Rewards Program Promotion Code Application in Payment Transactions
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Solution Overview
Problem
Current payment card systems face challenges in efficiently managing special or customized issuer-merchant relationships, particularly in applying rewards programs and promotions to transactions, as they require direct communication and modified systems for rewards program management, which can be complex and resource-intensive.
Innovation Solution
A network-based system and method that allows cardholders to select and apply promotion codes associated with rewards programs to payment transactions using a payment card network, by storing promotion and rewards data in a database and automatically applying relevant codes to transactions, thereby streamlining the process and reducing the need for direct merchant-issuer communication.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If direct communication between issuer and merchant is used for rewards program management, then transaction authorization and clearing can be handled, but system complexity and resource requirements increase
Solution Approach 1:
The patent introduces a rewards program promotion code as an intermediary mechanism. Instead of requiring direct communication between issuer and merchant systems, the promotion code acts as a mediator that carries rewards program information through the existing payment card transaction flow. The code is embedded in transaction data and processed by the payment network, eliminating the need for specialized direct communication channels between issuer and merchant while maintaining reliable transaction authorization.
2Productivity
If merchant acquirer systems are modified to accommodate rewards program parameters, then rewards can be tracked and reimbursed, but implementation costs and system modifications increase
Solution Approach 1:
The patent makes the existing payment card transaction processing system universal by embedding rewards program functionality within the standard transaction flow. The promotion code can be processed using the same infrastructure that handles regular payment transactions, eliminating the need for separate specialized systems at merchant acquirers. This multi-functional approach allows rewards tracking to be achieved without modifying existing acquirer systems, as they simply process the promotion code as part of the standard transaction.
3Adaptability or versatility
If legacy general purpose bankcard infrastructure is used for special relationships, then existing infrastructure is utilized, but transaction routing and merchant accounting require additional processing
Solution Approach 1:
The patent applies preliminary action by pre-embedding the promotion code with the payment card before the transaction occurs. The promotion code is configured in advance within the payment card data, containing all necessary rewards program information. This preliminary setup allows the legacy bankcard infrastructure to process rewards transactions without additional processing steps at the time of transaction, as the promotion code is already prepared and can be directly routed through existing transaction processing systems.
Data Source
AI summary
A method for applying promotion codes to a payment transaction using an input device in communication with a database is provided. The payment transaction includes a purchase made by a cardholder using a payment card over a payment card network. The method includes storing promotion data within the database including at least one promotional program having a qualifying number of rewards points for a rewards program, and storing rewards data within the database including a current number of rewards points accumulated by the cardholder. The method further includes providing access to the promotion data through the at least one input device including each promotional program having a qualifying number of rewards points that is less than the current number of rewards points for the cardholder, receiving a selected promotional program from the cardholder, and automatically applying the promotion codes associated with the selected promotional program to the payment transaction.