Cashback Funding System Pre-authorization Mechanism

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Solution Overview

Problem

Existing cashback systems for debit card transactions often incur high percentage-based commission fees for merchants, and users face inconvenience in obtaining cash without separate transactions.

Innovation Solution

A system and method for cashback funding that allows users to receive a cashback amount exceeding the transaction amount through pre-authorization or user-selected options, funded into an account upon authorization, eliminating percentage-based fees and enabling convenient cash accumulation.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Ease of operation

If cashback is offered through traditional debit card transactions, then users can obtain cash convenience, but merchants incur high percentage-based commission fees

Engineering Contradiction:

Improvecash access convenienceVSAvoidtransaction commission fees

Core Design Contradiction:

Ease of operationVSLoss of energy

Solution Approach 1:

The patent changes the fee structure parameter from percentage-based to fixed-amount-based. Instead of charging merchants a percentage of the transaction amount, the system charges a fixed fee regardless of the cashback amount, thereby reducing transaction costs for merchants while maintaining service viability

Inventive Principle:

Principle #35Parameter changes

2Loss of energy

If users make separate cash withdrawal transactions to obtain cash, then transaction costs are controlled, but user convenience is reduced

Engineering Contradiction:

Improvetransaction costsVSAvoidcash withdrawal convenience

Core Design Contradiction:

Loss of energyVSEase of operation

Solution Approach 1:

The patent merges the cashback transaction with the original debit card purchase transaction. Instead of requiring separate cash withdrawal transactions, the system combines both operations into a single transaction flow, allowing users to receive cashback automatically at the point of sale while maintaining cost efficiency

Inventive Principle:

Principle #5Merging (Combining)

3Reliability

If pre-authorization requests are made to ensure sufficient funds, then transaction reliability is improved, but processing time and complexity increase

Engineering Contradiction:

Improvefund availability assuranceVSAvoidauthorization process complexity

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent implements pre-authorization of a maximum cashback amount before the actual transaction. This preliminary action ensures that sufficient funds are available in advance, allowing the system to quickly determine eligibility without complex real-time calculations during the actual transaction, thereby reducing processing complexity while maintaining reliability

Inventive Principle:

Principle #10Preliminary action

Data Source

PatentUS8296235B2System and method for cashback funding

Publication Date: 2012.10.23 PAYPAL INC

AI summary

In an example embodiment, a system is provided for a cashback funding of an account. The system comprises a transaction receiving module to receive a request to process a transaction amount, wherein the transaction amount is funded by a debit card. The system further comprises a transaction authorization module to make a pre-authorization request to the debit card, wherein the pre-authorization request exceeds the transaction amount by a predetermined value and is to receive an approval for the pre-authorization request. The system further comprises a cashback funding module to offer a cashback amount in excess of the transaction amount but less than the predetermined value. In response to an acceptance of the cashback offer by a user, the cashback funding module is to make an authorization request for the total amount, and in response to an approval of the authorization, is to fund the account with the funds in excess of the transaction.