Scheduled Payment Transaction System with One-Time Password Authentication
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Solution Overview
Problem
Digital transactions are time-consuming and inconvenient, particularly for small amounts, leading users to prefer cash over digital payment methods due to the need for electronic devices, internet connectivity, and maintenance costs for POS devices, which hinders the adoption of cashless transactions.
Innovation Solution
A method and system for scheduling payment transactions between users, allowing for the initiation of scheduled payments using one-time passwords, enabling users to perform transactions at a later time without the need for constant device presence or internet connectivity, thereby streamlining digital payments.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If digital transactions are performed using traditional methods (smartphone, POS device, QR code, UPI link), then payment security and traceability are improved, but transaction time and operational convenience deteriorate
Solution Approach 1:
The system performs preliminary authentication and authorization actions during account setup and transaction initiation phases. OTPs are pre-configured for scheduled transactions, and merchant accounts are pre-validated, allowing rapid execution at the point of sale without repeated authentication steps.
Solution Approach 2:
The system enables automatic transaction processing through scheduled payments and OTP-based verification. Once configured, transactions execute automatically at predetermined times or triggers, reducing manual intervention and accelerating the payment process while maintaining security protocols.
2Reliability
If digital transactions require electronic devices and internet connectivity, then payment security is improved, but ease of operation and accessibility worsen
Solution Approach 1:
The system extracts the authentication and verification components from the transaction execution phase and places them in preliminary setup phases. OTPs are generated and stored in advance, allowing transactions to proceed without real-time internet connectivity or complex device interactions at the point of sale.
Solution Approach 2:
The system introduces OTPs as an intermediary verification mechanism that bridges security requirements and operational simplicity. The OTP serves as a pre-validated credential that eliminates the need for real-time connectivity, complex authentication protocols, or specialized hardware during the actual transaction.
3Adaptability or versatility
If merchants install and maintain POS devices for card-based payments, then transaction capability is improved, but operational cost and system complexity worsen
Solution Approach 1:
The system extracts the authentication and processing logic from merchant-side hardware (POS devices) and relocates it to the payment gateway and user's mobile device. This eliminates the need for merchants to install, maintain, and update complex POS infrastructure while preserving transaction capabilities through alternative verification methods.
Data Source
AI summary
A method and system for facilitating payment transactions is provided. A server receives a transaction scheduling request from a first user device for scheduling a payment transaction from a first payment account associated with a first user to a second payment account associated with a second user. The payment transaction is scheduled for a first time instance. Upon successful scheduling of the payment transaction, a one-time password for authenticating the scheduled payment transaction is communicated to the first user. The server receives a payment transaction request corresponding to the scheduled payment transaction from a second user device associated with the second user to approve the scheduled payment transaction. The scheduled payment transaction is approved upon successfully receiving the one-time password from the second user device.