Token-Based Payment Network for Secure Fund Transfers
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Solution Overview
Problem
Current payment systems rely heavily on cash, checks, credit cards, and debit cards, lacking enhanced mechanisms for facilitating payments between individuals and businesses, particularly across different banking institutions.
Innovation Solution
A computer-implemented payment processing method and system that uses a public identifier to determine a private identifier for recipients, enabling secure fund transfers without disclosing financial account information, utilizing a network to manage tokens and configure transfer attributes through a rules engine.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional payment systems (cash, checks, credit cards) are used, then payments can be made between individuals and businesses, but financial account information must be disclosed and security risks increase
Solution Approach 1:
The system segments the identification process into two distinct parts: a public identifier (token) that is shared and a private identifier that remains confidential. The public identifier is used for payment initiation while the private identifier is never disclosed to recipients or merchants, thus protecting financial account information while enabling secure payments
Solution Approach 2:
The patent introduces an intermediary token system that mediates between the payer and payee. Instead of directly sharing account information, the system uses tokens as intermediaries that represent the payer's account without revealing it. The token acts as a secure intermediary that enables payment processing while maintaining privacy
2Adaptability or versatility
If a centralized account system is used to manage payments across different banking institutions, then payment versatility increases, but system complexity increases
Solution Approach 1:
The system implements a universal token-based identification framework that works across multiple banking institutions and payment networks. The same token mechanism can be used for person-to-person payments, person-to-merchant payments, and cross-institution transfers, providing multi-functionality without requiring institution-specific systems
Solution Approach 2:
Instead of requiring direct access to complex banking systems, the patent creates simplified token copies that represent account information. These tokens can be transmitted and processed independently of the underlying complex banking infrastructure, reducing system complexity while maintaining versatility
3Speed
If direct account information sharing is used for fund transfers, then transfer speed increases, but security risks and fraud potential increase
Solution Approach 1:
The system performs preliminary authentication and token generation before the actual payment transaction. The public identifier is pre-established and verified, allowing rapid payment processing without real-time account verification. This preliminary action enables fast transfers while maintaining security through pre-validated tokens
Data Source
AI summary
A method for facilitating real time transfer of funds from a sender to a recipient includes receiving an expedited funds transfer request from the sender having a first account at a first financial institution, the recipient having a second account at a second financial institution, the first and second financial institutions being members of a computer-implemented payment network including a plurality of member financial institutions; and sending a message to the second financial institution to deposit funds into the second account, wherein the second financial institution deposits funds into the second account, and wherein the first financial institution settles with the second financial institution after the second financial institution deposits funds into the second account.