Virtual Payment Account System for Merchant EFT Participation
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Solution Overview
Problem
Many businesses lack the financial ability to issue their own credit cards, leading to lost sales to competitors who have established their own credit card programs, hindering their participation in electronic funds transfers.
Innovation Solution
A virtual payment account system that allows merchants to participate in electronic funds transfers by associating with a third-party electronic payment medium issuer, enabling them to offer incentives and simulate a merchant credit card functionality, facilitating transactions between consumers and merchants.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If businesses issue their own credit cards to participate in electronic funds transfers, then their ability to conduct electronic transactions improves, but the financial cost and complexity of issuing credit cards increases
Solution Approach 1:
The patent introduces a third-party credit card issuer as an intermediary between the merchant and the payment network. The merchant partners with this intermediary to offer a virtual payment account that functions like a merchant-branded credit card without the merchant needing to directly issue physical cards or manage credit underwriting. This resolves the contradiction by enabling electronic transaction participation while avoiding the complexity of direct credit card issuance.
Solution Approach 2:
The system creates a virtual copy of the credit card functionality through a virtual payment account that mimics the appearance and function of a physical credit card. The virtual account number, expiration date, and security code replicate credit card data elements, allowing the merchant to offer card-like payment options without the infrastructure of actual card issuance. This enables electronic funds transfer participation while eliminating the physical card issuance complexity.
2Adaptability or versatility
If businesses issue their own credit cards to compete with competitors, then their market competitiveness improves, but the financial resources required increase
Solution Approach 1:
By partnering with a third-party credit card issuer, the merchant leverages that issuer's existing financial resources, credit lines, and issuing infrastructure. The merchant pays only for the specific virtual card services used rather than bearing the full cost of establishing a complete card issuing program. This resolves the contradiction by maintaining market competitiveness through branded payment options while significantly reducing the financial resource burden.
Solution Approach 2:
The virtual payment account system provides multiple functions: it serves as a merchant-branded credit card for customer loyalty and marketing, processes electronic funds transfers through existing payment networks, and manages billing through automated clearing house systems. This multi-functionality enables the merchant to compete effectively with other businesses that have their own credit card programs without needing to invest in separate systems for each function, thereby reducing overall financial requirements.
Data Source
AI summary
A computer-implemented method for an electronic funds transfer, the method including obtaining, using a processor system of a device, a virtual payment account associated with a merchant. The virtual payment account also being associated with a consumer account wherein an electronic payment medium issuer is a third party providing commercial funding on behalf of a consumer. Marketing information relating to the merchant associated with the virtual payment account is obtained. An electronic funds transfer is conducted utilizing an electronic payment medium signature associated with the electronic payment medium provided by the virtual payment account interfacing with an electronic terminal associated with the merchant. The virtual payment account and consumer account with information relating to the electronic funds transfer are updated.