Distributed Ledger Loyalty Wallet for Cross-Merchant Redemption

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Solution Overview

Problem

Existing loyalty points systems are cumbersome for consumers and merchants, requiring multiple cards and manual tracking, leading to discouraged participation and increased costs, with a need for a seamless, efficient, and standardized method for earning and redeeming loyalty points across different merchant networks.

Innovation Solution

A distributed ledger system, such as a blockchain, is used to create a loyalty card payment network that allows consumers to earn and redeem loyalty points across multiple merchants, with a computer-implemented method that issues loyalty cards, generates entries on a network node, and processes transactions by converting currency to loyalty points, ensuring transparency and immutability.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If each merchant issues its specific loyalty card, then the merchant can track and incentivize customer loyalty, but the consumer is overwhelmed with carrying multiple physical loyalty cards

Engineering Contradiction:

Improvemerchant loyalty tracking capabilityVSAvoidconsumer card management

Core Design Contradiction:

Adaptability or versatilityVSEase of operation

Solution Approach 1:

The patent merges multiple merchant-specific loyalty cards into a single unified digital wallet application. The system combines multiple loyalty program functionalities (different merchants, different point systems) into one integrated platform that consumers can access through a single device interface, eliminating the need to carry multiple physical cards while preserving each merchant's ability to track and manage their own loyalty programs.

Inventive Principle:

Principle #5Merging (Combining)

Solution Approach 2:

The digital wallet system provides universal functionality by enabling a single consumer interface to interact with multiple different loyalty programs from various merchants. The system acts as a universal access point that can read, store, and redeem loyalty points across different merchant networks, making the consumer experience simple while maintaining merchant-specific program integrity.

Inventive Principle:

Principle #6Universality (Multi-functionality)

2Reliability

If consumers use standalone loyalty card devices, then loyalty points can be tracked and redeemed, but the system complexity and costs increase

Engineering Contradiction:

Improveloyalty points trackingVSAvoidstandalone device infrastructure

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent replaces the mechanical standalone loyalty card device infrastructure with a software-based digital wallet system running on existing mobile devices. Instead of requiring specialized hardware cards and readers, the system uses digital interfaces and communication protocols to achieve the same loyalty tracking and redemption functionality, significantly reducing device complexity and infrastructure costs while maintaining reliability.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

3Adaptability or versatility

If merchants use closed-loop loyalty systems, then the merchant can control and track points, but consumers cannot redeem points at merchants outside the network

Engineering Contradiction:

Improvepoint redemption networkVSAvoidmerchant point control

Core Design Contradiction:

Adaptability or versatilityVSReliability

Solution Approach 1:

The digital wallet system acts as an intermediary between consumers and multiple merchant networks. It mediates the interaction by maintaining secure connections to various merchant loyalty systems while presenting a unified interface to consumers. The wallet manages authentication, point transfers, and redemption across different networks, enabling consumers to redeem points at merchants outside their original network while allowing merchants to maintain control over their point systems through the intermediary interface.

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS11315138B1Decentralized computer systems and methods for loyalty points payments using distributed ledgers

Publication Date: 2022.04.26 WORLDPAY LLC

AI summary

Decentralized computer systems and methods are disclosed for establishing and conducting payment processing with loyalty points using distributed ledger. One method includes: receiving a consumer identification, an issuer identification, and transaction information from a point of sale system when the loyalty card is presented for a transaction of a good or service at a merchant, identifying the network node containing distributed ledger associated with the issuer according to received issuer identification prompting, to participants of the shared ledger, to validate whether the consumer distributed ledger has required loyalty points for the transaction; if all of the participants of the shared ledger accepts the transaction, generating, a new immutable entry to the distributed ledger for the transaction with remaining loyalty points in the loyalty card after deducting the points required for the transaction; and sending a transaction approved message to the point of sale system at the merchant.