U.S. patent application number 17/571733 was filed with the patent office on 2022-04-28 for points-based payment system.
This patent application is currently assigned to VERRENCY HOLDINGS LIMITED. The applicant listed for this patent is VERRENCY HOLDINGS LIMITED. Invention is credited to Stephen John Cummins, David Cruzen Link, Euan Duncan Walker.
Application Number | 20220129877 17/571733 |
Document ID | / |
Family ID | |
Filed Date | 2022-04-28 |
![](/patent/app/20220129877/US20220129877A1-20220428-D00000.png)
![](/patent/app/20220129877/US20220129877A1-20220428-D00001.png)
![](/patent/app/20220129877/US20220129877A1-20220428-D00002.png)
![](/patent/app/20220129877/US20220129877A1-20220428-D00003.png)
United States Patent
Application |
20220129877 |
Kind Code |
A1 |
Link; David Cruzen ; et
al. |
April 28, 2022 |
POINTS-BASED PAYMENT SYSTEM
Abstract
Payment systems allowing credit and/or points to fund financial
transactions are provided. In one example, a payment system
comprises a credit device issued to a consumer enabling the
consumer to purchase products or services from a plurality of
merchants using funds from a credit account associated with the
consumer. The payment system comprises a payment network enabling
the plurality of merchants to receive payment from an issuer that
issues the credit device to the consumer. A funding device is
configured to access information regarding credit available from
the credit account, the funding device further configured to access
information regarding points available to the consumer. The funding
device is configured to use pre-established rules to determine the
use of available credit and available points for completing a
transaction with a first merchant of the plurality of merchants.
The transaction appears to the first merchant as a regular credit
card transaction.
Inventors: |
Link; David Cruzen;
(Sandringham, AU) ; Walker; Euan Duncan;
(Sandringham, AU) ; Cummins; Stephen John;
(Bulimba, AU) |
|
Applicant: |
Name |
City |
State |
Country |
Type |
VERRENCY HOLDINGS LIMITED |
Singapore |
|
SG |
|
|
Assignee: |
VERRENCY HOLDINGS LIMITED
Singapore
SG
|
Appl. No.: |
17/571733 |
Filed: |
January 10, 2022 |
Related U.S. Patent Documents
|
|
|
|
|
|
Application
Number |
Filing Date |
Patent Number |
|
|
15490095 |
Apr 18, 2017 |
11222322 |
|
|
17571733 |
|
|
|
|
International
Class: |
G06Q 20/20 20060101
G06Q020/20; G06Q 30/02 20060101 G06Q030/02; G06Q 20/24 20060101
G06Q020/24; G06Q 20/40 20060101 G06Q020/40; G06Q 20/38 20060101
G06Q020/38 |
Claims
1. A payment system comprising: a credit device issued to a
consumer to enable the consumer to purchase products or services
from a plurality of merchants using funds from a credit account
associated with the consumer; a payment network enabling the
plurality of merchants to receive a settlement payment from an
issuer that issues the credit device to the consumer; and a funding
device configured to access information regarding credit available
from the credit account, the funding device further configured to
access information regarding points available to the consumer;
wherein the funding device is configured to use pre-established
rules to determine the use of available credit and available points
for completing a transaction with a first merchant of the plurality
of merchants; wherein the transaction appears to the first merchant
as a regular credit card transaction; and wherein the points are a
representation of non-fiat currency.
2. The payment system of claim 1, wherein the first merchant is an
unrestricted merchant that requires no action regarding the
available points, requires no modification of a point-of-sale (POS)
terminal, and requires no membership or network of preferential
merchants.
3. (canceled)
4. The payment system of claim 1, wherein the funding device is
configured to determine whether the transaction is approved based
at least on the available credit and the available points.
5. The payment system of claim 4, wherein, when the transaction is
approved, the funding device sends an approval message to the first
merchant regardless of how the available credit and available
points are used to fund the transaction.
6. The payment system of claim 1, further comprising a points
processor configured to manage and store information regarding the
points available to the consumer.
7. The payment system of claim 1, further comprising a credit
processor configured to manage and store information regarding the
credit available to the consumer.
8. The payment system of claim 1, further comprising an account
management device configured to store the pre-established rules
regarding the use of available credit and available points for
completing transactions.
