Interchange Network Mediator for Co-Brand Payment Data
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Solution Overview
Problem
Existing closed-loop, private label transaction systems require costly and time-consuming configuration to communicate additional transaction data between merchants and issuers, limiting the ability to provide enhanced services for co-brand payment card transactions.
Innovation Solution
A method and system for processing financial transactions through a multi-party interchange network, where enhanced transaction data is communicated using a product code added to authorization request messages, allowing merchants to transmit addendum files with detailed transaction information to issuers via a third-party network.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of information
If a closed-loop, private label transaction system is used to communicate additional transaction data between merchants and issuers, then the ability to provide enhanced services and detailed information is improved, but the cost and time required for system configuration increases
Solution Approach 1:
The patent introduces an intermediary processing system that acts as a mediator between merchants and issuers. This intermediary receives authorization request messages, identifies enhanced payment card transactions through product codes, and facilitates the communication of addendum files containing enhanced transaction data. This mediator approach allows third-party interchange networks to enable enhanced data communication without requiring direct closed-loop configuration between merchants and issuers, thereby reducing system complexity while maintaining information communication capability.
2Loss of information
If a closed-loop, private label transaction system is used to communicate additional transaction data between merchants and issuers, then the ability to provide enhanced services and detailed information is improved, but the implementation cost increases
Solution Approach 1:
The patent enables a third-party interchange network to perform multiple functions: processing standard payment card transactions, identifying enhanced payment card transactions through product codes, and facilitating enhanced data communication for co-brand transactions. This universal system allows the interchange network to serve both traditional and enhanced transaction types through a single infrastructure, eliminating the need for separate closed-loop systems and thereby reducing implementation costs while maintaining enhanced service capabilities.
3Device complexity
If a third-party interchange network is used for co-brand transactions, then system complexity is reduced, but the ability to communicate enhanced transaction data is limited
Solution Approach 1:
The patent changes the parameter identification method by introducing product codes that identify enhanced payment card transactions within standard authorization request messages. This parameter change allows the interchange network to recognize and route enhanced transactions without requiring complex system reconfiguration. Additionally, the use of addendum files with specific data elements (such as promotional offer codes, financing terms, and detailed transaction information) enables enhanced data communication through the existing interchange infrastructure, maintaining simplicity while expanding capability.
Data Source
AI summary
A computer-based method for processing a payment transaction using an enhanced payment card is provided. The transaction is processed using a computer device coupled to a storage device. The enhanced payment card is issued to a cardholder by an issuer. The method includes receiving an authorization request message associated with a merchant. The authorization request message includes a card identifier and relating to a transaction initiated by the cardholder with the merchant using the enhanced payment card. The method includes transmitting an authorization response message to the merchant. The authorization response message is generated by the issuer and including an instructing message. The merchant is instructed, via the instructing message, to transmit to the computer device an addendum file including enhanced transaction data for the transaction.