Digital Wallet POS Payments Using Brokerage-Backed Financing
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Solution Overview
Problem
Existing payment systems do not leverage the potential liquidity of customers' brokerage accounts, limiting financial flexibility and imposing unnecessary constraints on spending power, as they require immediate liquid assets and are tied to traditional bank accounts or credit cards with associated fees and restrictions.
Innovation Solution
A system and method that integrates a mobile computing device, management server, and trusted entity server to facilitate real-time transactions by leveraging securities from a client's brokerage account, allowing seamless execution of payments using digital wallets and secure authorization.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If traditional payment methods (cash, credit cards, debit cards) are used, then transactions can be completed with liquid assets readily available, but financial flexibility is limited and transaction fees are imposed
Solution Approach 1:
The payment system enables securities to serve multiple functions: they can be held as investment assets in a brokerage account and simultaneously used as payment instruments at point-of-sale locations. The system allows securities to function both as wealth storage and as medium of exchange, eliminating the need for separate cash or credit card transactions and thereby reducing transaction fees while increasing financial flexibility.
Solution Approach 2:
The patent introduces a payment processing system that acts as an intermediary between brokerage accounts and point-of-sale merchants. This intermediary system enables the conversion and transfer of securities value to merchants without requiring traditional bank accounts or credit cards, thereby eliminating associated fees and expanding payment options for consumers.
2Ease of operation
If traditional payment systems linked to bank accounts or credit cards are used, then transactions are processed through established infrastructure, but spending limits and fund availability restrictions are imposed
Solution Approach 1:
The system allows securities to serve dual purposes as both investment vehicles and payment instruments. Consumers can maintain their securities in brokerage accounts for investment purposes while simultaneously using them for everyday purchases at participating merchants, thereby combining the ease of automated payment processing with the versatility of unrestricted spending up to the full value of their securities holdings.
Solution Approach 2:
The payment system dynamically converts securities into payment funds at the point of transaction. Rather than requiring pre-established spending limits or available credit lines, the system enables real-time conversion of securities value to payment amounts, allowing spending flexibility that adapts to the consumer's current portfolio value rather than being constrained by fixed credit limits.
3Reliability
If brokerage accounts are not integrated with payment systems, then securities can be held as investment assets, but their potential liquidity is not utilized for everyday transactions
Solution Approach 1:
The system segments the brokerage account into distinct functional components: securities held for long-term investment purposes and securities designated for payment transactions. This segmentation allows investors to protect their core investment portfolio while simultaneously utilizing a portion of their securities for everyday purchases, thereby maintaining investment integrity while improving liquidity utilization without requiring full portfolio liquidation.
Solution Approach 2:
The system enables consumers to pre-designate certain securities or portions of their brokerage account for payment purposes before transactions occur. This preliminary action allows investors to prepare their securities for liquidity conversion in advance, ensuring that investment assets remain protected while establishing a ready pool of securities that can be quickly converted to payment funds when needed, thereby improving both reliability and productivity.
Data Source
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AI summary
A system and a method for making payments at a point of sale (POS) is disclosed, involving a computing device with a digital wallet application, a management server administering a client payment account, and a trusted entity server administering a client brokerage account. The method associates the client brokerage and payment accounts with a client and facilitates transactions initiated via a POS payment system. Upon receiving a transaction authorization request, the management server establishes a secure connection with the trusted entity server to retrieve brokerage account data. The server analyzes available securities in the brokerage account and currency balances in the payment account to generate financing suggestions for the transaction, including partial security sales and partial payment from the payment account. The client selects a financing suggestion via the digital wallet application, and the management server instructs the trusted entity server to execute the suggested security sale. The transaction is authorized at the POS using the payment account, and proceeds from the security sale are recovered and applied to the payment account. The disclosed method enables integrated, secure, and flexible financing for point-of-sale transactions.