Tag-Based Transaction Tracking for Ownership Transfer
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Solution Overview
Problem
There is a disconnect between the time ownership of goods shifts from the seller to the buyer and the time payment is made, as buyers are often unaware of the exact time and date of ownership transfer, especially in large-value transactions involving complex shipping arrangements.
Innovation Solution
A financial institution computing system that tracks the physical movement of goods using tags, allowing for incremental payments, credit extensions, and insurance adjustments based on the progress of the order, enabling payments to be made at specific milestones such as shipment, production, and delivery.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If payment is made only upon receipt of goods at buyer location, then buyer has control over payment timing, but ownership transfer and payment timing become disconnected causing inefficiency and lack of awareness for the buyer
Solution Approach 1:
The system implements automated tracking of goods using tags (GPS, RFID, barcodes) that provide real-time feedback on shipment location and status to both buyer and seller. This feedback mechanism ensures the buyer is immediately aware of ownership transfer events and shipment milestones, eliminating the information asymmetry and time disconnect between physical goods movement and payment triggering events.
2Adaptability or versatility
If payment is made only at delivery, then buyer protection is maximized, but seller faces extended credit risk and cash flow delays
Solution Approach 1:
The payment process is segmented into multiple milestone-based transactions rather than a single payment at delivery. The system divides the payment into portions triggered by different shipment events (e.g., shipment departure, arrival at intermediate locations, final delivery), allowing the buyer to retain protection while providing the seller with earlier partial payments that improve cash flow and reduce credit risk.
Solution Approach 2:
The payment schedule becomes dynamic and adaptable based on actual shipment progress tracked by the system. Rather than fixed payment terms, the system automatically adjusts payment timing and amounts based on real-time tracking data, allowing parties to negotiate flexible arrangements that balance buyer protection with seller cash flow needs while adapting to the actual logistics timeline.
Data Source
AI summary
Methods and systems of completing tracking-based transactions are disclosed. A financial institution computing system includes a customer database retrievably storing information relating to a plurality of financial accounts, a tag database retrievably storing information relating to a plurality of tags, a network interface circuit, and a transaction circuit. The transaction circuit receives a transaction request with at least one tag relating to an order of goods from a seller computing system. A transaction schedule is generated based on the transaction request and customer information in the customer database, and is stored in the tag database. The transaction circuit receives tag data corresponding to physical movement of the order of goods and performs at least one transaction pursuant to the transaction schedule based on received tag data.