Real-Time Rebate Processing via Intermediary Reconciliation
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Solution Overview
Problem
Conventional loyalty programs face challenges in providing real-time rewards, including delayed redemption processes, complex computational requirements, and the need for merchant system upgrades, which hinder immediate reward application and scalability.
Innovation Solution
A system and method for real-time processing of rebates, involving a processing server that receives transaction messages, identifies eligible rebates, and electronically transmits rebate requests to financial institutions via a payment network, allowing immediate reward application during transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of time
If conventional loyalty programs use traditional redemption models, then cardholders can receive rebates or points, but they must wait days for purchases to post before redeeming rewards
Solution Approach 1:
The system performs preliminary actions by pre-authorizing transactions and pre-calculating rebate eligibility before the purchase is fully processed. The rebate amount is determined and held in reserve during the authorization phase, allowing immediate redemption without waiting for posting delays.
Solution Approach 2:
The patent introduces an intermediary reconciliation system that acts as a mediator between the authorization and settlement processes. This intermediary layer handles the complex communication and data matching between different systems, enabling real-time rebates without requiring merchants to upgrade their infrastructure.
2Speed
If conventional systems implement real-time rebate processing, then immediate rewards can be provided, but complex computational requirements and multiple authentications increase processing costs
Solution Approach 1:
The system performs preliminary actions by pre-authorizing transactions and pre-calculating rebate eligibility before the purchase is fully processed. The rebate amount is determined and held in reserve during the authorization phase, allowing immediate redemption without waiting for posting delays.
Solution Approach 2:
The patent extracts the complex authentication and reconciliation processes from the real-time transaction flow. By separating these functions into post-processing steps handled by an intermediary system, the main transaction path remains simple and fast, while still achieving eventual rebate delivery.
3Productivity
If merchants upgrade devices or programming to support real-time rewards, then immediate rebate application is possible, but implementation costs and staff training requirements increase
Solution Approach 1:
The patent introduces an intermediary reconciliation system that acts as a mediator between the authorization and settlement processes. This intermediary layer handles the complex communication and data matching between different systems, enabling real-time rebates without requiring merchants to upgrade their infrastructure.
Solution Approach 2:
The system enables self-service by allowing cardholders to automatically receive and redeem rebates without merchant intervention. The rebate process is automated through the payment network infrastructure, eliminating the need for merchant staff training on new reward procedures.
4Adaptability or versatility
If conventional programs operate as enterprise-specific products, then institutions can control their loyalty programs, but universal program support and scalability are limited
Solution Approach 1:
The patent implements universality by creating a standardized rebate processing framework that works across multiple financial institutions and payment networks. The system uses standard payment network protocols and data formats, allowing different enterprises to participate in a unified loyalty ecosystem while maintaining their own program rules.
Data Source
AI summary
A method for real-time processing of a rebate is described. The method includes receiving a transaction message that includes a primary account number, a transaction amount, and a transaction identifier; receiving a rebate request including the transaction identifier; identifying a financial institution associated with a transaction account corresponding to the primary account number, generating a data message including a rebate request; and electronically transmitting the data message.