Virtual Micropayment Account Batching for Real-Time Approval
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Solution Overview
Problem
Conventional consumer payment systems incur high transaction costs and processing times, which are particularly problematic for micropayments under $10 and real-time transactions, such as in-game purchases, limiting their adoption.
Innovation Solution
A method where a transaction processor establishes a virtual micropayment account, locally approves micropayment requests, and accumulates them for batch approval by the issuer bank, reducing network traffic and processing time.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If conventional transaction systems are used for micropayments, then transaction security and reliability are maintained, but transaction costs become prohibitively high relative to the payment amount
Solution Approach 1:
The patent segments the transaction authorization process into two levels: (1) local approval by the transaction processor for individual micropayment requests, and (2) batch settlement with the issuer bank. This segmentation allows most micropayments to be approved locally without incurring full conventional transaction costs, while periodic batch settlements maintain security and reliability.
Solution Approach 2:
The system performs preliminary actions by pre-authorizing a virtual micropayment account at the transaction processor before actual payments are made. This preliminary setup enables rapid local approval of multiple micropayments without repeated bank authorizations, reducing costs while maintaining security through subsequent batch reconciliation.
2Reliability
If conventional transaction systems are used for micropayments, then proper authorization and verification are ensured, but processing time becomes too slow for real-time applications
Solution Approach 1:
The authorization process is segmented into immediate local approval by the transaction processor and deferred batch verification with the issuer bank. This allows real-time processing for user experience while maintaining security through periodic batch reconciliation, resolving the contradiction between speed and verification.
Solution Approach 2:
The transaction processor acts as an intermediary between the user and the issuer bank. It provides local approval capability for real-time processing while maintaining the security framework through batch settlements, serving as a mediator that balances speed and verification requirements.
3Measurement precision
If individual micropayment requests are processed through the issuer bank, then transaction accuracy is maintained, but network traffic and processing overhead increase significantly
Solution Approach 1:
The patent merges multiple individual micropayment requests into a single batch settlement transaction with the issuer bank. This combining approach maintains transaction accuracy through comprehensive verification while dramatically reducing network traffic and processing overhead compared to individual bank authorizations for each payment.
Solution Approach 2:
The system performs preliminary local approval of micropayment requests before batch settlement. This preliminary action filters and consolidates transactions that need bank verification, reducing the volume of network traffic to the issuer bank while maintaining accuracy through subsequent batch reconciliation.
Data Source
AI summary
A method is provided for processing micropayments. Micropayments are financial transactions involving relatively small financial amounts that can be difficult for conventional transaction processing systems to handle in a cost-effective and expeditious manner. The improved method uses a virtual micropayment account managed by a transaction processor. The limit of the virtual micropayment account may be adjusted with credit reduction requests and credit reset notices that are sent from the transaction processor to the issuer bank. The issuer bank may use the credit reduction requests and credit reset notices to adjust a temporary credit limit of the credit account from which the micropayments are to be made.