9. The payment system of claim 8, wherein the account management
device enables the consumer to provide input to establish the rules
regarding the use of available credit and available points.
10. The payment system of claim 9, wherein the consumer is
configured to provide the input to establish the rules using one of
a smart phone, a computer, a telephone call center, and a mailed
paper form.
11. (canceled)
12. The payment system of claim 1, wherein the credit device is one
of a credit card, a payment card, and a proxy device.
13. The payment system of claim 1, wherein, if the pre-established
rules define a transaction as being paid by points and the
available points are insufficient to cover the entire costs, the
pre-established rules may further define various alternatives, a
first alternative being a rejection of the transaction for
insufficient funds, a second alternative being the funding of the
transaction by the credit from the credit account, and a third
alternative being a partial funding of the transaction by points
and a partial funding of the transaction by credit.
14. The payment system of claim 1, wherein the funding device is
configured to use pre-established rules to determine the use of
available credit and available points after an original transaction
with the first merchant is conducted, and wherein the funding
device alters or modifies the original transaction to create a new
transaction based on the use of available credit and available
points.
15. A transaction management system comprising: a credit processor
configured to manage and store information regarding credit
available to a consumer; a points processor configured to manage
and store information regarding points available to the consumer,
the points being defined as a value of a non-fiat currency
representation; and a funding device configured to access
information regarding the available credit and available points;
wherein the funding device is configured to apply usage rules to
determine the use of available credit and available points for
completing a financial transaction between a merchant and the
consumer; and wherein the use of available points during the
financial transaction appears to the merchant as a regular credit
card transaction.
16. The transaction management system of claim 15, wherein the
funding device uses at least a portion of the available points
without any action required on the part of the merchant and without
modification of a point-of-sale (POS) terminal associated with
merchant.
17. The transaction management system of claim 15, wherein the
funding device is configured to determine whether the transaction
is approved based at least on the available credit and the
available point, and wherein, when the transaction is approved, the
funding device sends an approval message to the merchant regardless
of how the available credit and available points are used to fund
the transaction.
18. The transaction management system of claim 15, further
comprising an account management device configured to store the
pre-established rules regarding the use of available credit and
available points for completing transactions.
19. A method for conducting a financial transaction, the method
comprising the steps of: during a financial transaction, obtaining
information regarding an account associated with a consumer;
deducting points and/or credit from the account based on
pre-established usage rules regarding the use of points and credit
to fund the financial transaction, the points being a non-fiat
currency representation; and providing a settlement payment to a
merchant offering products and/or services to the consumer during
the financial transaction such that the financial transaction
appears to the merchant as a regular credit card transaction.
20. The method of claim 19, further comprising the step of enabling
the consumer to provide input to establish the usage rules via one
of a smart phone, a computer, and a telephone call center.
21. (canceled)
22. The method of claim 19, wherein the step of deducting points
and/or credit from the account based on the pre-established usage
rules further comprises: determining if a financial transaction to
be paid at least partially by points includes available points
sufficient to cover the costs; and if the available points are
insufficient to cover the costs, performing one of the following:
1) rejecting the transaction for insufficient funds, 2) funding the
transaction by credit from a credit account, and 3) partially
funding the transaction by points and partially funding the
transaction by credit.
23. The method of claim 19, wherein the step of deducting points
and/or credit from the account based on pre-established usage rules
is executed after the step of providing the settlement payment to
the merchant, and further comprising conducting an original credit
card transaction with the merchant and modifying the original
credit card transaction to create a new transaction based on the
use of available credit and available points.
Description
BACKGROUND
1. Field of the Invention
[0001] The present disclosure generally relates to financial
services, and more particularly relates to payment systems for
settling financial transactions.
2. Description of the Related Art
[0002] Plastic payment cards, such as credit cards, were introduced
in the United States in the late 1940s as a way for a bank's most
trusted customers to pay for meals and travel without carrying
large amounts of cash. Since then, billions of payment cards have
been issued by tens of thousands of banks.
[0003] Over the years, the payment card industry has developed
various devices and processes to prevent fraud and to control the
way that credit cards and other payment cards are used. Merchants
adhere to various protocols to allow transactions to be conducted
using credit cards, debit cards, microchip-embedded cards (e.g.,
EMV cards or smart cards), NFC-enabled cards, proxy cards, and
other related payment devices. A consortium of card issuing
networks created EMVCo, named for EuroPay, MasterCard, and Visa,
which are the original founders of the organization. The consortium
now also includes American Express, Discover, JCB, and Union Pay as
equity partners.
