Payment-on-delivery transaction verification using pre-payment authorization codes
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Solution Overview
Problem
Current payment-on-delivery (POD) transaction methods are inconvenient and insecure, especially when handling substantial cash payments, and require cumbersome portable POS terminals, which are costly.
Innovation Solution
A method and apparatus using a server to withhold payment transaction processing until the cardholder confirms receipt of ordered merchandise, utilizing a pre-payment authorization code sent to the cardholder's communication device for verification, eliminating the need for a POS terminal and ensuring secure transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If cash is used for POD transactions, then payment security is improved, but courier safety and convenience deteriorate due to handling substantial cash
Solution Approach 1:
The patent replaces the mechanical cash handling system with an electronic payment system. The courier uses a mobile communication device to transmit authorization codes instead of physically handling cash, eliminating security risks associated with cash while maintaining payment security through electronic verification processes.
Solution Approach 2:
The patent introduces a server as an intermediary between the courier and the payment system. The server verifies authorization codes and processes payments remotely, allowing the courier to complete transactions without directly handling cash or carrying expensive POS terminals, thus improving both security and convenience.
2Reliability
If a portable POS terminal is used for credit card payments, then payment security is improved, but device complexity and cost increase
Solution Approach 1:
The patent extracts the payment processing functionality from the physical POS terminal and relocates it to a remote server. The courier's mobile device only needs to store and transmit authorization codes, while the complex payment processing, verification, and transaction management are performed by the server, eliminating the need for expensive portable POS terminals.
Solution Approach 2:
The patent uses the authorization code as a digital copy or representation of the payment authorization. Instead of requiring the physical presence of a POS terminal to process credit card information, the system uses transmitted authorization codes that can be verified by the server, achieving the same payment security function with simpler devices.
3Reliability
If payment account information is withheld by a third party server, then transaction security is improved, but transaction processing time increases
Solution Approach 1:
The patent implements preliminary action by having the cardholder provide payment account information and generate authorization codes before the actual delivery and payment transaction. The server stores these authorization codes securely, so when the courier arrives, the payment can be quickly verified and processed without requiring real-time card details or complex authentication, thus balancing security with speed.
Data Source
AI summary
A computer-implemented method for processing a payment-on-delivery (POD) transaction is provided. The method comprising (a) obtaining transaction information in respect of an order placed by a cardholder with a merchant, said transaction information comprising payment account information associated with the cardholder; (b) transmitting a pre-payment authorization code associated with the order to the cardholder; (c) receiving a payment authorization request from a communication device of the cardholder, said payment authorization request having been sent upon delivery of order merchandise, wherein the payment authorization request comprises a candidate pre-payment authorization code; (d) verifying the candidate pre-payment authorization code using the pre-payment authorization code; and (e) upon successful verification, transmitting a transaction request for effecting a payment from an issuing bank associated with the payment account, the transaction request comprising the payment account information. An apparatus is also proposed.