Smart Device Transaction Processing via Third-Party Provider

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Solution Overview

Problem

Existing systems for smart device communication and transaction processing are cumbersome and time-consuming, requiring users to manually input URLs, download applications, register accounts, and provide payment information, leading to high friction for both users and merchants.

Innovation Solution

A system and method that utilize a third-party provider to facilitate transaction processing, eliminating the need for merchant servers to handle payment processing, and employing dynamic machine-readable codes and software development kits (SDKs) for communication between smart devices and the third-party provider.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Ease of operation

If traditional transaction processing systems are used, then payment processing can be completed, but user friction and time consumption increase significantly

Engineering Contradiction:

Improveuser frictionVSAvoidtime consumption

Core Design Contradiction:

Ease of operationVSLoss of time

Solution Approach 1:

The system performs preliminary actions by pre-establishing trust relationships between merchants and third-party providers, and by implementing automated verification mechanisms before transactions occur. This eliminates the need for users to manually verify merchant credentials or payment details during each transaction, significantly reducing friction and time consumption.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

A third-party provider acts as an intermediary between merchants and users, handling payment processing, verification, and trust establishment. This intermediary absorbs the complexity of secure transaction processing, allowing users to complete purchases with minimal input while maintaining high security standards.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Device complexity

If merchants handle their own payment processing, then transaction control is maintained, but system complexity and costs increase

Engineering Contradiction:

Improvesystem complexityVSAvoidimplementation cost

Core Design Contradiction:

Device complexityVSEase of manufacture

Solution Approach 1:

The patent extracts the complex payment processing functionality from merchant systems and relocates it to specialized third-party providers. This separation allows merchants to maintain simple, focused e-commerce platforms while relying on experts for secure, compliant, and efficient payment handling, thereby reducing overall system complexity and implementation costs.

Inventive Principle:

Principle #2Taking out (Extraction)

Solution Approach 2:

Third-party providers offer universal payment processing solutions that can be integrated with multiple merchant systems through standardized interfaces. This multi-functionality allows a single provider to serve diverse merchants across different industries, reducing the need for each merchant to build and maintain their own complex payment infrastructure.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Data Source

PatentUS12217225B2System and method for smart device communication and transaction processing

Publication Date: 2025.02.04 PAYPAL INC

AI summary

Aspects of the present disclosure involve systems, methods, devices, and the like for transaction processing using a smart device. In one embodiment, a system and method are introduced which enable the use of a third-party provider in conjunction with the smart device. The third-party provider can enable transaction processing and offloading, eliminating the need for processing via an application server. In another embodiment, a dynamic machine-readable code is further introduced for providing the communication between the third-party provider and the smart device.