Card Transaction Pricing With Transaction-Level Interest Allocation

Resolve Bottlenecks,
Find Innovative SolutionsGenerate Solutions

Solution Overview

Problem

Conventional methods for calculating interest charges on credit and debit card transactions are performed at balance level, lacking point-in-time accuracy, leading to incorrect calculations, manual corrections, and limited promotional offers, with no split cycle interest charge capability and no reallocation during backdated payments or disputes.

Innovation Solution

Implementing a platform, language, and database agnostic transaction level data management module for card transactions that performs fee and interest charge calculations at the transaction level, allowing accurate interest charge calculations, removal of balance bucket limitations, and enabling point-in-time estimated fees, with capabilities for split cycle interest charge calculations and automatic backdating adjustments.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Device complexity

If interest charge calculations are performed at balance level, then the calculation process is simpler, but the accuracy of interest charge calculations deteriorates

Engineering Contradiction:

Improvecalculation process complexityVSAvoidinterest charge calculation accuracy

Core Design Contradiction:

Device complexityVSMeasurement precision

Solution Approach 1:

The patent segments the balance level calculation into transaction level calculations. Each transaction is processed individually with its own interest charge calculation, allowing for accurate point-in-time pricing while maintaining manageable complexity through automated processing of each segmented transaction

Inventive Principle:

Principle #1Segmentation

2Ease of operation

If conventional balance level interest charge calculations are used, then the system is easier to operate, but manual corrections are required leading to increased time consumption

Engineering Contradiction:

Improvesystem operation easeVSAvoidmanual correction time

Core Design Contradiction:

Ease of operationVSLoss of time

Solution Approach 1:

The system performs self-service through automated transaction level interest charge calculations that automatically correct pricing errors without manual intervention. The automated process handles backdating, reversals, and promotional offer applications independently, eliminating the need for manual corrections while maintaining operational simplicity

Inventive Principle:

Principle #25Self-service

3Device complexity

If balance level interest charge calculations are performed, then the calculation scope is limited, but the ability to handle split cycle interest charges and point in time estimates deteriorates

Engineering Contradiction:

Improvecalculation scopeVSAvoidsplit cycle interest charge capability

Core Design Contradiction:

Device complexityVSAdaptability or versatility

Solution Approach 1:

The patent implements dynamic transaction level calculations that adapt to different timing scenarios. The system dynamically adjusts interest charge calculations based on specific transaction dates, enabling split cycle interest charges and point-in-time estimates by processing each transaction's unique temporal characteristics rather than using static balance level calculations

Inventive Principle:

Principle #15Dynamics

4Productivity

If conventional balance level processing is used, then the processing speed is faster, but the accuracy of payment allocations and fee refunds deteriorates

Engineering Contradiction:

Improveprocessing speedVSAvoidpayment allocation accuracy

Core Design Contradiction:

ProductivityVSMeasurement precision

Solution Approach 1:

The system maintains continuous automated processing at the transaction level, ensuring that payment allocations and fee refunds are calculated accurately for each transaction as it occurs. This continuous processing eliminates the need for batch processing while maintaining both speed and accuracy through real-time transaction level computations

Inventive Principle:

Principle #20Continuity of useful action

Data Source

PatentUS20250384431A1System and method for card transaction level pricing and balance management

Publication Date: 2025.12.18 JPMORGAN CHASE BANK NA

AI summary

Various methods and processes, apparatuses or systems, and media for transaction level pricing and balance management are disclosed. A processor receives a plurality of transactions associated with a card; enriches the plurality of transactions by consuming external transaction data associated with each transaction, populating preconfigured internal attributes data, and outputting enriched transactions; publishes the enriched transactions for executing a transaction level pricing and balance management algorithm; consumes the enriched transactions; identifies type of each transaction from the consumed enriched transactions by applying predefined rules; and executes, for each type of transaction, the transaction level pricing and balance management algorithm to perform the following operations at transaction level at the time of transaction posting instead of balance level calculations at cycle time: fee calculations, interest charge calculations, payment allocations, payment reversal processing, balance management at transaction level, service customers with intra cycle financial estimates, remove account processing at accumulated balance level.