Sub-account Mechanism for Controlling Dependent Spending
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Solution Overview
Problem
Current systems lack a seamless and cost-effective integration of master direct deposit accounts (DDAs), sub-accounts, and merchant client accounts, limiting financial entities' ability to manage and control dependent spending, capturing cash-to-card payments, and optimizing payment transactions for eCommerce merchants.
Innovation Solution
A system that integrates companion cards with sub-accounts linked to a master DDA, allowing primary account holders to control spending and transfer funds between accounts, enabling real-time payment processing and reducing payment expenses for merchants, while keeping funds within the financial entity's banking system.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If traditional payment methods (cash, competitor credit cards) are used for dependent purchases, then dependents can make purchases at physical retailers and online, but financial entities are excluded from payment transactions and associated revenues
Solution Approach 1:
The patent segments the payment system into master accounts (held by parents/guardians) and sub-accounts (held by dependents), allowing financial entities to capture both funding and spending transactions within their own network, preventing revenue loss to competitors and cash transactions
2Ease of operation
If parents give dependents direct access to their DDA or credit card, then dependents can make online and physical purchases, but there are no controls on dependents spending activities
Solution Approach 1:
The patent creates separate sub-accounts for dependents with their own account numbers and debit cards, while maintaining master account oversight. This segmentation enables controlled spending capability for dependents while providing parents with monitoring and control features through the master account interface
Solution Approach 2:
The master account acts as an intermediary between the parent's funds and the dependent's spending activities. It provides the control mechanism needed to authorize, limit, and monitor dependent spending without requiring direct parent involvement in each transaction, balancing ease of operation with spending control
3Ease of operation
If prepaid cards or pooled accounts are used for dependents, then dependents can make controlled purchases, but it takes 2-3 business days to move money into these accounts through ACH transfer or credit card cash advance
Solution Approach 1:
The patent merges the funding and spending functions by allowing the master account (a checking account) to directly fund sub-accounts through instant electronic transfers within the same financial entity's network. This eliminates the 2-3 day ACH transfer delay and credit card cash advance time, providing immediate funding capability
4Productivity
If eCommerce merchants use traditional credit/debit card transactions for micropayments, then payments can be processed, but payment expenses are high
Solution Approach 1:
The patent introduces an intermediary account structure where merchants receive payments through sub-accounts funded by master accounts within the same financial entity network. This intermediary mechanism enables micropayment processing with reduced fees by keeping transactions within the financial entity's own network rather than using external credit/debit card processors
Data Source
AI summary
A system and method for controlling a monetary account with one or more sub-accounts is described. A monetary account with an entity is established and an account user associated with the monetary account is identified. A sub-account with the entity is established, where the sub-account is associated with the monetary account and includes monetary funds transferred from the monetary account. At least one sub-account user associated with the sub-account is identified, where the at least one sub-account user is different from the account user. One or more controls, placed by the account user, are established on at least one of the sub-account and the at least one sub-account user. The at least one sub-account user is restricted from accessing monetary funds in the monetary account and the account user is permitted to access the sub-account.