[0004] In addition to regular credit accounts, many banks have
created loyalty programs to encourage consumers to continue to use
their cards. At present, there are many different types of loyalty
programs. However, these loyalty programs are typically limited in
the ways that consumers can be compensated for using the cards. For
example, a consumer might receive cash back, rewards, points, or
may be rewarded in other ways. With reward points, the financial
institutions normally limit how a user can apply the points, such
as by providing a limited selection of products or vouchers from a
particular catalog related to the bank's partner merchants. Also, a
retrospective use of points can be used to provide credit for a
purchase that has already been made. The user may also be limited
in the use of points only at a point-of-sale (POS) with a specific
merchant, where the POS terminal has been altered to allow payment
with points. Furthermore, the user may be limited by conventional
loyalty programs in that points are used to replace cash only when
purchasing goods from a specific merchant (typically the issuer of
the points) on their own website.
[0005] Therefore, a need exists for a financial system that
includes a loyalty program with fewer limitations and restrictions.
Such an unrestricted system would be a desirable service for many
consumers and may attract more consumers to use the program
described in the present disclosure. With a more universal loyalty
program, credit card issuers and banks may be able obtain and keep
more satisfied consumers.
SUMMARY
[0006] The present disclosure describes systems and methods for
conducting financial transactions. In particular, payment systems
are described herein allowing transactions to be conducted such
that funding is received from both a credit balance and a points
balance. These transactions may be conducted with any merchant,
since they appear to the merchants as regular credit card
payments.
[0007] In one exemplary embodiments, a payment system comprises a
credit device issued to a consumer to enable the consumer to
purchase products or services from a plurality of merchants using
funds from a credit account associated with the consumer. The
payment system further comprises a payment network enabling the
plurality of merchants to receive payment from an issuer that
issues the credit device to the consumer. In addition, the payment
system comprises a funding device configured to access information
regarding credit available from the credit account, the funding
device further configured to access information regarding points
available to the consumer. The funding device is configured to use
pre-established rules to determine the use of available credit and
available points for completing a transaction with a first merchant
of the plurality of merchants. Also, the transaction appears to the
first merchant as a regular credit card transaction.
[0008] According to another exemplary embodiment, a transaction
management system is provided. The transaction management system in
this embodiment comprises a credit processor configured to manage
and store information regarding credit available to a consumer and
a points processor configured to manage and store information
regarding points available to the consumer. The transaction
management system further includes a funding device configured to
access information regarding the available credit and available
points. The funding device is configured to apply usage rules to
determine the use of available credit and available points for
completing a financial transaction between a merchant and the
consumer. The use of available points during the financial
transaction appears to the merchant as a regular credit card
transaction.
[0009] In yet another embodiment, the present disclosure provides a
method comprising a step of, during a financial transaction,
obtaining information regarding an account associated with a
consumer. The method also includes the step of deducting points
and/or credit from the account based on pre-established usage rules
regarding the use of points and credit to fund the financial
transaction. Also, the method includes providing payment to a
merchant offering products and/or services to the consumer during
the financial transaction such that the financial transaction
appears to the merchant as a regular credit card transaction.
[0010] Various implementations described in the present disclosure
may include additional systems, methods, features, and advantages,
which may not necessarily be expressly disclosed herein but will be
apparent to one of ordinary skill in the art upon examination of
the following detailed description and accompanying drawings. It is
intended that all such systems, methods, features, and advantages
be included within the present disclosure and protected by the
accompanying claims.
BRIEF DESCRIPTION OF DRAWINGS
[0011] The features and components of the following figures are
illustrated to emphasize the general principles of the present
disclosure and are not necessarily drawn to scale. Corresponding
features and components throughout the figures may be designated by
matching reference characters for the sake of consistency and
clarity.
[0012] FIG. 1 depicts a block diagram of a payment system according
to an embodiment of the present invention.
[0013] FIG. 2 depicts a block diagram of the transaction management
system shown in FIG. 1, according to an embodiment of the present
invention.
