Transaction Processing System Secondary Lender Authorization Routing
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Solution Overview
Problem
Current financing and loan processing systems face challenges in efficiently handling transactions, particularly in authorization and funding processes, especially when primary lenders decline requests, as they do not adequately utilize secondary lenders' evaluation criteria for credit risk and profitability.
Innovation Solution
A computer-implemented method that involves sending declined authorization requests from primary lenders to secondary lenders for evaluation and potential authorization, allowing for the posting of transactions and funding, while also enabling balance transfer processing and payment allocation between primary and secondary lenders based on a payment hierarchy.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If primary lenders alone handle authorization requests, then the authorization process is simple and quick, but the approval rate decreases and transaction efficiency is reduced
Solution Approach 1:
The patent introduces a secondary lender as an intermediary to handle authorization requests that are declined by the primary lender. The processing system acts as a mediator that automatically routes declined requests to secondary lenders based on payment hierarchy, enabling continued transaction processing without manual intervention and improving overall approval rates while maintaining system efficiency.
2Reliability
If multiple lenders are involved in evaluating each request, then the approval rate increases, but the processing time and system complexity increase
Solution Approach 1:
The patent implements preliminary action by pre-establishing payment hierarchies and lender preferences before authorization requests are submitted. The system pre-configures which secondary lenders will handle specific types of declined requests based on their evaluation criteria and profitability parameters. This preliminary setup allows for automatic, rapid routing of declined requests without requiring real-time negotiation or complex multi-lender evaluation processes.
Solution Approach 2:
The patent segments the authorization process into distinct stages: primary lender evaluation, automatic decline handling, and secondary lender evaluation. Each stage is independently configured with specific lender preferences and criteria. This segmentation allows the system to efficiently manage multiple lenders by dividing the workflow into manageable segments rather than requiring all lenders to evaluate every request simultaneously.
3Productivity
If declined requests are automatically sent to secondary lenders, then transaction efficiency improves, but the system complexity and coordination requirements increase
Solution Approach 1:
The patent implements feedback mechanisms where the processing system continuously monitors authorization outcomes, lender performance, and transaction patterns. Based on this feedback, the system automatically adjusts lender preferences, updates payment hierarchies, and optimizes the routing of declined requests. This feedback loop enables the system to adapt to changing conditions without increasing manual coordination complexity, maintaining efficiency while managing system complexity through automated learning and adjustment.
Data Source
AI summary
One embodiment of the present invention relates to a computer implemented method for transaction processing that includes: transacting for a first and a second transactions for at least one of: a purchase; and a cash advance; sending requests for authorization of the first and second transactions; declining, by a primary lender, the requests for authorization; evaluating the declined requests for authorization by a secondary lender; authorizing, by the secondary lender, the declined requests for authorization in the form of authorization approvals; communicating the authorization approvals by the primary lender; posting the transactions to a balance sheet of the secondary lender in the form of amounts due to the primary lender; funding the transactions by the primary lender; summing up one or more debits and one or more credits of the posted transactions of the secondary lender; and settling any amounts due between the primary and secondary lenders.