Rewards System Computer Automating Rebate Crediting
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Solution Overview
Problem
Payment card loyalty programs face dilution due to ubiquity and lack of differentiation, leading to low redemption rates of reward coupons, and merchants struggle to effectively administer and utilize customer data for rewards programs.
Innovation Solution
Implementing a rewards system within a payment processing network, such as the Global Clearing Management System, that automatically credits rebates to cardholder accounts and charges merchants, using a rewards system computer to identify qualifying transactions and initiate payment transactions, thereby simplifying the administration and execution of rewards programs.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If reward coupons are distributed through traditional methods (store coupons, statement inserts), then customers can receive rewards, but redemption rates remain extremely low (less than 1%)
Solution Approach 1:
The system automatically credits rewards to customer accounts and processes redemptions without requiring manual coupon presentation. The payment processing network automatically identifies qualifying transactions and applies rewards, eliminating the need for customers to physically redeem coupons and enabling instant, seamless reward application at point of sale.
Solution Approach 2:
The patent replaces the mechanical coupon redemption system with an automated electronic processing system. Instead of physical coupons that must be manually presented and processed, the system uses automated transaction monitoring and electronic reward application through the payment processing network, eliminating manual intervention and enabling instant redemption.
2Adaptability or versatility
If merchants administer their own reward programs, then they can customize rewards for their customers, but they lack the expertise and ability to effectively use customer data
Solution Approach 1:
The payment processing network serves as an intermediary between merchants and customers for reward program administration. The system provides merchants with access to sophisticated reward management capabilities, customer data analytics, and automated processing infrastructure that would be difficult for individual merchants to develop independently, while still allowing merchant-specific customization.
Solution Approach 2:
The patent creates a universal reward management platform that can be used by multiple merchants across different industries. The system provides a standardized framework for reward program administration that handles data management, reward calculation, and transaction processing universally, while allowing each merchant to customize their specific reward offerings and programs.
3Adaptability or versatility
If multiple loyalty programs are offered, then customers have more choices, but the impact of individual programs is diluted and differentiation is lost
Solution Approach 1:
The system segments reward programs by merchant or industry while maintaining a unified processing platform. Each merchant's reward program is treated as a distinct segment with its own customization options and reward structures, allowing multiple programs to coexist without diluting individual program impact. The segmentation enables clear differentiation between programs while leveraging shared infrastructure.
Data Source
AI summary
Methods and systems for receiving purchase transaction data and identifying the purchase transactions that qualify for customer rebates. In an embodiment, a transaction clearing computer of a payment processing network receives the purchase transaction data from a plurality of acquirer financial institutions. A rewards system computer of the payment processing network identifies individual purchase transactions that qualify for customer rebates pursuant to rewards programs and based on the purchase transaction data, and then initiates crediting of rebate amounts from acquirer financial institutions to payment card accounts of cardholders at issuer financial institutions. The rewards system computer also initiates charging of the rebate amounts to merchant accounts of merchants associated with the individual purchase transactions that qualified for customer rebates.