[0014] FIG. 3 depicts a diagram of interactions between a consumer
and other players in the payment system, according to an embodiment
of the present invention.
[0015] FIGS. 4-6 depict diagrams of various payment system
configurations according to various embodiments of the present
invention.
DETAILED DESCRIPTION
[0016] The present invention is directed to payment devices, such
as, for example, plastic payment cards, virtual cards, wearable
commerce devices, components embedded in mobile devices,
applications running on mobile devices or computers, and other
payment credentials. The present invention is also directed to
systems and methods for conducting financial transactions using the
payment devices. The present invention may include a commercially
viable computing service, mobile application, and web site and may
be implemented in conjunction with an issuing institution using
payment cards or other payment devices as described herein.
[0017] The present invention introduces novel features associated
with the use of existing payment devices. The present invention may
include the management of credit and/or points used for making
purchases. In the present disclosure, the term "points" or "loyalty
points" may be defined as any type of non-fiat currency
representation having some value for making a purchase in lieu of
money. In some cases, the "points" may include some stored value,
such as bitcoin, foreign currencies, etc. In some embodiments, the
non-fiat currency representation does not have any intrinsic value
and is not a commodity. The credit and/or points may be related to
a loyalty program in which financial transactions can be conducted
anywhere payment devices are accepted and wherein "points" or other
type of non-fiat currency can be applied to fully or partially fund
the transaction. The use of points or other non-fiat value
representations for making these payments can be done without any
actions on the part of the merchants. Therefore, points may be
applied to purchases at any businesses, not merely those businesses
that are part of a select group controlled by typical loyalty
programs.
[0018] The present invention may be applied in a universal manner
to allow any merchant, which is already set up to conduct
transactions using a valid credential, to receive payment for
products and services. Although the merchants are reimbursed by the
issuing institutions in a real financial exchange, the issuing
institutions may allow payment from the consumer using regular
credit and/or using points available in this novel loyalty program.
The term "valid credential" is used herein to represent a valid
funding instrument, which may be, but is not limited to, a credit
card, charge card, debit card, direct deposit account, savings
account, checking account, loyalty card, virtual card, gift card,
proxy card, Internet of things (IoT) device, components and/or
applications embedded in mobile devices, or other cards or
devices.
[0019] The valid credentials described in the present disclosure
may be multimodal payment devices, which can be used in various
modes for different types of financial transactions. Some modes may
include those involving a microchip embedded in the device, those
involving near field communication (NFC) components, those
involving a magnetic stripe, those involving entering the device
number and card verification value (CVV) in an online transaction,
and/or other modes.
[0020] FIG. 1 is a block diagram illustrating an embodiment of a
payment system 10 in which payments can be made using any
combination of points and credit. The payment system 10 includes a
payment network 12, which may include wired and wireless
infrastructures for enabling communication between various nodes in
the payment system 10. A plurality of merchant terminals 14 are
configured in communication with the payment network 12. The
merchant terminals 14 may include point-of-sale (POS) terminals,
online purchasing nodes, product/service call centers, etc., for
accepting payment from a consumer in exchange for a product or
service. Normally, merchant terminals 14 in this arrangement are
incapable of communicating with each other. Instead, the merchant
terminals 14 may communicate with one or more issuing institutions
16.
[0021] The issuing institutions 16 may include banks, credit card
issuing companies, or other financial institutions that issue a
credit card, payment card, debit card, proxy card, or other
credential mechanism used for making a purchase. The issuing
institutions 16 may issue payment devices, such as credit cards or
other payment cards to various consumers. In some embodiments, the
user may use another type of proxy credential other than a payment
card, such as a mobile device. The issuing institutions 16 may
include servers, web servers, software running on servers, hardware
appliances, or any suitable intermediary computing devices for
providing various transaction services.
[0022] The merchant terminals 14 may include POS terminals or other
nodes used at a number of business establishments. In fact, the
merchant terminals 14 may represent all merchants capable of
requesting approval of the use of a customer's credit card for a
purchase, which of course includes a wide breadth of merchants. The
issuing institutions 16 may represent all major credit card
companies that have agreements with the merchants. For example, the
major credit card companies may include at least Visa.TM.,
MasterCard.TM., American Express.TM., Discover.TM., and others.
