Direct POS-to-Phone RTP Authorization to Bypass Card Network Delays
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Solution Overview
Problem
Existing payment systems using debit and credit card networks introduce network delays, security risks, and incur fees, which are inefficient and costly for both customers and merchants.
Innovation Solution
A payment facilitator device enables direct communication between a user device and a point-of-sale device to authorize real-time payments (RTP) between customer and merchant financial institution accounts, bypassing traditional payment networks.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Speed
If traditional payment networks (debit/credit card networks) are used to process transactions, then transaction authorization and processing can be achieved, but network delays occur and transaction speed is reduced
Solution Approach 1:
The patent extracts the payment authorization function from the traditional payment network infrastructure and implements it directly between the user device and POS device through a payment facilitator. This removes the intermediate network processing steps that cause delays, allowing direct communication for transaction authorization while maintaining security through the facilitator's involvement in generating and verifying authorization codes.
Solution Approach 2:
The payment facilitator device serves as an intermediary that enables direct communication between the user device and POS device. It generates payment authorization codes, shares them with the POS device, and verifies transactions without requiring traditional payment network infrastructure, thus eliminating network delays while maintaining secure transaction processing.
2Reliability
If traditional payment networks are used, then transaction processing can be performed, but security risks for sensitive information increase
Solution Approach 1:
The patent extracts sensitive payment information from the traditional payment network transmission path and replaces it with localized security mechanisms. The payment facilitator generates authorization codes that are shared directly with the POS device, eliminating the need to transmit sensitive card information over external networks, thus reducing security risks while maintaining transaction reliability.
3Productivity
If traditional payment networks are used, then transaction processing can be achieved, but fees are incurred by customers and merchants
Solution Approach 1:
The patent extracts the transaction processing function from the fee-charging traditional payment network infrastructure and implements it through a payment facilitator system that operates without network fees. By using direct communication between user device and POS device with authorization code verification, the system eliminates intermediary fees while improving transaction efficiency through faster processing.
4Speed
If direct communication between user device and POS device is implemented, then network delays are reduced and transaction speed improves, but device complexity increases
Solution Approach 1:
The payment facilitator acts as a centralized intermediary that manages the complexity of direct communication between user devices and POS devices. It handles authorization code generation, distribution, and verification, allowing relatively simple user devices and POS devices to engage in fast direct communication without each device needing complex cryptographic and communication capabilities.
Data Source
AI summary
Systems and methods are disclosed for providing a payment authorization to a real-time payment (RTP) network to initiate an RTP between a customer financial institution account and a merchant financial institution account. One method performed by a payment facilitator device includes, based on a user device of a customer and a point-of-sale (POS) device of a merchant performing a direct communication regarding a transaction, receiving a payment request for a transaction amount of the transaction and receiving a customer authorization for the transaction. The payment facilitator then provides a payment authorization to an RTP network to initiate an RTP for the transaction amount of the transaction from a customer financial institution account to a merchant financial institution account, based on receiving the customer authorization for the transaction.