Debit Network Intermediary for Cross-Ledger Loyalty Redemption
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Solution Overview
Problem
Merchants face challenges in incentivizing consumer spending and tracking usage of loyalty points across different networks, as each merchant issues its own loyalty points, leading to consumer inconvenience and complexity in transactions.
Innovation Solution
A debit network acts as an intermediary between distributed ledgers, enabling seamless redemption of loyalty points across different merchant networks by converting transaction amounts between various resource types using blockchain technology.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If each merchant issues its own loyalty points, then merchants can incentivize and track consumer usage, but consumers must carry multiple payment vehicles and transactions become complex
Solution Approach 1:
A debit network acts as an intermediary between merchants and consumers, enabling loyalty points issued by one merchant to be redeemed at another merchant's location. The debit network facilitates this cross-merchant transaction by converting and validating loyalty points, eliminating the need for consumers to carry multiple payment vehicles while preserving each merchant's ability to issue and track their own loyalty programs
2Reliability
If loyalty points are restricted to specific merchants, then merchants can track consumer usage, but consumers cannot redeem points at merchants outside the issuing network
Solution Approach 1:
The debit network provides a universal platform that accepts loyalty points from multiple different merchant networks and enables redemption at various merchant locations. This multi-functional system maintains reliable usage tracking for each merchant while providing consumers with flexible redemption options across different merchants, effectively bridging the gap between restricted loyalty programs and cross-merchant usability
3Device complexity
If a centralized system manages loyalty points, then transaction control is simplified, but system reliability and consumer trust are reduced due to single point of failure
Solution Approach 1:
The system segments loyalty point management across multiple independent merchant networks, each maintaining their own loyalty programs and tracking mechanisms. Rather than a single centralized authority, the debit network facilitates coordinated transactions between these segmented systems through standardized protocols, improving reliability by distributing control while maintaining management simplicity through automation
Data Source
AI summary
Decentralized computer systems and methods are disclosed for using a debit network as an intermediary between distributed ledgers. One method includes: receiving, at a first blockchain network from a merchant, transaction information comprising a consumer identification, an issuer identification from a payment vehicle presented for a transaction, and a transaction amount in resources of a first type, wherein the merchant and/or its acquirer are participants of the first blockchain network but the consumer and/or issuer are not participants of the first blockchain network; sending the transaction information to a debit network; identifying, using the debit network, a second blockchain network having the consumer and/or the issuer as participants, using the received consumer identification or issuer identification; and if participants of the second blockchain network accept the transaction, generating a new immutable entry to the second blockchain network indicating a change in the resources of a second type.