Virtual Pooled Account for Mobile Banking Cost Reduction
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Solution Overview
Problem
Current mobile payment systems face challenges such as security issues, high costs for merchants, and inefficiencies in processing transactions, particularly in person-to-person transactions, due to the need for proprietary networks and the lack of adaptability for non-merchant interactions.
Innovation Solution
A closed-loop mobile payment system utilizing a virtual pooled account that allows users to conduct financial transactions through mobile devices, eliminating the need for third-party financial institutions and reducing settlement and operational costs by using SMS messaging and mobile client applications for secure, easy, and convenient transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional financial instruments (checks, credit cards, debit cards) are used for transactions, then transaction capability is provided, but security issues and fraud prevention costs increase significantly
Solution Approach 1:
The patent extracts the essential function of financial transactions from traditional complex instruments (checks, credit cards, debit cards) and implements it through a simplified mobile phone-based system using SMS messaging. This removes the security vulnerabilities and high fraud prevention costs associated with traditional instruments while maintaining transaction capability.
Solution Approach 2:
The patent introduces a mobile phone network (SMS system) as an intermediary between users for financial transactions. This intermediary provides a secure, controlled environment for transactions that eliminates the fraud risks of traditional instruments while reducing prevention costs through the inherent security of the SMS protocol.
2Productivity
If proprietary networks are used for mobile payments, then transaction processing is enabled, but system complexity and transaction costs increase
Solution Approach 1:
The patent utilizes the existing mobile phone network infrastructure for financial transactions. The SMS system, already universally deployed for communication, is repurposed to carry financial transaction data. This eliminates the need for proprietary payment networks and reduces system complexity while maintaining full transaction processing capability.
3Productivity
If third-party financial institutions are involved in transactions, then transaction processing is facilitated, but settlement and operational costs increase
Solution Approach 1:
The patent extracts the transaction processing function from third-party financial institutions and implements it directly through the mobile phone network. Users can transact peer-to-peer without involving banks or other financial intermediaries, eliminating settlement fees and operational costs associated with third-party processing.
4Ease of operation
If traditional payment systems are used for person-to-person transactions, then transactions can be conducted, but convenience and speed are reduced
Solution Approach 1:
The patent replaces the mechanical processes of traditional payments (writing checks, signing cards, visiting banks) with electronic SMS messaging. Transactions are initiated and completed through text messages, providing immediate processing and maximum convenience without requiring physical presence or complex procedures.
Data Source
AI summary
A virtual pooled account is used in operating a system having multiple financial partners. In a specific implementation, the system is a mobile banking system. Instead of maintaining separate general ledgers for each financial institution, the system will keep one general virtual pooled account. This will reduce the settlement and operational costs of the system. The owner of the virtual pooled account will receive the float on the virtual pooled account, and this float will be distributed to the multiple financial partners according to a formula.