Stored Value Card Transaction Processor with Dynamic Value-Added Awards
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Solution Overview
Problem
In the market for stored value cards, it is challenging for issuers and merchants to differentiate themselves and encourage consumers to purchase or redeem cards due to the abundance of options, and there is a need for systems that facilitate and control transactions, especially for clients with significant buying power who can command discounts.
Innovation Solution
A computer-implemented method and system that adds value to stored value cards beyond the purchase price by comparing card, terminal, and merchant identifiers to determine eligibility for value-added awards, modifying requests, and authorizing these awards through a transaction processor, enabling incentives and discounts for both card issuers and redeeming merchants.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If multiple stored value card options are provided in the marketplace, then consumer choice increases, but it becomes increasingly difficult for card issuers and merchants to distinguish themselves and encourage purchases
Solution Approach 1:
The system applies local quality by providing targeted value-added awards to specific cards based on their eligibility criteria. Each card can receive customized incentives (such as bonus amounts, discounts, or rewards) depending on its specific attributes, the merchant's promotion rules, and the transaction context. This localized customization allows individual cards to stand out in the marketplace without requiring all cards to be fundamentally different.
Solution Approach 2:
The system changes parameters by dynamically adjusting the value-added awards based on multiple variables including card type, merchant category, transaction amount, time of day, and promotional campaigns. The processor modifies card parameters (such as adding bonus value or applying discounts) to create differentiated purchasing experiences that encourage consumers to choose specific cards over others.
2Adaptability or versatility
If clients with significant buying power command discounts from merchants, then client leverage increases, but the transaction control and monitoring complexity increases
Solution Approach 1:
The system applies universality by creating a multi-functional platform that simultaneously serves multiple purposes: processing regular transactions, applying value-added awards, enforcing client discount agreements, monitoring transaction patterns, and generating reports. This universal system handles diverse transaction types and client requirements through a single integrated architecture, reducing the need for separate control mechanisms for each function.
Solution Approach 2:
The system implements feedback by continuously monitoring transactions and automatically adjusting value-added awards based on predefined criteria and real-time data. The processor receives transaction information, compares it against eligibility rules, and automatically applies appropriate incentives or discounts. This closed-loop feedback mechanism simplifies client leverage management by automating the control and monitoring processes rather than requiring manual intervention.
3Productivity
If value-added awards are automatically determined and added to stored value cards, then consumer incentive increases, but the processing system complexity increases
Solution Approach 1:
The system applies preliminary action by pre-configuring value-added award criteria, rules, and parameters in the database before transactions occur. Merchants and issuers can set up promotional campaigns, discount structures, and eligibility requirements in advance. When a transaction occurs, the processor simply retrieves and applies the pre-determined rules rather than calculating incentives in real-time, significantly reducing processing complexity while maintaining high consumer incentive levels.
Solution Approach 2:
The system uses an intermediary approach by introducing a centralized value-added award processor that mediates between card issuers, merchants, and consumers. This intermediary processor handles the complex logic of determining eligibility, calculating awards, and managing transactions, allowing the issuer and merchant systems to remain relatively simple. The processor acts as a buffer that absorbs complexity while presenting simple interfaces to all parties.
Data Source
AI summary
A computer implemented method for adding value to a stored value card in excess of the purchase price for the stored value card is provided. In one embodiment a stored value card transaction processor receives an activation or redemption request for a stored value card from a point of sale terminal. The activation or redemption request comprises at least one of a card identification, a point of sale terminal identification, a merchant identification, and a time of activation which is compared to data stored in a stored value card datastore to determine if the stored value card to be activated is eligible for a value added award. The processor then determines the value added award and modifies the request to include the value added award. The processor then transmits the modified request to the card issuer authorization system and receives a response which is forwarded to the point of sale terminal.