Blockchain Reward Point Transfers for Fraud-Resistant Reconciliation
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Solution Overview
Problem
Existing reward point transfer systems experience delays and fraud due to the lack of a common ledger and acknowledgment system, leading to customer disputes and inefficiencies.
Innovation Solution
A blockchain-based system that uses encrypted messages and hashes to facilitate secure, transparent, and instant reward point transfers between transaction account issuers and rewards partners, ensuring immutability and consensus validation.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional reward point transfer systems are used, then transfer speed may be fast for some partners, but there is no common ledger leading to fraud and synchronization errors
Solution Approach 1:
The patent merges multiple independent reward point systems into a single blockchain-based common ledger. All transaction account issuers and rewards partners share the same distributed ledger, eliminating the need for separate reconciliation systems and reducing fraud while maintaining manageable complexity through standardized protocols.
Solution Approach 2:
The blockchain network acts as an intermediary between transaction account issuers and rewards partners. It provides a neutral, tamper-proof record-keeping mechanism that both parties trust, eliminating the need for complex bilateral verification systems and reducing overall system complexity while enhancing reliability.
2Reliability
If no common ledger is used, then each partner can operate independently, but fraud occurs due to lack of acknowledgment and recording
Solution Approach 1:
The blockchain ledger serves multiple functions simultaneously: it acts as a transfer record, an acknowledgment system, a fraud prevention mechanism, and a synchronization hub for all partners. This universal ledger reduces the need for multiple specialized systems while enhancing transparency and reliability.
3Productivity
If traditional transfer methods are used, then implementation is simpler, but delays occur taking seconds to months for point transfers
Solution Approach 1:
The system performs preliminary actions by pre-establishing the blockchain ledger structure and encryption protocols before transfers begin. Smart contracts are pre-programmed with transfer rules, enabling instant execution without complex real-time negotiations or verifications, thus accelerating transfers while managing complexity through upfront configuration.
4Reliability
If encryption is implemented for security, then fraud is reduced, but processing complexity increases
Solution Approach 1:
The blockchain network provides self-service security through its inherent cryptographic protocols and consensus mechanisms. Each node automatically verifies and encrypts transactions without requiring external security management, reducing the operational complexity of implementing security while maintaining high reliability and fraud prevention.
Data Source
AI summary
A reward points transfer method of the present disclosure comprises receiving, by a blockchain node in a blockchain network, an encrypted rewards transfer message from a credit card transaction account issuer system; writing, by the blockchain node, the encrypted rewards transfer message to the blockchain network; initiating, in response to the encrypted rewards transfer message being written to the blockchain network, a transfer of reward points from a first reward loyalty program to a second reward loyalty program, wherein the transferred reward points are subject to being paid back to the first reward loyalty program from the second reward loyalty program; and generating, by the blockchain node, a rewards transfer response message comprising a transfer status, wherein the transfer status indicates a status of the transfer of reward points as being either transfer completed, transfer failed, or transfer pending.