[0023] The term "merchant terminal" is used to describe a physical
terminal, website, or other devices for providing functionality by
a merchant at which a payment is originated. Merchant terminals can
be embedded in POS equipment and can be "virtual" as in ecommerce
website processing. Also, merchant terminals can be background
devices where no device, card, customer, merchant, or goods are
involved, such as when recurring payments are initiated for
services. The "merchant terminal" may represent POS devices,
merchant online systems, and other mechanisms owned/controlled by
the merchant to conduct various modes of purchase. The merchant
terminals may include any merchant systems used in different
payment modes using one or more types of technologies (e.g., EMV
chip, magnetic stripe, NFC, e-commerce, etc.).
[0024] The payment network 12 may include a wide area network, the
Internet, private networks, and/or other publicly accessible
networks. Also, the payment network 12 may include local area
networks associated with various merchants. The payment network 12
may be a private network, local area network, a virtual private
network (VPN), or a public network with a high level of encryption.
The payment network 12 may also be in communication with one or
more cellular networks in communication with cellular antennas
and/or satellites. The merchant terminals 14 and issuing
institutions 16 may be connected by one or more wired or wireless
connections to the payment network 12 to enable electronic
communication between any merchant terminal 14 and respective
issuing institutions 16 representing the merchants 14.
[0025] During a purchasing operation, the user to whom a payment
device has been issued may use the payment device as payment for
merchandise or services. The payment device can be presented to a
merchant at one of the merchant terminals 14. It should be noted
that several merchant terminals 14 may be associated with the same
merchant for obtaining account information through various modes.
In fact, multiple merchant terminals 14 may be associated with a
single device used by a merchant for obtaining information at a
single POS device.
[0026] Accordingly, the POS device may obtain information from the
payment device by a first mode utilizing a microchip embedded in
the device or by additional modes, which may involve the use of the
NFC components or magnetic stripe on the device. In other
transactions, such as online or telephone transactions, the device
number printed and/or embossed on the device may be entered
electronically or by an order-taking representative of the
merchant. An alternative embodiment may include the payment system
10 in which a credit card or other credential mechanism is devoid
of a printed and/or embossed account number. Also, the payment
device may be devoid of a magnetic stripe, or one of the other
modes. In this case, the user may use the payment device at a
merchant terminal using only the microchip and/or NFC components,
or the modes remaining on the device.
[0027] According to alternative embodiments, the payment system 10
may instead be configured as a system for performing non-payment
actions. Instead of conducting various functions related to
financial accounts as disclosed herein, the non-payment system may
process other types of credentials for entities other than issuing
institutions.
[0028] During a typical credit card transaction, a card is read by
the merchant terminal 14 and information regarding the credit card
number and purchase amount is transmitted to the respective issuing
institution 16 via the payment network 12. The issuing institution
16 immediately checks the credit balance associated with the credit
card and determines if the available credit afforded to the user at
the time of purchase is sufficient to cover the cost of the items
or services to be purchased. If so, the issuing institution 16
sends a message back to the respective merchant terminal 14 to
indicate that the purchase has been approved. However, if the
available credit is insufficient to cover the cost, the issuing
institution 16 returns a message indicating the account has
insufficient funds and the purchase is rejected.
[0029] Thus, the above description defines a typical purchasing
arrangement for using a credit card at any merchant 14 equipped to
handle credit card payments with one or more issuing institutions
16. In addition to the conventional purchasing system described
above, the payment system 10, according to various embodiments of
the present invention, further includes a transaction management
system 20. The transaction management system 20 may be associated
with one particular credit card company, one issuing institution
16, or even a group of issuing institutions 16 in some embodiments.
Instead of basing an approval or rejection of a purchase solely on
credit availability, the transaction management system 20 may
further base a potential purchase on a combination of available
credit and points (e.g., loyalty points or other non-fiat currency
representations).
[0030] Typically, loyalty programs are limited in several ways, as
mentioned above. The numerous types of loyalty programs in use
today usually limit the customer to products that are pre-selected
by the loyalty programs. Sometimes the customer is limited to
selecting from a catalog, which, of course, is limited to just the
items in that catalog. Points may be used in some programs to
purchase items from a specific merchant using the merchant's own
website. In some situations, the customer may retrospectively use
points to provide a credit for a purchase already made. Some
loyalty programs limit the use of points at only specific POS
terminals where specific merchants are part of an approved group.
