POS Tip Settlement Via Push-to-Card and ACH Rails

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Solution Overview

Problem

Retail establishments face challenges in providing immediate cash rewards to employees for credit card tips due to the lack of sufficient cash on hand, necessitating trips to bank branches and inefficient payment mechanisms.

Innovation Solution

A point of sale (POS) system that integrates with a payment system provider to instantly transfer funds from a merchant's account to an employee's account via various payment rails, including debit 'push to card', ACH batch payment, and third-party services like Zelle or Venmo, based on pre-set preferences or default settings.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Loss of time

If retail establishments use traditional cash handling to pay employee tips, then employees receive immediate cash rewards, but the establishment requires significant cash storage and frequent trips to bank branches

Engineering Contradiction:

Improvetime for employees to receive tipsVSAvoidcash handling system complexity

Core Design Contradiction:

Loss of timeVSDevice complexity

Solution Approach 1:

The patent replaces the mechanical cash handling system with an electronic payment system. The POS device electronically transfers tip amounts from the merchant account to employee accounts via payment processors, eliminating the need for physical cash storage, transport, and distribution while providing immediate electronic delivery of tips to employees.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Solution Approach 2:

The patent introduces payment processors as intermediaries between the merchant's POS system and employee bank accounts. These intermediaries (such as ACH networks, wire transfer systems, or real-time payment networks) facilitate the electronic transfer of tip funds, resolving the contradiction by providing immediate payment capability without requiring the merchant to handle physical cash.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Quantity of substance

If retail establishments include tip amounts in employee paychecks, then cash storage requirements are reduced, but employees do not receive immediate rewards for service

Engineering Contradiction:

Improvecash storage requirementVSAvoidtime for employees to receive tips

Core Design Contradiction:

Quantity of substanceVSLoss of time

Solution Approach 1:

The patent implements preliminary action by pre-configuring employee payment information and authorization in the POS system before the end of the shift. This allows the system to automatically and immediately transfer tip funds to employee accounts as soon as the shift ends, eliminating both the need for cash storage and the delay associated with paycheck processing.

Inventive Principle:

Principle #10Preliminary action

3Loss of time

If retail establishments store large amounts of cash on premises, then employee tips can be paid immediately in cash, but security risks and storage costs increase

Engineering Contradiction:

Improvetime for tip distributionVSAvoidsecurity risk of cash storage

Core Design Contradiction:

Loss of timeVSObject-affected harmful factors

Solution Approach 1:

The patent replaces the physical cash storage and distribution mechanism with an electronic fund transfer system. The POS device connects to payment processors that electronically move funds from the merchant account to employee accounts, eliminating the need to store, secure, or physically handle large amounts of cash while maintaining immediate tip distribution capability.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Data Source

PatentUS12443933B2Instant network cash transfer at point of sale

Publication Date: 2025.10.14 WELLS FARGO BANK NA

AI summary

Point of sale (POS) devices, systems, and methods disclosed herein enable payments by merchants to non-customers, such as to employees of the merchant. A point of sale system of the merchant determines an amount of a payment to be made by the merchant to the employee. The point of sale system transmits payment instructions for executing the payment to a payment system provider computing system. The funds are made available in a bank account of the employee instantly or near instantly.