Chargeback Transaction Reconciliation with Unique Identifiers
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Solution Overview
Problem
Current systems for settling chargeback transactions involving currency exchange rate variations fail to accurately determine individual transaction gains or losses, as reconciliation files only provide net settlement amounts, requiring manual intervention to reconcile 'out of balance' conditions.
Innovation Solution
A computer system and method that transmit chargeback transaction files with unique identifiers to a payment card network, match these files with settlement amounts based on the identifiers, and determine net gains or losses resulting from changes in currency exchange rates, enabling precise calculation of gains or losses for each chargeback transaction.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Device complexity
If reconciliation files provide only net settlement amounts, then processing is simplified, but individual transaction gain or loss cannot be determined
Solution Approach 1:
The reconciliation file is segmented to include individual transaction-level data rather than aggregated net amounts. Each chargeback transaction is broken down with its specific settlement amount, enabling separate analysis of gains and losses for each transaction while maintaining the overall reconciliation structure.
2Reliability
If manual intervention is required to reconcile out of balance conditions, then accuracy can be verified, but processing efficiency decreases
Solution Approach 1:
The system performs self-service reconciliation by automatically matching chargeback transactions with settlement amounts using unique identifiers. The computer system autonomously calculates gains and losses for each transaction without requiring manual verification, thereby maintaining accuracy while significantly improving processing efficiency.
3Measurement precision
If exchange rates are applied at the time of chargeback request, then individual transaction accuracy is improved, but tracking and reconciliation becomes more complex
Solution Approach 1:
The system applies exchange rates at the time of each chargeback request submission, performing the currency conversion in advance before settlement. This preliminary action captures the exact exchange rate for each individual transaction, ensuring precision while the unique identifier system manages the tracking complexity automatically.
Data Source
AI summary
A chargeback settlement processing (CSP) computer system for determining a gain or loss in a chargeback transaction is provided, that includes a memory device and a processor in communication with the memory device. The processor is programmed to transmit to a payment card network for settlement at least one chargeback transaction file corresponding to at least one received chargeback transaction, associated with an original transaction settled using a first currency exchange rate. The at least one chargeback transaction file includes a unique file identifier. A reconciliation message received from the payment card network includes at least one settlement amount, determined at a second currency exchange rate, for the at least one chargeback transaction and the unique file identifier. The at least one chargeback transaction file is matched to the at least one settlement amount, using the unique file identifier, to determine whether a net gain or a net loss occurred.