Distributed Ledger Reward Account Processing
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Solution Overview
Problem
Current loyalty and rewards programs face delays in vendor onboarding and redemption processes, lacking real-time information exchange and resulting in lag periods for e-coupons and e-gift certificates.
Innovation Solution
Implementing a distributed ledger system that allows real-time or near real-time reward account processing, enabling merchants and financial institutions to securely and immutably record and redeem reward points through a consensus-based network, using smart contracts for verification and fulfillment.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If traditional reward program processing is used, then system complexity is low, but vendor onboarding takes 3-5 months and redemption has lag periods
Solution Approach 1:
The patent introduces a distributed ledger as an intermediary system that enables real-time reward point recording and verification across multiple participants. The ledger acts as a shared mediator between customers, merchants, and financial institutions, eliminating the need for complex centralized processing while achieving rapid onboarding and immediate redemption.
Solution Approach 2:
The patent replaces traditional mechanical/centralized reward processing systems with a distributed ledger technology. This substitution eliminates manual verification processes and centralized control, enabling automated real-time recording of reward points and instant redemption without requiring complex administrative overhead.
2Speed
If real-time reward processing is implemented, then redemption speed increases, but system security and fraud prevention become more challenging
Solution Approach 1:
The distributed ledger enables self-service verification where each node independently validates reward point transactions against the immutable ledger. The system automatically verifies eligibility, checks balances, and executes redemptions without manual intervention, reducing fraud while maintaining speed. The consensus mechanism ensures that only valid transactions are recorded.
Solution Approach 2:
The patent employs cryptographic hashes and digital signatures as disposable security mechanisms that are computed once and then discarded. These one-time cryptographic proofs enable rapid verification of reward point transactions without requiring ongoing complex security computations, maintaining both speed and security.
3Loss of information
If distributed ledger technology is used, then real-time processing and transparency are improved, but implementation complexity and initial setup requirements increase
Solution Approach 1:
The patent segments the distributed ledger into independent nodes operated by different participants (customers, merchants, financial institutions). Each node maintains a copy of the ledger and can independently verify transactions. This segmentation enables information transparency across the network while distributing implementation complexity across multiple independent entities rather than requiring a single complex centralized system.
Data Source
AI summary
Systems and methods for reward account processing using a distributed ledger are disclosed. According one embodiment, at a node in a distributed ledger network for a plurality of reward program participants, the node comprising at least one computer processor, a method for reward account processing using a distributed ledger may include: (1) receiving a request to withdraw an amount of reward points from a customer account for a customer maintained by a distributed ledger; (2) retrieving, from the distributed ledger, a reward points balance for the customer account; (3) verifying that the reward points balance in the customer account is greater than the amount of reward points to be withdrawn; (4) writing a deduction of the amount of reward points from the reward points balance in the customer account to the distributed ledger; and (5) causing a financial instrument to be issued in response to the deduction.