Prepaid Card Payment System with Activation Code Control
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Solution Overview
Problem
Current methods for transferring funds between payors and payees are inefficient, as they often require immediate payment from the payor, lack control for the payor after payment is sent, and are inaccessible to unbanked individuals, who face additional fees for receiving payments.
Innovation Solution
A system that allows a payor to send a pre-paid, initially inactive transaction account identifier to a payee, which can be funded using a credit card and activated only when the payee receives a matching activation code, enabling funds to be withdrawn from the payor's account as they are used by the payee.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If payment is made before goods or services are delivered, then the Payor has assurance of fund availability, but the Payor must rely on faith that the Payee will actually provide goods or services and may accrue interest charges
Solution Approach 1:
The system creates a pre-paid card account in advance and loads it with funds before the Payee receives or uses them. The Payor can control when the Payee accesses the funds through activation codes, allowing payment preparation without immediate fund transfer or interest accrual on the full amount.
Solution Approach 2:
The pre-paid card account acts as an intermediary between the Payor and Payee. Funds are transferred to this intermediate account rather than directly to the Payee, allowing the Payor to maintain control through activation codes while the Payee can access funds when needed without the Payor incurring immediate interest charges.
2Ease of operation
If a credit card is used to fund the payment, then the Payor can make payment without sufficient cash on hand, but the full amount is charged immediately causing interest accrual
Solution Approach 1:
Instead of charging the full credit card amount immediately, the system only charges the portion of funds that the Payee actually uses from the pre-paid card account. The Payor can fund the pre-paid account with a credit card without incurring full immediate charges, and only pays as funds are consumed by the Payee.
3Ease of operation
If payment is sent through postal service, then the Payor can send payment remotely, but unbanked recipients face additional fees to cash the payment
Solution Approach 1:
The pre-paid card account can be accessed through multiple channels including mobile phones, ATMs, and retail locations, making it universally accessible to unbanked individuals without requiring traditional bank accounts or check cashing services. The Payee receives the card identifier and can activate and use the funds at any location that accepts pre-paid cards.
4Adaptability or versatility
If PayPal system is used, then the Payor can send payment to any Payee with an e-mail address, but the Payee must register and provide bank account information which unbanked individuals cannot do
Solution Approach 1:
The system extracts the bank account requirement from the payment process. Instead of requiring the Payee to have a bank account for receiving payments, the system uses a pre-paid card account that can be funded remotely and accessed through alternative means such as mobile phones or retail locations, eliminating the registration and bank account barrier.
Data Source
AI summary
A method and system for making a payment is disclosed. In the method, a Payor can specify an account from which to withdraw funds for the payment and specify an activation code necessary to activate the payment. The payment can be sent to a Payee in the form of a pre-paid transaction account. The account will not be activated unless the Payee provides the activation code. Funds can be withdrawn from the account specified by the Payor either in full at the time the payment is made or are withdrawn as the Payee uses the transaction account to access the funds.