Linking ACH Payment Data with Merchant Loyalty Systems
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Solution Overview
Problem
Merchants face challenges in recognizing customers and associating Automated Clearing House (ACH) payment information with customer loyalty data, limiting their ability to offer incentives for ACH payments over payment card transactions, resulting in higher processing fees.
Innovation Solution
Systems and methods for linking alternative payment information with customer loyalty data by obtaining a customer loyalty identifier, reading customer data from a database, and applying ACH information to a current purchase, enabling merchants to offer incentives for ACH payments.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If merchants accept payment card transactions to meet customer preference for convenience, then customer satisfaction is improved, but payment processing fees increase
Solution Approach 1:
The system performs preliminary actions by obtaining and storing customer ACH payment information in advance during enrollment, then retrieving this stored information during transactions to enable low-fee ACH processing without requiring real-time customer input
Solution Approach 2:
The merchant system acts as an intermediary between customers and payment processors by maintaining a local database of customer ACH information, enabling the merchant to directly initiate ACH transfers without going through high-fee payment card networks
2Adaptability or versatility
If merchants implement customer recognition systems to associate ACH data with loyalty accounts, then ability to offer ACH incentives is improved, but system complexity increases
Solution Approach 1:
The system uses universal customer identifiers (email addresses, phone numbers, or loyalty program IDs) that can identify customers across multiple contexts and transactions, enabling a single identifier to link ACH information, loyalty accounts, and transaction history without requiring separate recognition systems
Solution Approach 2:
The system creates and maintains simplified copies of customer identification information in its database, allowing quick matching and association of ACH data with loyalty accounts through straightforward data retrieval rather than complex real-time verification
3Loss of energy
If merchants offer discounts to persuade customers to use ACH payments, then payment processing fees are reduced, but merchant revenue decreases
Solution Approach 1:
The system implements feedback by tracking which customers use ACH payments versus payment cards, allowing merchants to analyze payment patterns and adjust incentive strategies based on actual customer behavior and response to previous offers
Solution Approach 2:
The system enables dynamic adjustment of incentive parameters such as discount amounts or loyalty point multipliers based on transaction characteristics, customer history, and current business needs, allowing optimization of the balance between incentives offered and fees saved
Data Source
AI summary
A method for linking alternative payment information with customer loyalty data includes obtaining a customer loyalty identifier associated with a customer, reading customer data from a database based on the obtained customer loyalty identifier, obtaining alternative payment information from the read customer data, determining whether payment by the alternative payment information is enabled for the customer loyalty identifier, prompting the customer to enable payment by the alternative payment information, prompting the customer for authorization information associated with payment by the alternative payment information, enabling payment by the alternative payment information for the customer loyalty identifier, and applying the alternative payment information to a current purchase of the customer.