Payment Card Benefit Estimator Using Transaction Clustering

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Solution Overview

Problem

Payment card issuers struggle to provide personalized benefits to cardholders, leading to perceived irrelevance and inflexibility, which can result in customer attrition and strained relationships between cardholders and issuers, as existing systems lack effective tools for cardholders to understand and optimize their benefits based on individual needs and usage patterns.

Innovation Solution

A computer-implemented system that analyzes transaction data to group cardholders into demographic clusters, determines estimated benefit values, and presents individualized payment card benefit options, allowing cardholders to select optimal benefits based on their behavior and demographics, while providing issuers with insights into cardholder preferences and behavior.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Device complexity

If payment card issuers offer standardized benefits to all cardholders, then implementation complexity is reduced, but benefit relevance to individual cardholders deteriorates

Engineering Contradiction:

Improvebenefit management complexityVSAvoidbenefit relevance to cardholder

Core Design Contradiction:

Device complexityVSAdaptability or versatility

Solution Approach 1:

The patent segments cardholders into different demographic clusters based on transaction data analysis, allowing benefits to be tailored to specific segments rather than applying a uniform benefit structure to all cardholders. This segmentation enables personalized benefit recommendations while maintaining manageable complexity through automated clustering algorithms.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The system dynamically changes benefit parameters based on cardholder behavior patterns and demographic characteristics. By analyzing transaction data and adjusting benefit offerings according to observed spending patterns, the system adapts benefit relevance to individual cardholders without requiring manual configuration for each user.

Inventive Principle:

Principle #35Parameter changes

2Adaptability or versatility

If payment card issuers provide personalized benefits based on individual needs, then benefit relevance improves, but system complexity increases

Engineering Contradiction:

Improvebenefit personalizationVSAvoiddata processing complexity

Core Design Contradiction:

Adaptability or versatilityVSDevice complexity

Solution Approach 1:

The system enables self-service personalization by automatically analyzing cardholder transaction data and generating personalized benefit recommendations without requiring manual intervention. The automated clustering and recommendation engine allows the system to serve itself in terms of data processing and benefit customization, reducing the operational burden despite increased personalization capabilities.

Inventive Principle:

Principle #25Self-service

Solution Approach 2:

The system implements feedback loops where transaction data is continuously analyzed, benefit recommendations are provided, and cardholder responses are tracked. This feedback mechanism allows the system to refine its personalization algorithms over time, improving benefit relevance while managing complexity through iterative learning from actual cardholder behavior.

Inventive Principle:

Principle #23Feedback

3Ease of operation

If payment card benefits are made flexible and customizable, then cardholder satisfaction improves, but operational efficiency deteriorates

Engineering Contradiction:

Improvebenefit flexibilityVSAvoidoperational efficiency

Core Design Contradiction:

Ease of operationVSProductivity

Solution Approach 1:

The patent implements dynamic benefit configurations that automatically adjust based on cardholder behavior patterns. Rather than requiring manual updates for each customization request, the system dynamically modifies benefit offerings in response to observed spending patterns and demographic shifts, maintaining flexibility while preserving operational efficiency through automation.

Inventive Principle:

Principle #15Dynamics

4Productivity

If payment card issuers maintain static benefit offerings, then operational simplicity is preserved, but cardholder engagement deteriorates

Engineering Contradiction:

Improveoperational simplicityVSAvoidbenefit appeal to cardholder

Core Design Contradiction:

ProductivityVSAdaptability or versatility

Solution Approach 1:

The system performs preliminary actions by pre-analyzing transaction data and pre-configuring personalized benefit recommendations before cardholders need them. This advance preparation allows the system to maintain operational simplicity while delivering adaptive, engaging benefit offerings, as the personalization work is completed proactively rather than reactively.

Inventive Principle:

Principle #10Preliminary action

Data Source

PatentUS11961104B2Payment card benefit value estimator system and method with transaction-based individual cardholder relevance of selectable benefits

Publication Date: 2024.04.16 MASTERCARD INT INC

AI summary

A payment card benefit assessment system and method includes a computing device accepting payment card benefit catalog information from a payment card issuer and payment card transaction data from a payment card processing network. The payment card transaction data is analyzed to group cardholders into one demographic clusters and to determine an estimated benefit value for each of the demographic clusters. Individualized payment card benefit options are presented to an individual cardholder based on the individual cardholder's payment card transactions and the determined estimated benefit value for a corresponding one of the plurality of demographic clusters.