Loyalty Point Redemption via Intermediary Payment Gateway
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Solution Overview
Problem
Traditional payment networks face challenges in processing point-based transactions as loyalty program points are not easily redeemable due to validation difficulties and lack of standardized protocols, limiting their use as a cash substitute and restricting consumer transaction options.
Innovation Solution
A computer-implemented system that initiates transactions by verifying customer identity, determines loyalty account balances, and processes transactions based on set rules, allowing points to be redeemed as a cash equivalent through a mobile payment cloud and interbank network, enabling point-based transactions without disrupting existing payment systems.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If traditional payment networks are used for point-based transactions, then existing payment infrastructure is maintained, but validation difficulties and lack of standardized protocols limit point redemption capability
Solution Approach 1:
The patent introduces a loyalty program management platform as an intermediary between consumers and traditional payment networks. This platform handles the complex validation of point-based transactions by converting points into equivalent cash values and generating standardized transaction requests that can be processed by existing payment networks, thereby maintaining infrastructure simplicity while enabling versatile point redemption
Solution Approach 2:
The system transforms point-based transaction parameters into cash-equivalent parameters for processing. By converting loyalty points into standardized monetary values and formats that match traditional payment network protocols, the system enables point redemption without requiring changes to the underlying payment infrastructure, thus maintaining simplicity while improving adaptability
2Ease of operation
If participating entities require specific hardware like NFC readers for point redemption, then transaction security is improved, but consumer options and accessibility are limited
Solution Approach 1:
The patent enables loyalty programs to function universally across different payment contexts by allowing point redemption at any participating entity location, not just at locations with specialized NFC hardware. The system processes point-based transactions through standardized electronic communication, enabling consumers to use points for various transaction types (cash withdrawals, point-of-sale purchases) at diverse locations without requiring location-specific hardware configurations
Solution Approach 2:
The system creates a digital representation of loyalty points that can be transmitted and validated electronically without requiring physical NFC hardware at consumer locations. By copying the point value into standardized electronic transaction formats, the system eliminates the need for specialized hardware while maintaining security through digital validation protocols
3Reliability
If loyalty programs use non-standardized protocols for point redemption, then program flexibility is maintained, but integration with verifiable payment networks becomes difficult
Solution Approach 1:
The patent segments the transaction processing into distinct functional modules: loyalty program account validation, point-to-cash conversion, and standardized payment network transaction processing. This segmentation allows each component to operate independently with its own protocols, while the interfaces between modules use standardized formats, thereby maintaining program flexibility while ensuring reliable integration with verifiable payment networks
Solution Approach 2:
The loyalty program management platform serves as an intermediary layer that translates non-standardized loyalty program protocols into standardized payment network protocols. This intermediary converts proprietary point systems into universally understood transaction formats, ensuring reliable validation and integration with verifiable payment networks without requiring the loyalty programs themselves to adopt standardized protocols
4Adaptability or versatility
If points are made redeemable as cash substitutes through existing payment networks, then consumer options are expanded, but existing payment network protocols must be disrupted
Solution Approach 1:
The patent introduces a loyalty program management platform as an intermediary between loyalty programs and existing payment networks. This intermediary handles the complexity of point-to-cash conversion and transaction processing, allowing points to function as cash substitutes without requiring changes to the underlying payment network protocols. The intermediary absorbs the disruption and presents a stable, standardized interface to the payment network
Solution Approach 2:
The system creates standardized transaction requests that copy the structure and format of traditional cash transactions. By replicating the protocol structure of existing payment networks, the system enables point-based transactions to be processed without disrupting established protocols, thus maintaining stability while achieving cash substitute capability
Data Source
AI summary
Computer-implemented systems and methods for initiating a transaction, the transaction generating a validation request to verify a customer's identity, the validation request requesting a first unique randomized identifier from a mobile payment cloud; transmitting the first unique randomized identifier to a customer device, the first unique randomized identifier being forwarded to the mobile payment cloud as a second unique randomized identifier to validate the transaction; receiving an authentication from the mobile payment cloud based on a result of validating the transaction; transmitting a customer identification code and the cash value to an interbank network as an interbank transaction request; receiving a response from the interbank network regarding the interbank transaction request; and processing the transaction based on the response from the interbank network.