Real-Time Issuer Bidding for Electronic Payment Selection
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Solution Overview
Problem
Current electronic payment systems fail to effectively inform consumers about the benefits of different payment cards during transactions, leading to confusion and missed opportunities for issuers to influence consumer choice, resulting in limited benefits for both consumers and issuers.
Innovation Solution
A real-time bidding system that allows issuers of electronic payment instruments to compete by submitting offers to a bid analysis computer, which compares and selects the most beneficial payment instrument for the consumer during a transaction, using a mobile communication device as a mobile wallet.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If consumers carry multiple credit cards from different issuers, then they have more payment options and potential rewards, but they experience confusion and difficulty in knowing which card to use during transactions
Solution Approach 1:
The patent introduces a bid analysis computer as an intermediary system that automatically compares payment instrument offers from multiple issuers and selects the best option for the consumer. This mediator eliminates the need for consumers to manually evaluate multiple credit card terms and makes the decision process transparent and automated at the point of sale.
Solution Approach 2:
The system provides real-time feedback to consumers by displaying the selected payment instrument and its associated benefits (such as rewards or cash back) during the transaction. This feedback mechanism helps consumers understand which card provides the most value and builds trust in the automated selection process.
2Loss of information
If issuers use general mail and e-mail advertisements to reach consumers, then they can communicate with consumers, but consumers ignore these advertisements and issuers have limited impact on consumer choice at the time of purchase
Solution Approach 1:
The system performs preliminary actions by pre-configuring payment instruments with their terms and conditions before the transaction occurs. The bid analysis computer pre-compares offers from multiple issuers and prepares the optimal selection in advance, so that when the consumer makes a purchase, the best payment instrument is already identified and presented to them immediately.
Solution Approach 2:
The patent replaces the mechanical system of traditional mail and e-mail advertisements with an electronic, automated bidding system that operates in real-time during transactions. This substitution eliminates the delay and irrelevance of static advertisements by implementing a dynamic, context-aware selection process that directly impacts the consumer's purchasing decision.
3Adaptability or versatility
If issuers do not have an effective method to influence consumer choice, then consumers can use any payment instrument, but issuers cannot compete for transactions and miss out on rewards and fees
Solution Approach 1:
The system introduces dynamic competition where payment instrument offers are actively compared and selected in real-time based on current transaction conditions. Instead of static pre-agreed terms, the system dynamically evaluates multiple issuer offers and selects the most beneficial one, creating a living, adaptive payment selection process that responds to consumer needs and issuer incentives simultaneously.
Data Source
AI summary
Issuers of electronic payment instruments can bid or submit competing offers to consumers in real-time during a transaction to influence consumers selecting their electronic payment instruments to complete a pending electronic transaction. Requests for bids, issuer responses with offers or proposed terms (e.g., annual percentage rate, miles, points, cash back, etc.), analysis of competing issuer offers, and selection of an electronic payment instrument based on the offer analysis occur in real-time such as while the consumer is at an electronic payment device of a merchant. An electronic payment instrument may be selected for the consumer, e.g., the instrument associated with an offer that confers the greatest benefit to the consumer compared to other offers, or the offer data can be presented to the consumer such as in the form of a ranking or list so that the consumer can select the electronic payment to be utilized to complete the transaction.