Transaction Processing Rules Engine for Payment Systems
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Solution Overview
Problem
Current electronic payment processing systems are complex and inefficient, particularly for merchants handling multiple payment types and brands, as they require managing various transaction rules, routing, fees, and risk management across multiple entities, making it difficult to define and implement new business relationships.
Innovation Solution
A method and system that establish and store rules for transaction processing between origination and destination entities, using a host computer system to identify parties and process transactions based on these rules, which include routing, fees, timing, settlement, dispute resolution, and risk sharing, enabling flexible and efficient processing of various transaction types.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If current electronic payment processing systems are used to handle multiple payment types and brands, then transaction processing capability is provided, but system complexity and difficulty in managing transaction rules increase
Solution Approach 1:
The system segments transaction processing by separating the core processing engine from the rules configuration. Different payment types and brands are handled through distinct rule sets that can be independently defined and managed, reducing the complexity of managing all transaction types within a single monolithic system.
Solution Approach 2:
The patent introduces an intermediary rules management layer between the transaction processing system and the various payment entities. This intermediary layer abstracts the complexity of multiple payment types and brands, allowing the core system to process transactions uniformly while rules configure the specific handling for each payment type.
2Adaptability or versatility
If multiple transaction rules are managed across multiple entities, then various transaction types can be processed, but difficulty in defining and implementing new business relationships increases
Solution Approach 1:
The system implements dynamic rule configuration where business relationships and transaction handling can be modified without changing the core processing system. New business relationships are defined by creating new rules or modifying existing ones, allowing the system to adapt to changing business needs dynamically.
Solution Approach 2:
The patent allows flexible parameter changes in transaction rules, enabling modification of routing, fees, timing, and settlement parameters for different payment types. This parameter-based configuration makes it easier to define new business relationships by simply changing parameters rather than reprogramming the entire system.
3Reliability
If traditional payment processing routing is used, then transactions can be routed through banks and networks, but transaction costs and processing fees increase
Solution Approach 1:
The system performs preliminary action by pre-configuring optimal routing rules and settlement parameters for different payment types and entities. This allows transactions to be processed through the most cost-effective routes without requiring complex real-time decision-making, reducing processing costs while maintaining reliability.
Solution Approach 2:
The patent uses copying by creating virtual representations of payment entities and routing paths. Instead of physically managing multiple complex routing relationships, the system creates copies of payment entity profiles and routing rules that can be selectively applied, simplifying cost management while maintaining processing reliability.
Data Source
AI summary
A method of processing a transaction involving at least two parties includes establishing rules that define transaction processing between combinations of a plurality of origination entities and a plurality of destination entities and storing the rules at a storage arrangement associated with a host computer system. The method also includes receiving at the host computer system transaction information relating to the transaction between the two parties. One of the parties is a particular one of the origination entities and one of the parties is a particular one of the destination entities. The transaction information contains at least an identifier from which at least one of the parties may be identified. The method also includes using the transaction information at the host computer system to identify at least one of the parties and consulting the storage arrangement to determine the rules that define transaction processing for the at least one party. The method also includes processing the transaction based, at least in part, on the rules.