Real-Time Reward Value Hold Mechanism for Transaction Processing
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Solution Overview
Problem
Conventional loyalty programs face challenges in providing real-time rewards, including delayed redemption, complex redemption models, and the need for merchant system upgrades, which hinder immediate reward application and increase computational complexity.
Innovation Solution
A system and method for managing reward values related to transaction accounts, involving a processing server that stores account profiles, receives transaction messages, generates reward costs, and updates reward values in real-time, allowing immediate redemption and simplifying the reward application process.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of time
If conventional loyalty programs use traditional redemption models requiring cardholders to wait for purchases to post before redeeming rewards, then system complexity and processing costs are reduced, but redemption time is delayed by days
Solution Approach 1:
The system performs preliminary actions by placing holds on reward values at the time of transaction authorization, before the purchase is fully posted. This allows the reward redemption process to begin in advance, eliminating the days-long delay in conventional systems while managing complexity through automated pre-processing of reward allocations.
2Productivity
If loyalty programs implement real-time reward application during transactions, then productivity and customer satisfaction are improved, but computational complexity and processing requirements increase
Solution Approach 1:
The system segments the reward processing into distinct phases: authorization phase where holds are placed on reward values, and settlement phase where actual deductions occur. This segmentation allows real-time reward application during transactions without overwhelming computational complexity, as the system divides processing tasks across different transaction stages.
Solution Approach 2:
The system introduces an intermediary mechanism using hold placements on reward values rather than immediate deductions. This intermediary approach allows the system to reserve rewards for specific transactions without committing full processing resources upfront, enabling real-time productivity improvement while managing computational complexity through staged processing.
3Reliability
If conventional systems require multiple authentications, auditing, tracking, and reconciliation for reward redemption, then security and accuracy are maintained, but processing time and operational complexity increase
Solution Approach 1:
The system maintains continuous tracking of reward values through holds and deductions across transactions, eliminating the need for separate batch processing of auditing and reconciliation. The useful action of reward tracking continues uninterrupted during real-time transactions, maintaining accuracy while reducing processing time by integrating these functions into the ongoing transaction flow rather than requiring separate post-processing steps.
Data Source
AI summary
A method for managing reward value related to a transaction account is described. The method includes receiving a redemption request; generating a reward cost based on at least a conversion rate and a transaction amount; updating a reward value in an account profile to place a hold on an amount of the reward value equivalent to the reward cost; and deducting a deduction amount from the reward value.