Smart Contract Payment Dispute Settlement Across Blockchain Networks
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Solution Overview
Problem
Current payment transaction dispute resolution processes are cumbersome, lengthy, and costly, relying on payment networks with complex rules and increasing fraudulent claims, lacking transparency and standardization, and inefficiently managing transaction information flow.
Innovation Solution
A hyperledger-based system using smart contracts to manage payment transactions and disputes, enabling efficient, transparent, and standardized dispute resolution through multiple blockchain networks, each serving specific transaction functions, with inter-ledger communication protocols and smart contracts for dispute settlement.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If the payment network is used as an intermediary for dispute resolution, then dispute resolution can be achieved through established rules and processes, but the process becomes complicated, lengthy, and costly
Solution Approach 1:
The patent extracts the dispute resolution function from the traditional payment network intermediary and implements it directly on the blockchain through smart contracts. The system removes the need for payment network arbitration by enabling parties to resolve disputes autonomously through programmable contract logic that automatically executes based on predefined conditions, thereby eliminating the time-consuming intermediary process while maintaining reliable dispute resolution
Solution Approach 2:
The smart contract system enables parties to self-resolve disputes through automated contract execution. The dispute resolution process is handled autonomously by the blockchain system itself through programmed logic that automatically determines outcomes based on transaction data and predefined rules, eliminating the need for external payment network intervention and significantly reducing resolution time
2Reliability
If the payment network uses complex rules for dispute resolution, then comprehensive dispute scenarios can be covered, but the process becomes cumbersome and costly
Solution Approach 1:
The patent changes the fundamental parameter of dispute resolution from complex procedural rules to simple programmable contract conditions. Smart contracts encode dispute resolution logic directly in code, transforming abstract legal rules into executable parameters that automatically evaluate transaction data. This simplifies the process while maintaining comprehensiveness by covering all dispute scenarios through programmed conditional logic rather than cumbersome procedural rules
3Reliability
If multiple intermediaries are involved in transaction processing, then transaction security can be enhanced, but fraudulent and invalid claims increase
Solution Approach 1:
The patent removes intermediaries from the transaction process and replaces them with blockchain-based smart contracts. By extracting the intermediary function and implementing it through decentralized automated contracts, the system eliminates the human error and intentional fraud that occur in intermediary-mediated processes. The blockchain's immutable ledger and automated execution prevent fraudulent claims while maintaining security through cryptographic verification
Solution Approach 2:
The patent introduces a new type of intermediary - the smart contract - that acts as an automated mediator between parties. This intermediary is implemented as code rather than human operators, eliminating fraud while maintaining security. The smart contract automatically verifies transaction conditions, manages dispute resolution, and executes outcomes based on predefined logic, providing secure transaction processing without the harmful effects of human intermediaries
4Loss of information
If transaction information is shared among all parties, then transparency is improved, but confidential information may be inadvertently circulated
Solution Approach 1:
The patent applies local quality by enabling different visibility levels for different pieces of transaction information. The blockchain system stores all transaction data immutably for transparency, but smart contracts control access and visibility on a local basis - each party sees only the information relevant to their role and needs. This selective information disclosure maintains overall transparency while protecting confidential data from inadvertent circulation
Data Source
AI summary
Decentralized computer systems and methods are disclosed for hyperledger-based payment transactions, alerts, and dispute settlement, using smart contracts. One method includes: receiving transaction information comprising transaction data of transaction attributes for a transaction for a good or service originating at a merchant; storing the transaction data of the transaction attributes for the transaction, in a Smart Contract generated or updated by a Smart Contract application; deploying the Smart Contract into one or more blockchain networks, wherein at least one of the one or more blockchain networks; performing one or more iterations of enabling, using an inter ledger protocol, to transfer at least some of the transaction data of the transaction attributes of the transaction to another of the one or more blockchain networks, wherein each of the one or more blockchain networks serves one or more business functions of the transaction.