Programmatic Transaction Verification via OCR and Proxy APIs

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Solution Overview

Problem

Traditional ACH transfers in the financial transaction field are cumbersome, error-prone, and delayed due to the need for users to provide account number and routing number information, and the micro-deposit verification process, which can lead to financial repercussions and inefficiencies.

Innovation Solution

A system and method for programmatic verification of transactions that acquires institution account credentials, collects transaction information, and executes transactions between endpoints, leveraging account access to automate the transfer process, reduce errors, and expedite transactions through proxy accounts and multi-factor authentication.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Ease of operation

If traditional ACH transfer process is used requiring users to provide account number and routing number information, then users can complete fund transfers, but the process becomes cumbersome and error-prone

Engineering Contradiction:

Improveease of fund transferVSAvoidtransfer accuracy

Core Design Contradiction:

Ease of operationVSReliability

Solution Approach 1:

The patent introduces an intermediary system that automatically retrieves account information using OCR technology from user-provided documents (checks, statements). This intermediary layer eliminates the need for users to manually type account numbers and routing numbers, thereby reducing errors while maintaining ease of operation. The system acts as a mediator between the user's document and the banking system.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The system enables self-service by allowing users to simply upload or photograph their bank documents, and the system automatically extracts the necessary account information through OCR. This self-serve approach reduces manual data entry errors while keeping the process simple for users.

Inventive Principle:

Principle #25Self-service

2Reliability

If micro-deposit verification method is used to verify account ownership, then account security is improved, but significant delays are added to the transfer process

Engineering Contradiction:

Improveaccount verification securityVSAvoidtransfer time

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The patent performs preliminary verification by using OCR to extract and validate account information from official bank documents at the time of initiation. This preliminary action confirms account ownership and validity before the transfer, eliminating the need for post-initiation micro-deposit delays while maintaining security through document-based verification.

Inventive Principle:

Principle #10Preliminary action

3Productivity

If manual entry of account information is required, then users can initiate transfers, but errors occur leading to failed transfers and financial repercussions

Engineering Contradiction:

Improvetransfer initiation capabilityVSAvoidtransfer success rate

Core Design Contradiction:

ProductivityVSReliability

Solution Approach 1:

The patent replaces the mechanical process of manual data entry with automated OCR (optical character recognition) technology. The system captures images of bank documents and automatically extracts account numbers, routing numbers, and other necessary information, eliminating human typing errors while maintaining the ability to initiate transfers efficiently.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

4Reliability

If traditional verification processes are used, then account security is maintained, but user experience becomes slow and confusing

Engineering Contradiction:

Improveaccount ownership verificationVSAvoiduser experience quality

Core Design Contradiction:

ReliabilityVSEase of operation

Solution Approach 1:

The system introduces an intermediary OCR-based verification process that automatically validates account information from uploaded documents. This intermediary layer provides secure verification while delivering a smooth user experience by eliminating manual steps and providing clear, automated feedback on verification status.

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS20240354720A1System and method for facilitating programmatic verification of transactions

Publication Date: 2024.10.24 PLAID INC

AI summary

Systems and methods for programmatic access of a financial institution system. A normalized API request provided by an application system specifies user information corresponding to at least one account endpoint of an external financial institution system. Responsive to the request, at least one application proxy instance associated with the normalized API request is used to collect transaction information from a corresponding financial institution system by providing the financial institution system with a proprietary API request. The transaction information is included in at least one proprietary API response provided by the financial institution system. A normalized API response is generated based on the collected transaction information and provided to the application system. Each application proxy instance is constructed to simulate an application of the corresponding financial institution system on behalf of a user associated with the application proxy instance.