Trusted Intermediary Payment Authorization System
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Solution Overview
Problem
Existing online payment systems require users to provide payment details for each merchant separately, increasing the risk of exposure and misappropriation of financial data, and lack direct relationships between merchants and card payment schemes, leading to inadequate consumer protection.
Innovation Solution
A method for processing payment authorization requests through a data communications network that identifies an issuing bank associated with a financial account holder, retrieves necessary transmission data, and generates payment authorization requests with a financial account identity, allowing for secure transmission to an acquiring bank, thereby reducing the risk of data separation and enhancing consumer protection.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If users provide payment details for each merchant separately, then merchants can process payments independently, but the risk of exposure and misappropriation of financial data increases
Solution Approach 1:
The patent introduces a trusted intermediary system that acts as a mediator between users and merchants. This system holds and manages users' financial account identities securely, allowing merchants to initiate payments without directly accessing users' payment details. The intermediary verifies user authorization and facilitates the payment transaction while keeping sensitive financial data protected from merchant exposure.
2Ease of operation
If merchants interact directly with card payment schemes, then transaction processing is simplified, but consumer protection and compliance with card scheme rules are inadequate
Solution Approach 1:
The trusted intermediary system serves as a compliance layer between merchants and card payment schemes. It ensures that all transactions adhere to card scheme rules and regulations by verifying authorization properly and maintaining audit trails. The intermediary handles the complexity of compliance requirements, allowing merchants to operate simpler systems while consumers receive enhanced protection through the intermediary's oversight.
3Reliability
If a centralized system manages all payment authorizations, then consumer protection is enhanced, but system complexity increases
Solution Approach 1:
The system is segmented into distinct functional components: the trusted intermediary system that manages authorization and security, the merchant systems that initiate transactions, and the card payment schemes that provide the underlying infrastructure. This segmentation allows each component to specialize in its function, reducing overall system complexity while maintaining strong consumer protection through the intermediary's centralized authorization management.
Data Source
AI summary
Embodiments of the invention provide a method of processing payment authorization requests for payment transactions to be conducted via a data communications network; the payment authorization requests are conducted as a result of orders by financial account holders via a plurality of different online merchant systems, and the financial account holders hold accounts with a plurality of different issuing banks. These embodiments of the invention provide a means of identifying an issuing bank from a plurality of issuing banks as one which is to be utilized in a given transaction and facilitate a user specifying, in real time in relation to the given transaction, a particular bank account that is to be used to deduct funds for that transaction.