Location-Specific Reward Association with Payment Cards
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Solution Overview
Problem
Current methods for offering discounts and rewards to consumers, such as location-based advertising, are inefficient as they require merchants to provide discounts to all card holders regardless of their needs or location, and virtual coupons are difficult for consumers and merchants to process.
Innovation Solution
A system that uses situation-based information to associate discounts with credit cards, allowing merchants to offer targeted promotions that are automatically applied when the card is used for a purchase, eliminating the need for coupons or special interactions at the point of sale.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If global discounts are offered to all card holders, then the payment processing company delivers value to card members and drives sales, but the merchant is forced to offer the discount to every card holder regardless of their actual need or location
Solution Approach 1:
The system transitions from uniform global discounts to location-specific and situation-based targeted discounts. Merchants can define specific geographic areas, situations, or contexts where discounts apply, allowing the promotion to be localized rather than applied universally to all card holders regardless of their actual circumstances.
Solution Approach 2:
The system pre-configures discount rules and merchant parameters before the transaction occurs. Merchants set up the conditions under which discounts will be applied (such as location, situation, or customer profile), and the system automatically evaluates and applies the appropriate discount at point of sale without requiring manual intervention or complex real-time decision-making.
2Loss of information
If virtual coupons are pushed to consumers on mobile devices, then location-based offers can be delivered to consumers, but the consumer finds it difficult to communicate the coupon to the clerk and the merchant Point of Sale system is not equipped to handle the coupon
Solution Approach 1:
The system introduces a payment processing company as an intermediary that bridges the gap between the consumer's mobile device and the merchant's Point of Sale system. The payment processor receives the offer information from the consumer's device, validates it against pre-configured rules, and automatically communicates the applicable discount to the merchant's system, eliminating the need for manual coupon presentation and processing.
Solution Approach 2:
The system replaces the mechanical process of physical or digital coupon presentation and manual processing with an automated electronic system. Instead of consumers needing to physically show coupons or manually enter promo codes, the system automatically detects the applicable offer through electronic communication between the mobile device, payment processor, and Point of Sale system.
3Adaptability or versatility
If location-based advertising is used to target consumers, then offers can be delivered to consumers at the right place and time, but the system becomes complex requiring coordination between multiple systems
Solution Approach 1:
The system uses the universal payment processing infrastructure to serve multiple functions: it handles the automated discount application, communicates with both mobile devices and Point of Sale systems, validates offers against pre-configured rules, and processes transactions. By leveraging the existing multi-functional capabilities of the payment processor, the system avoids requiring separate dedicated systems for each function.
Solution Approach 2:
The system pre-configures all discount rules, merchant parameters, and validation logic before the transaction occurs. Merchants set up the conditions under which discounts will be applied in advance, and the system automatically evaluates and applies the appropriate discount at point of sale without requiring complex real-time decision-making or coordination during the actual transaction.
Data Source
AI summary
A system, method and computer-readable medium are disclosed for advertising and completing a transaction using a credit card or a debit card. The method includes receiving situation information at a device, based on the situation information, transmitting an advertisement to the device, associating an advertisement with an identification card such as a debit card, credit card, student ID card, biometric data, or club card, and receiving an indication of a purchase associated with the advertisement and completed using the card. The disclosure enables a user to receive an advertisement on a device such as a mobile device and then make a purchase decision based on that advertisement in a normal fashion or transparent to the user and sales clerk, without the use of coupons, special codes or any other additional and annoying requirements for making the purchase. The user only needs to use an appropriate identification card. The merchant for the clerk at a point of sale handles the transaction in a standard fashion. The user can then receive a confirmation of a discount for the transaction on the consumer mobile device and later receive a rebate on an identification card statement.