Virtual Payment Card System for Geographic Rewards and BNPL
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Solution Overview
Problem
Existing systems lack the ability to incentivize repeat transactions within a prescribed geographic area, provide rewards for purchases made using buy now pay later services, and efficiently manage payment authorization for multiple merchants, leading to limitations in customer loyalty programs and payment flexibility.
Innovation Solution
The system generates two virtual payment cards held in a customer's device wallet, one for earning and spending rewards and another for buy now pay later purchases, linked to the customer's banking institution for repayment. This system uses payment processing network data to track transactions, apply rewards, and authorize payments within a specific geographic area.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If merchants provide rewards programs allowing points to be earned and spent at any merchant location regardless of geography, then customer loyalty is improved, but the ability to incentivize repeat transactions within a specific geographic area is worsened
Solution Approach 1:
The patent implements geographic restrictions on rewards spending by checking the location of each merchant against the customer's prescribed geographic area. Rewards can only be spent at merchants within the defined geographic boundaries, creating local quality control that incentivizes repeat transactions within specific areas while maintaining the versatility of earning rewards at multiple merchants.
2Device complexity
If a single payment system is used for both rewards and buy now pay later services, then system simplicity is improved, but the ability to provide flexible payment options and track transactions accurately is worsened
Solution Approach 1:
The patent divides the payment processing into separate systems: one for handling rewards transactions and another for buy now pay later services. This segmentation allows each system to operate independently with its own rules and tracking mechanisms, providing payment flexibility and accurate transaction tracking while maintaining overall system simplicity through modular architecture.
3Speed
If payment authorization is handled for single merchant transactions, then authorization speed is improved, but the ability to manage payments across multiple merchants within a group is worsened
Solution Approach 1:
The patent implements pre-authorization for customers within a shopping center or geographic area before they make purchases at individual merchants. This preliminary action establishes payment credentials and authorization limits in advance, allowing for rapid transaction processing at each merchant while maintaining the ability to manage payments across multiple merchants within the group through the pre-established authorization framework.
Data Source
AI summary
A method for incentivizing repeat transactions within a prescribed geographic area using payment process network data includes acquiring a first set of transaction data from a payment network, creating a database of a second set of transaction data of transactions by an enrolled cardholder or merchant, identifying rewards eligible transactions and creating a database of rewards eligible transactions by enrolled cardholders at enrolled merchants, calculating rewards by querying the database of rewards eligible transactions and multiplying the amount by a factor, transmitting an instruction to a virtual card issuer to apply the rewards amount to a virtual payment card, receiving an authorization request to make a purchase using rewards, and determining if the transaction of the authorization request occurred within a prescribed geographic area in which rewards may be spent at enrolled merchants and if so authorization for the virtual card issuer to complete the transaction using the rewards.