Service Fee Payment Processing System

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Solution Overview

Problem

Merchants face increased costs due to percentage-based transaction fees for payment card transactions, which can lead to higher prices for customers and limitations in pricing strategies, as they cannot differentiate between payment card and cash transactions.

Innovation Solution

Implementing a system that allows merchants to charge a flat service fee for transactions above a certain threshold, accompanied by a cash discount for cash transactions, thereby restructuring the fee structure to include a service fee and cash discount, which is applied independently of transaction type.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Ease of operation

If merchants accept payment cards, then payment convenience is improved, but transaction fees increase

Engineering Contradiction:

Improvepayment convenienceVSAvoidtransaction fees

Core Design Contradiction:

Ease of operationVSLoss of energy

Solution Approach 1:

The patent changes the fee structure parameter from a mandatory percentage-based model to a voluntary flat-fee model. Merchants can choose to offer a cash discount program where customers pay a flat service fee for card transactions, transforming the economic parameter from variable percentage to fixed amount, thereby reducing overall fee burden while maintaining payment convenience

Inventive Principle:

Principle #35Parameter changes

2Loss of energy

If merchants charge different prices for payment card and cash transactions, then transaction cost recovery is improved, but pricing flexibility is restricted

Engineering Contradiction:

Improvetransaction cost recoveryVSAvoidpricing flexibility

Core Design Contradiction:

Loss of energyVSAdaptability or versatility

Solution Approach 1:

Instead of charging extra for card transactions (traditional approach), the patent inverts the approach by offering a cash discount - customers pay less for cash transactions and the merchant recovers card transaction fees through the flat service fee charged to card users. This inversion restores pricing flexibility while ensuring cost recovery

Inventive Principle:

Principle #13The other way round (Inversion)

3Adaptability or versatility

If merchants offer cash discounts, then pricing flexibility is improved, but customer choice is limited

Engineering Contradiction:

Improvepricing flexibilityVSAvoidcustomer choice

Core Design Contradiction:

Adaptability or versatilityVSEase of operation

Solution Approach 1:

The system implements self-service by allowing customers to automatically choose their preferred payment method based on their own preferences and needs. The terminal provides both cash and card options with clear pricing, and customers independently make their decision without merchant intervention, thereby maintaining customer choice while enabling pricing flexibility

Inventive Principle:

Principle #25Self-service

Data Source

PatentUS8131619B1Service fee-based payment processing

Publication Date: 2012.03.06 VESELKA FAMILY PARTNERSHIP LLLP

AI summary

A computing device that includes a processor and a memory receives inputs including indications of a transaction amount and a type of transaction. It is determined whether the transaction amount exceeds a predetermined threshold. Further, it is determined whether the type of transaction is one of a cash transaction and a payment card transaction. If the type of transaction is a cash transaction and the transaction amount exceeds the predetermined threshold, a predetermined service fee is added to the transaction amount, and a predetermined discount is subtracted from the transaction amount.