Secure Real-Time Payment Processing via Push-Based Mobile Transactions
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Solution Overview
Problem
The existing payment card transaction models, such as the pull-based payment model, incur significant transaction fees and liability for chargebacks, and expose consumer account information to potential theft, while lacking real-time payment capabilities and secure transaction processing.
Innovation Solution
A system and method for secure real-time payment transactions that allow consumers to initiate push-based payments directly from their financial institution to a merchant's account through a mobile device, using a transaction system that communicates with both financial institutions to authorize and execute payments, reducing intermediaries and enhancing security.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If a pull-based payment model is used, then merchants can process payments through acquirers and issuers, but transaction fees are significant and merchants are liable for chargebacks
Solution Approach 1:
The patent extracts the intermediary entities (acquirers and issuers) from the payment processing chain. Consumers directly initiate push-based payments from their accounts to merchant accounts through mobile devices, eliminating the need for pull-based payment processing through multiple intermediaries and their associated fees.
Solution Approach 2:
The patent inverts the traditional pull-based payment model by implementing a push-based payment model. Instead of merchants pulling payments through acquirers from consumer accounts, consumers push payments directly from their accounts to merchant accounts, fundamentally reversing the payment initiation direction and reducing intermediary involvement.
2Ease of operation
If a pull-based payment model is used, then payments can be processed through intermediaries, but consumer account information is exposed to third parties increasing theft risk
Solution Approach 1:
The patent extracts consumer account information from the payment processing flow. Consumers authenticate through mobile devices using biometric or other secure methods, and their account numbers are never exposed to merchants or intermediaries. The system processes payments using tokenized or encrypted account references stored securely in the mobile device.
Solution Approach 2:
The patent introduces a new intermediary layer in the form of mobile device software that acts as a secure mediator between consumer accounts and merchants. This intermediary handles authentication and payment initiation locally on the consumer's device, preventing exposure of sensitive account information to external parties while still enabling payment processing.
3Loss of energy
If push-based payment model is used, then consumers can initiate payments directly reducing fees, but real-time payment processing and secure transaction execution require complex system integration
Solution Approach 1:
The patent implements a universal payment system where a single mobile device application can initiate push-based payments across multiple merchants and financial institutions. The system provides multi-functional capabilities including authentication, payment initiation, transaction tracking, and account management within a single integrated platform, reducing the need for separate systems for different payment scenarios.
Solution Approach 2:
The patent incorporates real-time feedback mechanisms where the system provides immediate confirmation to consumers when payments are successfully initiated, and real-time notification to merchants when payments are received. This feedback loop enables real-time payment processing monitoring and ensures secure transaction execution through immediate verification and confirmation at both ends of the payment flow.
Data Source
AI summary
A method including receiving, at a mobile device being used by a consumer, a transaction code from a point-of-sale terminal at a store of a merchant. The transaction code can include a merchant public identifier being associated with the merchant, a payment amount for one or more items to be purchased from the merchant by the consumer in a transaction, a transaction identifier for the transaction, and a digital signature. The method also can include verifying the digital signature for the transaction code. The method additionally can include sending, from the mobile device, a request to pay the merchant for the payment amount from a first account of the consumer maintained by a first financial institution, such that the first financial institution, upon receiving the request to pay, retrieves from a transaction system an account identifier of a second account of the merchant maintained by a second financial institution based on the merchant public identifier, such that the first financial institution sends to the transaction system payment information regarding a payment to be made to the second account from the first account, such that the payment information is routed through the transaction system to the second financial institution, and such that the point-of-sale terminal receives a notification of payment for the transaction in real-time while the consumer remains at the store of the merchant. The transaction system can be maintained by an entity that is different from the merchant, the first financial institution, and the second financial institution. The payment information can include the transaction identifier, the account identifier of the second account, and the payment amount. Other embodiments are provided.