In this case, the POS terminals may have been specifically designed
or modified to allow payment with points. Nevertheless, it should
be noted that these programs are limited to only certain products
and/or only certain merchants. It does not allow a customer to go
outside this network of merchants to purchase any items using these
points.
[0031] However, beyond the scope of conventional loyalty programs,
the transaction management system 20 of the payment system 10
allows a consumer to purchase items from an unlimited number of
merchants 14 for an unlimited number of products or services.
Therefore, the payment system 10 of the present invention does not
restrict a consumer regarding how points are applied. The
transaction management system 20 allows a customer to utilize
points or other non-fiat currency representation of one or more
loyalty points programs on any purchase where credit cards or other
similar credential mechanisms are accepted.
[0032] The transaction management system 20 is unique in that it
allows loyalty points of all sorts to be used to fund part, or all,
of any transaction at any merchant terminal 14 connected in the
payment network 12. The transaction management system 20 includes
novelty in that points can be used anywhere an existing card
payment can be received, without modification of the merchant
terminal 14. Also, in some embodiments, a proxy card can be used in
place of a credit card or the like to access the points. Therefore,
the points associated with the loyalty program associated with the
transaction management system 20 can be used to fund transactions
in real time, rather than requiring the consumer to use an
e-commerce site.
[0033] In addition, the transaction management system 20 may be
configured to include rules for how the points and credit are used
for making purchases. In some embodiments, the decisions for
establishing the usage rules may be made by the consumers prior to
conducting transactions. Also, the consumer is also allowed to
determine how to use points and/or credit at the merchant terminal
14 itself, allowing real time decisions regarding points usage.
[0034] According to the embodiment of FIG. 1, the issuing
institution 16 may provide a consumer with a specific payment
device, such as a specific credit card, a proxy device, or other
payment credential. The proxy card in this example may operate like
a typical credit card, but may be configured differently in some
ways. The payment device may include elements similar to a credit
card, such as a magnetic strip, a microchip, a displayed account
number, etc., to allow the input of the credit account and/or
points account with the merchant terminal 14.
[0035] The usage rules for determining how points and/or credit are
used for making a purchase can be pre-established by the issuing
institution 16 and/or by the consumer. The rules may define various
aspects of purchases, such as the type of transactions to which
points might be applied. The consumer may select if all
transactions or certain classes of transactions are to be funded by
the available points. The consumer may even select specific
transactions for certain items or for any items purchased from
specific merchants. These selections can be made through the
transaction management system 20, as described in more detail
below.
[0036] FIG. 2 is a block diagram illustrating an embodiment of the
transaction management system 20. In the embodiment of FIG. 2, the
transaction management system 20 includes an account management
device 24, a funding device 26, a credit processor 28, a credit
database 30, a points processor 32, and a points database 34. The
transaction management system 20 may be configured to accommodate
communication with multiple users (e.g., consumers) and with
multiple merchants 14. In some embodiments, the transaction
management system 20 may also be configured to communicate with
multiple issuing institutions 16.
[0037] The transaction management system 20 may include one or more
computer systems, processors, microprocessors, or other computing
devices for managing the accounts associated with loyalty points
for each of a plurality of consumers. In some embodiments, the
transaction management system 20 may be configured as a single
computer system or server operating at a single location. In other
embodiments, the transaction management system 20 may include
multiple processing devices that may be located at a single
facility or in multiple locations.
[0038] Furthermore, it should be noted that each of the account
management device 24, funding device 26, credit processor 28, and
points processor 32 may include one or more processing devices or
systems operating at one or more locations in the payment network
12. Each of the devices and processors 24, 26, 28, 32 may include
any combination of hardware, software, and firmware for performing
various functions of the transaction management system 20, which
collectively is able to control the operations of managing both a
credit account and a points account associated with a user. It
should further be noted that the transaction management system 20
may perform the various actions for any number of users (e.g.,
consumers) having any number of accounts from any of the issuing
institutions 16.
[0039] Generally, the account management device 24 enables a user
(e.g., consumer) to access information regarding the points
available to the user, the monetary value of these points with
respect to any merchant, etc. Also, the account management device
24 may include information defining the terms of agreement for use
of the loyalty program and other information describing how the
loyalty program works.
