Real-time Virtual Account Fund Transfer via Dedicated Interface
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Solution Overview
Problem
Automated Clearing House (ACH) procedures introduce delays in transferring funds due to batch processing, which can take several days for funds to become available at the destination, making it inconvenient for bank customers, especially those who need immediate access to funds for business operations.
Innovation Solution
A system with a dedicated interface between a financial institution and an electronic payment service allows for real-time transfer of funds from a virtual account to a bank account, enabling funds to be available immediately while the transaction is pending, by validating transactions through data received from the electronic payment service and using processors to facilitate these transfers.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If batch processing procedures are used, then transaction volume can be handled efficiently, but funds availability time increases significantly
Solution Approach 1:
The patent segments the transaction processing into two distinct phases: a real-time authorization phase that provides immediate funds availability determination, and a subsequent batch settlement phase that handles the actual fund transfer. This segmentation allows the system to provide immediate customer service (real-time authorization) while maintaining efficient bulk processing (batch settlement), thereby resolving the contradiction between processing volume and funds availability time.
2Loss of time
If real-time fund transfer is implemented, then funds availability improves, but system complexity increases
Solution Approach 1:
The patent introduces an intermediary authorization mechanism that acts as a mediator between the real-time customer service system and the batch processing settlement system. This intermediary layer provides real-time funds availability checks and authorizations without requiring immediate actual fund transfers, thereby achieving real-time funds availability perception while maintaining the simplicity of batch processing infrastructure.
3Productivity
If dedicated interface with external payment service is added, then transaction validation efficiency improves, but system complexity increases
Solution Approach 1:
The patent implements a dedicated interface with the external payment service that serves multiple functions: real-time authorization validation, transaction status monitoring, and funds availability verification. By consolidating these multiple validation functions into a single universal interface, the system achieves high transaction validation efficiency without proportionally increasing system complexity, as the interface handles diverse validation requirements through a unified communication protocol.
Data Source
AI summary
According to some embodiments, a system comprises one or more processors associated with a financial institution. The financial institution provides a financial account for a user. The system also comprises a dedicated interface between the financial institution and an electronic payment service external to the financial institution. The electronic payment service provides a virtual account for the user. The one or more processors are configured to determine when the user requests a financial transaction to transfer funds from a source to a destination (one of which corresponds to the virtual account), validate the financial transaction based on data received from the electronic payment service over the dedicated interface, and transfer the funds to the destination. The funds are transferred prior to hard-posting such that the funds become available at the destination in real-time while the financial transaction is pending.