Point-of-Sale Financing via Transaction Data Analysis
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Solution Overview
Problem
Buyers often face situations where they lack sufficient funds to purchase items at a merchant's point-of-sale location, leading to potential sales losses and the need for repeated visits, as existing financing solutions are not readily available or convenient at the time of purchase.
Innovation Solution
A distributed system that enables real-time financing for buyers by using machine learning to analyze buyer purchase behavior and merchant POS information, providing a user interface for financing requests, and offering custom financing terms based on past transactions, allowing for immediate pre-underwriting and financing approval at the point of sale.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If traditional financing solutions are used, then buyers can obtain funds for purchases, but the process is not convenient or available at the point of sale
Solution Approach 1:
The system performs preliminary underwriting and financing approval actions before the buyer reaches the point of sale or while still at the merchant location. By analyzing purchase behavior and pre-approving financing in advance, the system eliminates the need for time-consuming approval processes at the moment of purchase, enabling immediate transaction completion.
Solution Approach 2:
The patent introduces a payment processing service as an intermediary between buyers and merchants that provides integrated financing capabilities. This intermediary analyzes transaction information, determines financing eligibility, and provides funds through the payment system itself, rather than requiring separate traditional financing channels, thereby streamlining the process and making it available at point of sale.
2Productivity
If buyers wait until they have sufficient funds, then they can make purchases, but merchants lose potential sales and buyers must return later
Solution Approach 1:
The system performs preliminary financing approval based on pre-collected transaction information and purchase behavior analysis. This allows buyers to have financing already approved before reaching the point of sale or while still browsing, ensuring that funding is available immediately when the purchase decision is made, thereby preventing sales losses and eliminating the need for future return visits.
Solution Approach 2:
The payment processing service automatically analyzes transaction information, determines financing eligibility, and provides funding without requiring manual intervention from buyers to seek separate financing arrangements. The system serves itself by using its own transaction data to provide financing, making the process seamless and immediately available at point of sale.
Data Source
AI summary
In some examples, a payment processing system may receive, from a plurality of merchant POS terminals, transaction information of transactions performed between a plurality of merchants and a plurality of buyers. Further, the system may receive, from a first buyer, a request to finance a purchase of an item at a first merchant. The system may determine, based at least in part on the transaction information, financing terms for the first buyer for purchasing the item from the first merchant, the financing terms may include an approved financed amount for making the purchase from the first merchant. The system may receive an acceptance of the terms from the buyer and may generate a payment code associated with the financing terms and the first merchant that enables the customer to finance the purchase with the first merchant, such as at a POS terminal of the first merchant.