for each purchase, thereby reducing the overall transaction costs by paying a fee based on this single transaction.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If the payment service provider collects reimbursement for each purchase separately from the financial institution, then the payment service provider can process transactions efficiently, but the transaction costs increase significantly due to multiple fees charged by the financial institution
Solution Approach 1:
The patent combines multiple separate reimbursement transactions into a single cumulative reimbursement transaction. Instead of processing each purchase reimbursement individually through the financial institution, the system aggregates all reimbursements due from a user's financial institution into one single transaction, thereby reducing the number of times fees are charged while maintaining complete payment processing functionality.
Solution Approach 2:
The patent implements preliminary tracking and accumulation of reimbursement amounts before the actual reimbursement transaction occurs. The system continuously monitors and accumulates the total reimbursement amount due from the user's financial institution, preparing the cumulative sum in advance so that when reimbursement is collected, it can be done in a single transaction rather than multiple separate transactions.
2Ease of operation
If the payment service provider uses financial institutions that charge higher fees for reimbursement, then the reimbursement collection process is simplified, but the transaction costs increase significantly
Solution Approach 1:
The patent merges multiple reimbursement transactions into a single cumulative transaction, which reduces the total number of times fees are charged to the payment service provider. This approach maintains the simplicity of using financial institutions for reimbursement collection while significantly reducing the overall cost impact of their fees by minimizing the frequency of transactions.
3Adaptability or versatility
If the payment service provider processes multiple small purchases frequently, then the service remains responsive to user needs, but the cumulative transaction costs from financial institution fees become significant
Solution Approach 1:
The system performs preliminary accumulation of reimbursement amounts as purchases occur, maintaining accurate tracking of the cumulative sum without immediately processing transactions. This allows the service to remain responsive to user purchasing needs while deferring the actual reimbursement transaction until a cumulative amount is ready, thereby reducing the frequency of fee-charging transactions.
Solution Approach 2:
The patent combines multiple small purchase reimbursements into a single cumulative reimbursement transaction. This approach maintains service responsiveness by accurately tracking all purchases while reducing the number of separate transactions with the financial institution, thereby minimizing cumulative fees charged for each individual purchase.
Data Source
AI summary
A method for providing on-line payment services is provided where a payment service provider pays for a plurality of purchases that are made by a user during a plurality of on-line shopping sessions. An authorization is received for the payment service provider to collect a reimbursement amount from a financial institution of the user. The reimbursement amount is at least equal to a cumulative amount of the payments for the plurality of purchases made by the user during the plurality of on-line shopping sessions. The payment service provider collects the reimbursement amount in a single transaction from the financial institution of the user and pays a fee to the financial institution of the user. The fee is based on the single transaction carried out to collect the reimbursement amount rather than being applied to each of the plurality of purchases or assessed as a percentage of the reimbursement amount, which allows the payment service provider to reduce the costs associated with providing payment services.