Transfer Account System for Prioritized ACH Deposit Routing

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Solution Overview

Problem

Current financial systems fail to ensure timely and prioritized payments from automatic deposits, leading to risks of non-payment and increased fees for both creditors and customers, particularly in cases where employment status changes or funds are redirected.

Innovation Solution

Implementing a transfer account system that intercepts and prioritizes automatic deposit funds for immediate use in loan or bill payments, allowing customers to access only surplus funds after prioritized payments have been made, using Automated Clearing House (ACH) transactions and computer-implemented methods to manage and process these payments.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Loss of energy

If banks process larger items early in the day to generate more overdraft fees, then bank revenue increases, but customer payment reliability deteriorates

Engineering Contradiction:

Improveoverdraft fee revenueVSAvoidpayment reliability

Core Design Contradiction:

Loss of energyVSReliability

Solution Approach 1:

The system performs preliminary actions by intercepting automatic deposit funds immediately upon arrival and making prioritized payments before funds become accessible to customers. This preemptive approach ensures payments are made reliably while preventing overdraft conditions, resolving the contradiction between payment reliability and fee generation.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The patent introduces an intermediary system (the transfer account and processing system) that sits between the automatic deposit source and the customer's accessible funds. This intermediary intercepts funds and directs them to prioritized payments, eliminating the need for banks to generate overdraft fees while ensuring reliable payment processing.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Ease of operation

If customers access funds immediately upon deposit, then customer liquidity improves, but payment timing reliability deteriorates

Engineering Contradiction:

Improvefund accessibilityVSAvoidpayment timing reliability

Core Design Contradiction:

Ease of operationVSReliability

Solution Approach 1:

The system segments deposit funds into two distinct portions: prioritized payment funds (intercepted immediately for reliable payment processing) and accessible funds (remaining balance available to customers). This segmentation allows both customer liquidity and payment timing reliability to be maintained simultaneously.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The transfer account system acts as an intermediary that automatically divides incoming deposits between prioritized payments and customer accessible funds. This intermediary mechanism ensures that customers can access their funds while payments are made reliably at the appropriate timing.

Inventive Principle:

Principle #24Intermediary (Mediator)

3Adaptability or versatility

If banks allow customers to manage their own budgets and schedules, then customer autonomy improves, but payment timeliness deteriorates

Engineering Contradiction:

Improvecustomer autonomyVSAvoidpayment timeliness

Core Design Contradiction:

Adaptability or versatilityVSLoss of time

Solution Approach 1:

The system enables self-service by allowing customers to autonomously determine their budget allocations and payment schedules through the interface, while the system automatically executes the time-sensitive intercept and payment functions. This combines customer autonomy with system-driven timeliness.

Inventive Principle:

Principle #25Self-service

Solution Approach 2:

The system performs preliminary actions (intercepting funds and processing prioritized payments) automatically based on customer-preferred schedules. This eliminates the time loss associated with manual customer actions while preserving customer autonomy in setting preferences.

Inventive Principle:

Principle #10Preliminary action

4Reliability

If employers make loan payments directly from payroll, then payment reliability improves, but system complexity increases

Engineering Contradiction:

Improvepayment reliabilityVSAvoidsystem complexity

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent introduces a financial institution intermediary that handles the complex intercept and payment processing, eliminating the need for direct employer involvement. This intermediary absorbs the system complexity while maintaining payment reliability, and customers retain control over their financial data.

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS10706397B2Transfer account machine, non-transitory computer medium having computer program, and associated computer-implemented method

Publication Date: 2020.07.07 PATHWARD NAT ASSOC

AI summary

Embodiments of the present invention include transfer account machines, computer program products, and associated computer-implemented methods of providing prioritized payments from the proceeds of automatic or direct deposits. Embodiments of the present invention include routing automatic deposit information to a financial institution computer managing a prioritized payment program and formulating an outgoing file with both an entry for an automatic deposit destined for a customer account and an entry for a pre-authorized prioritized payment to a select creditor, so that the automatic deposit is credited to the customer account and relatively instantaneously any prioritized payment is debited from the customer account. According to embodiments of the present invention, the customer account can be a prepaid card account so that a customer has effective access on the prepaid card only to a net value of funds.