Basket Analysis Service Decoupling Payment Routing
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Solution Overview
Problem
Existing payment processing systems face challenges in managing and constraining transactions due to proprietary networks, which limit consumer choices and increase costs for merchants, while also failing to meet regulatory requirements.
Innovation Solution
The implementation of a SaaS-based Basket Analysis Service (BAS) Module that operates independently of proprietary payment networks, allowing for item-level decision-making and payment processing without the need for closed-loop networks, thereby enhancing routing options and compliance with regulations.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If proprietary payment networks are used for transaction processing, then transaction management and control are improved, but consumer choices are limited and costs increase
Solution Approach 1:
The system segments the payment processing function from the proprietary network dependency. The BAS module independently analyzes transactions and determines eligibility, while the payment network merely provides routing. This separation allows the system to maintain reliable transaction management through the BAS module's rule-based processing while enabling consumer choices by allowing integration with multiple open-loop payment networks.
Solution Approach 2:
The BAS module is designed as a universal service that can integrate with any open-loop payment network through standard APIs. It performs multiple functions including transaction analysis, eligibility determination, and routing decisions, replacing the need for proprietary network-specific processing while maintaining compatibility with various payment networks, thereby increasing consumer choices without sacrificing transaction management capability.
2Reliability
If proprietary payment networks are used for transaction processing, then transaction control is improved, but merchant costs increase
Solution Approach 1:
The BAS module acts as an intermediary between merchants and payment networks. It provides transaction control through independent analysis and eligibility determination, reducing reliance on expensive proprietary networks. By serving as a neutral mediator that can work with multiple payment networks, it reduces merchant costs while maintaining effective transaction control through its rule-based processing system.
Solution Approach 2:
The system changes the operational parameters of payment processing by moving from proprietary network-dependent processing to independent BAS module processing. This parameter change enables the use of cost-effective open-loop payment networks while maintaining transaction control through the BAS module's analytical capabilities, thereby reducing merchant costs without sacrificing control reliability.
3Productivity
If closed-loop networks are used for item-level decision-making, then payment processing capability is improved, but routing options are limited
Solution Approach 1:
The system extracts the item-level decision-making capability from the closed-loop network structure and places it in the independent BAS module. This extraction allows the decision-making function to operate independently of any specific payment network, maintaining high payment processing capability while enabling integration with multiple open-loop networks that provide diverse routing options.
Solution Approach 2:
The BAS module provides dynamic routing capabilities by independently determining the most appropriate payment network and routing path for each transaction based on real-time analysis. This dynamic approach replaces the static, network-constrained routing of closed-loop systems, maintaining efficient payment processing while significantly increasing routing flexibility and options.
4Productivity
If proprietary payment networks are used, then transaction processing is improved, but regulatory compliance is compromised
Solution Approach 1:
The BAS module provides self-service regulatory compliance by independently analyzing transactions against applicable rules and regulations. It determines eligibility and makes routing decisions based on compliance requirements without relying on proprietary network processes. This self-service approach maintains efficient transaction processing while ensuring reliable regulatory compliance through transparent, rule-based decision-making that can be audited and verified.
Data Source
AI summary
Methods, systems, and storage media for processing transaction data are disclosed. Exemplary implementations may: receive transaction data wherein the transaction data is associated with the product purchased; analyze the transaction data; determine product eligibility for payment based on the program rules associated with the product purchased; and generate a transaction message indicating that the product or service was purchased.