Dynamic Delivery Authorization System for Cryptographic Payments (pat. pend.)
The utility patent application of Payment21® with the United States Patent and Trademark Office for its “Dynamic Delivery Authorization for Cryptographic Payments got published in May 2017. The system described in the patent application enables Bitcoin processors and merchants to control both delivery authorizations and default risk. The innovation mitigates losses that might occur due to incorrect approval for delivery of goods and services. Our company’s invention allows users to issue delivery authorizations incrementally by controlling the particular clearing and settlement mechanisms of Bitcoin payments.
Providing a dynamic delivery authorization system for e-commerce merchants is a must for Bitcoin. As an e-commerce merchant, you have to control the delivery of goods and services and reconcile payments in real-time. This can only be done through sophisticated authorization systems synchronizing inventory and resource planning systems with clearing and settlement mechanisms of payments.
One distinct feature of the invention is how it coordinates blockchain confirmations between payment clearing statuses of processor engines and delivery clearance methods of merchants’ e-commerce distribution systems. The proprietary mechanics of Payment21® support the synchronization of delivery approvals with block chain confirmations. This element mitigates default risk by preventing misallocation of funds during the delivery approval process. The system progressively adjusts and reconciles various delivery statuses. It is useful for e-commerce merchants who utilize Industry-specific distribution systems.
Just-in-time payment guarantees
Our invention is a dynamic delivery authorization system supporting the unique characteristics of digital currency, which basically results in faster deliveries based on just-in-time payment guarantees. Essentially, this tool benefits consumers and merchants alike. Potentially, it represents a tremendous opportunity for the Internet of Things (IoT) by allowing users to profit from advanced automation.
With the option to fully automate delivery approvals for goods and services, as well as the ability to align the status of funds as “cleared” with business requirements, merchants can fill orders faster and release goods and services for delivery sooner. Merchants utilizing the invention benefit from increased velocity of payments and, as a result, have more working capital available.
The innovation is accessible through the Payment21® Bitcoin Cashier System. Merchants are able to self-service their delivery approval preferences by adjusting account settings. Payment statuses can be aligned with various delivery statuses of e-commerce distribution systems. This functionality is accomplished by using the synchronization intervals of Bitcoin transaction confirmations on the blockchain. Linking clearing and settlement of funds with delivery authorizations makes the release of virtual goods and shipping of physical goods more efficient and effective.
Instant delivery of goods and services
Another property of the invention allows Bitcoin to be available immediately upon receipt, thereby making instant delivery possible. For some verticals, such as merchants selling virtual goods, the system eliminates the need to wait for payment confirmations before delivery authorization is forwarded to e-commerce distribution systems. Using the invention, funds can be regarded as received right after payment authorization or after a small number of confirmations, thus allowing orders to be processed for delivery faster than usual.
Typical Bitcoin transactions take 10 minutes or more to be recorded in a block by miners. Until confirmed in the blockchain, they are called “zero-confirm” transactions, and cannot be fully relied upon as the sender could spend the money elsewhere before the transaction is confirmed. As a result, merchants accepting Bitcoin require multiple confirmations before crediting a payment as received, which can take anywhere from a few minutes to several hours.