Value Porting System for Negotiable Instruments

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Solution Overview

Problem

Unbanked individuals face difficulties in efficiently converting negotiable instruments into cash for financial transactions due to the inconvenience of cash-based economies, necessitating systems that facilitate more efficient financial dealings.

Innovation Solution

A system and method for porting value from negotiable instruments, such as personal or payroll checks, to presentation instruments like stored value cards, involving information acquisition, communication with check processors and verification entities, and crediting accounts based on verification responses, with options for full or partial value transfer minus fees.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Ease of operation

If unbanked individuals use negotiable instruments for financial transactions, then they can participate in the financial system, but converting these instruments to cash is inconvenient and inefficient

Engineering Contradiction:

Improveconvenience of converting negotiable instruments to cashVSAvoidtime required to convert negotiable instruments to cash

Core Design Contradiction:

Ease of operationVSLoss of time

Solution Approach 1:

The patent introduces a presentation instrument (such as a stored value card or portable payment device) as an intermediary between the negotiable instrument and the financial transaction system. The presentation instrument can be loaded with value from the negotiable instrument and then used directly for transactions, eliminating the need to physically convert checks to cash while providing immediate transaction capability

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The patent replaces the mechanical process of physically cashing checks (visiting banks, waiting in line, receiving physical cash) with an electronic system where the presentation instrument communicates transaction data electronically. The system automatically verifies and processes transactions through electronic data exchange between the presentation instrument, verification entity, and financial institutions

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

2Reliability

If a check verification entity is contacted to verify the negotiable instrument, then the authenticity and value can be confirmed, but the process complexity increases

Engineering Contradiction:

Improveverification of negotiable instrument authenticityVSAvoidcomplexity of verification system

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent implements pre-verification of negotiable instruments by contacting the check verification entity in advance before the actual transaction occurs. The presentation instrument stores verification results or authorization codes obtained from this preliminary verification, allowing subsequent transactions to proceed without repeated verification steps, thus maintaining reliability while reducing operational complexity

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system incorporates feedback mechanisms where the check verification entity provides verification status and value confirmation back to the presentation instrument and user. This feedback loop ensures reliable verification while automating the process, reducing the need for complex manual verification procedures

Inventive Principle:

Principle #23Feedback

Data Source

PatentUS8286860B2Negotiable instrument to presentation instrument value porting systems and methods

Publication Date: 2012.10.16 MONEY NETWORK FINANCIAL LLC

AI summary

A method of porting value from a negotiable instrument to a presentation instrument includes acquiring information from the negotiable instrument, acquiring information from the presentation instrument, sending at least a portion of the information from the negotiable instrument to a check processor, receiving a message from the check processor that identifies whether the negotiable instrument has been associated with a Positive Pay File, and, based at least in part on the message from the check processor, determining an amount of value to credit to an account associated with the presentation instrument.