Merchant Digital Wallet Loyalty Point Conversion System
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Solution Overview
Problem
Loyalty programs often fail to engage consumers as they require high thresholds for reward redemption, leading to unused points and decreased customer loyalty.
Innovation Solution
A computer-implemented system and method for a merchant-specific digital wallet that connects a merchant app with a funding source, allowing users to convert loyalty points into stored value for seamless redemption, including the option for split tender payments using alternative funding sources.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If high threshold requirements are set for reward redemption, then merchant control and program sustainability are improved, but consumer engagement and loyalty are worsened
Solution Approach 1:
The patent segments the reward redemption process into multiple tiers or levels, allowing consumers to redeem rewards at different threshold levels. This segmentation enables both high-value rewards requiring substantial points accumulation and lower-value rewards accessible at lower thresholds, thereby maintaining program sustainability while improving accessibility and consumer engagement.
2Reliability
If complex redemption processes are implemented, then fraud prevention and program control are improved, but user convenience and satisfaction are worsened
Solution Approach 1:
The patent introduces an intermediary system or platform that mediates between the consumer and the reward redemption process. This intermediary automatically verifies eligibility, validates transactions, and manages redemption workflows, thereby maintaining fraud prevention and program control while presenting a simplified, user-friendly interface to consumers that enhances convenience and satisfaction.
3Ease of operation
If low threshold requirements are set for reward redemption, then consumer engagement and satisfaction are improved, but program sustainability and merchant control are worsened
Solution Approach 1:
The patent implements dynamic parameter changes that allow the reward thresholds, redemption rates, and program parameters to be adjusted based on various factors such as consumer behavior patterns, program performance metrics, and merchant objectives. This enables the system to maintain consumer engagement through accessible rewards while ensuring program sustainability by adjusting parameters to control redemption rates and maintain adequate reward pools.
Data Source
AI summary
The invention relates to a computer-implemented system and method for loyalty integration to facilitate redemption of rewards using a mobile device. According to an embodiment of the present invention, a system and method comprise the steps of: connecting a merchant app, associated with a merchant, with a funding source associated with a financial institution, wherein the merchant app provides a merchant program to the user; identifying a number of points for conversion to stored value on the merchant app; converting the number of points to a stored value amount on the merchant app; loading the merchant app with the stored value; and responsive to a user request on the merchant app, performing a payment transaction for a purchase using the converted stored value.