Secure Real-Time Transaction System for Push-Based Payments
Find Innovative SolutionsGenerate Solutions
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 authentication mechanisms.
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 using a mobile device, leveraging a transaction system that authenticates and routes payments securely, reducing transaction fees and liability for fraudulent transactions.
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 significant transaction fees are incurred and merchants are liable for chargebacks
Solution Approach 1:
The patent extracts the intermediary entities (acquirers and issuers) from the payment processing chain by enabling direct peer-to-peer transactions between consumers and merchants. The system allows consumers to initiate push-based payments directly to merchants without requiring traditional card network intermediaries, thereby eliminating the transaction fees associated with pull-based models.
Solution Approach 2:
The patent introduces a new type of intermediary - a digital wallet system with push-payment capability - that enables direct transactions while removing the need for traditional acquirer-issuer relationships. This new intermediary structure allows merchants to receive payments directly without being subject to chargeback liabilities or high transaction fees.
2Ease of operation
If consumer account information is provided to third parties for payment processing, then payments can be processed, but account information becomes subject to theft
Solution Approach 1:
The patent extracts sensitive account information from the transaction process by using tokenization. Instead of sharing actual account numbers with merchants or third parties, the system uses unique transaction identifiers that cannot be reverse-engineered to reveal account information, thereby eliminating the theft risk while maintaining payment functionality.
Solution Approach 2:
The patent creates secure copies of account information in the form of tokens - digital representations that function identically to account numbers for transaction purposes but cannot be used to access the actual account. These tokens are single-use and cannot be reused, preventing theft and fraud.
3Loss of energy
If push-based payment model is used, then consumers can initiate direct payments reducing fees, but real-time authentication and routing mechanisms are required
Solution Approach 1:
The patent implements a universal digital wallet system that handles multiple functions - authentication, authorization, token generation, and transaction routing - within a single platform. This multi-functional approach consolidates what would otherwise require separate complex systems, making the push-based payment model feasible while managing complexity through integration.
Solution Approach 2:
The patent performs preliminary authentication and token generation before transactions occur. The digital wallet system pre-authenticates consumers and pre-generates secure tokens, so that when push-payments are initiated, the authentication and routing processes are already complete or can be executed rapidly, reducing the perceived complexity during actual transactions.
4Ease of operation
If traditional payment processing networks are used, then payments can be routed between financial institutions, but significant delays and intermediary fees occur
Solution Approach 1:
The patent extracts the payment routing function from traditional financial institution networks and implements it within a distributed digital wallet ecosystem. This allows direct peer-to-peer routing of payment instructions between consumers and merchants without requiring approval or processing through intermediary banks or card networks, dramatically reducing processing time from days to seconds.
Data Source
AI summary
A method including determining, at a point-of-sale terminal at a store of a merchant, a payment amount for one or more items to be purchased from the merchant by a consumer in a transaction. The method also can include generating a transaction code including a merchant public identifier, the payment amount, a transaction identifier for the transaction, and a digital signature. The method additionally can include providing the transaction code to a mobile device being used by the consumer, such that the mobile device verifies the digital signature and sends 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, and 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. 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 be routed through the transaction system to the second financial institution. The payment information can include the transaction identifier, the account identifier of the second account, and the payment amount. The method further can include receiving, at the point-of-sale terminal, a notification of payment for the transaction in real-time while the consumer remains at the store of the merchant. Other embodiments are provided.