Proxy Guarantor Payment Transaction Processing

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Solution Overview

Problem

Existing systems do not provide an efficient solution for users to conduct payment transactions with merchants who only accept specific payment types, as users lacking the correct payment device are unable to initiate transactions using alternative payment types.

Innovation Solution

A method and system that utilizes a proxy guarantor, where a user's payment device of an unaccepted type is associated with a guarantor's payment device of an accepted type, allowing the transaction to be authorized and settled using the guarantor's device, enabling transactions with merchants that do not accept the user's payment type.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If a user uses a payment device of a payment type not accepted by the merchant, then the user can initiate payment transactions, but the transaction cannot be processed because the merchant does not accept that payment type

Engineering Contradiction:

Improvepayment type compatibilityVSAvoidtransaction processing success

Core Design Contradiction:

Adaptability or versatilityVSReliability

Solution Approach 1:

The patent introduces a proxy guarantor as an intermediary entity between the user and the merchant. The proxy guarantor holds a payment device of a type accepted by the merchant and acts as a mediator to facilitate the transaction. The system substitutes the user's non-compatible payment device with the proxy guarantor's compatible payment device, allowing the transaction to proceed successfully while still charging the user's account.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Ease of operation

If the system processes a payment transaction using the user's payment device, then the transaction can be authorized, but settlement fails when the merchant does not accept that payment type

Engineering Contradiction:

Improvetransaction initiationVSAvoidtransaction completion rate

Core Design Contradiction:

Ease of operationVSProductivity

Solution Approach 1:

The patent segments the payment process into two distinct phases: authorization and settlement. During authorization, the system uses the proxy guarantor's payment device to ensure compatibility with the merchant. During settlement, the system charges the user's account while using the guarantor's device for the actual transaction processing. This segmentation allows each phase to optimize for its specific requirements.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The proxy guarantor serves as an intermediary that bridges the gap between the user's payment preferences and the merchant's acceptance requirements. The system maintains the user's financial responsibility while using the guarantor's compatible payment device to ensure transaction completion, thereby improving the overall transaction completion rate.

Inventive Principle:

Principle #24Intermediary (Mediator)

3Device complexity

If the system requires the user to have a payment device compatible with the merchant, then transaction processing is straightforward, but users without compatible devices are excluded from accessing merchants

Engineering Contradiction:

Improvepayment device requirementsVSAvoidmerchant accessibility

Core Design Contradiction:

Device complexityVSAdaptability or versatility

Solution Approach 1:

The proxy guarantor system creates a universal access mechanism where users without compatible payment devices can still access merchants by leveraging the guarantor's compatible device. The guarantor's payment device serves multiple functions: it authorizes transactions, ensures compatibility with the merchant's payment system, and enables settlement. This multi-functionality expands merchant accessibility to users with diverse payment device needs.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Data Source

PatentUS11556904B2Method, system, and computer program product for processing a payment transaction via a proxy guarantor

Publication Date: 2023.01.17 VISA INTERNATIONAL SERVICE ASSOCIATION

AI summary

A method for processing a payment transaction via a proxy guarantor includes: receiving a transaction request between a user and a merchant including payment device data associated with a payment device of the user of a payment type not accepted by the merchant, and an indicator causing the payment transaction to be processed as a proxy guarantor transaction; identifying a guarantor associated with the user having a payment device of a payment type accepted by the merchant; communicating an authorization request to an issuer system associated with the guarantor to cause the issuer system of the guarantor to authorize the payment transaction; receiving an authorization response from the issuer system of the guarantor, the authorization response including a payment transaction approval indicator; and communicating a settlement request to an issuer system of the user.