QR Code Payment System Reducing POS Terminal Infrastructure Costs
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Solution Overview
Problem
Merchants face high costs and complexity in implementing infrastructure for accepting electronic funds transfers (EFTs) at the point of sale, similar to traditional POS terminals.
Innovation Solution
A cost-effective payment system that enables EFTs through a mobile device-based solution where consumers scan a QR code to initiate transactions, using a payment services provider to facilitate the transfer between the consumer's and merchant's banks, eliminating the need for expensive POS terminal integration.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If merchants implement traditional POS terminal infrastructure for EFT, then payment acceptance capability is achieved, but infrastructure cost increases
Solution Approach 1:
The patent introduces a payment service provider as an intermediary that operates a scanning device and server system. The scanning device captures images of payment instruments, and the server processes these images to initiate EFT transactions. This intermediary infrastructure replaces the need for merchants to deploy traditional POS terminals, significantly reducing infrastructure costs while maintaining reliable payment acceptance capability.
Solution Approach 2:
The patent replaces the mechanical/electronic POS terminal system with an optical-based system. Instead of using contact card readers or magnetic stripe readers, the system uses an imaging device to capture pictures of payment instruments (cards, checks, etc.). The server then uses optical character recognition and image processing to extract payment information and initiate transactions, eliminating the need for expensive POS hardware at merchant locations.
2Reliability
If merchants implement traditional POS terminal infrastructure, then EFT processing is enabled, but system complexity increases
Solution Approach 1:
The patent extracts the complex EFT processing functionality from the merchant's POS system and consolidates it into a centralized server operated by the payment service provider. The server handles image processing, payment instrument validation, bank communication, and transaction coordination. This centralization reduces system complexity at the merchant level while maintaining robust EFT processing capability.
Solution Approach 2:
The system enables self-service payment processing where the scanning device automatically captures payment instrument images, the server automatically processes these images to identify payment information, and the system automatically coordinates with banks to complete transactions. This automation reduces the need for complex merchant-side system integration and manual processing steps.
Data Source
AI summary
A transaction request is received. The transaction request includes a merchant identifier. The merchant identifier is for identifying a merchant. The merchant's banking details are appended to the transaction request. The transaction request, with the appended banking details, is transmitted to a user's bank. Confirmation is received that a transaction has been performed in accordance with the transaction request. A confirmation is transmitted to the merchant to indicate that the transaction has been performed.