[0040] A more significant feature of the account management device
24 is that it allows the user, under certain conditions, to
establish how points are to be applied to future purchases. A user
may wish that the points are only used at certain types of
establishments (e.g., restaurants, gas stations, etc.). Also, the
user may determine how many or what percentage of the points are
used in certain situations. For example, the user may wish that as
many points as available are used first and then credit is used to
rectify the purchase if the available points are insufficient to
completely cover the costs of the purchase. Other various scenarios
and conditions may be configurable. In some cases, certain
restrictions may apply to how the usage rules are established and
may be determined by the issuing institution.
[0041] It should be noted that the account management device 24 may
be accessible to the user by various methods. The account
management device 24 may be a website or other Internet banking
platform that the user can access to enter the usage rules.
Alternatively, the account management device 24 may be a call
center that the user can call to enter the rules through an
operator at the call center. Also, the account management device 24
may include a mobile network protocol allowing a user to enter
rules via a smart phone or other mobile device.
[0042] The funding device 26 is a central component in the
transaction management system 20 for gathering information from the
other components to determine how to fund a certain purchase for a
certain user and also to determine if available credit and/or
points are sufficient to make the purchase. The funding device 26
obtains the available points for the specific user from the points
processor 32. Also, the funding device 26 obtains the available
credit and the pending purchase cost from the credit processor 28.
Furthermore, the funding device 26 obtains the usage rules from the
account management device 24.
[0043] With this information, the funding device 26 calculates if
the purchase can be made according to the usage rules. If not, the
funding device 26 communicates an error to the credit processor 28,
which then sends a message back to the merchant terminal 14 that
the funds are insufficient to make the purchase. If the credit
and/or points are sufficient to cover the cost of the purchase, the
funding device 26 communicates to the points processor 32 to deduct
the appropriate number of points from the user's points account in
the points database 34. Also, the funding device 26 communicates to
the credit processor 28 to deduct the appropriate credit from the
user's credit account in the credit database 30. The funding device
26 or credit processor 28 may include a settlement account
associated with the loyalty points program that can be updated as
needed. For example, such a settlement account may control the
transfer of money to settle the respective accounts in a batch mode
where multiple settlements are conducted in a batch and/or in
real-time mode where accounts are settled during each
transaction.
[0044] The points database 34 may include one or more files and/or
application programming interfaces (APIs) stored as batch update
files and/or in real time. In some embodiments, another database
may be configured in the transaction management system 20 to record
information other than credit and points. For example, consumer
information, such as names, addresses, phone numbers, credit
scores, etc. may be stored in the databases 30, 34 as needed.
[0045] The credit processor 28 is configured to access the secured
credit database 30 that stores the credit amounts for a plurality
of credit accounts belonging to a plurality of consumers. The
credit processor 28 receives the purchase request from the merchant
terminal 14 via the payment network 12 and communicates the request
to the funding device 26, which then processes the request to
determine if the available credit and/or points are sufficient to
cover the requested purchase.
[0046] The points processor 32 is configured to access the secured
points database 34 that stores the point totals for each of a
plurality of loyalty accounts belonging to a plurality of
consumers. The points processor 32 works with the funding device 26
to communicate the available points for a particular consumer and
then deducts the points that are used for various purchases as
dictated by the funding device 26.
[0047] FIG. 3 is a diagram illustrating the various ways that a
consumer 40 performs actions with various players in the payment
network 12. For example, in a first interaction, the consumer 40
communicates with the issuing institutions 42 to apply for a credit
card or loyalty program. Also, the consumer 40 can make payments
for the purpose of paying down or paying off debts to the issuing
institution 42 from previous purchases made on credit. This
interaction may include the consumer 40 sending a bank check to the
issuing institution 42, using an online banking website associated
with the issuing institution 42 to make a payment, calling a call
center to make a payment, or other suitable method for making
payments.
[0048] A second interaction includes the consumer 40 working with
an account management device 44 (e.g., the account management
device 24 of the transaction management system 20 shown in FIG. 2).
This interaction includes the entry of usage rules, as described
above, for establishing how the credit and/or points are to be
applied to future purchases. In some embodiments, the consumer 40
may alter the usage rules with the account management device 44 at
the point of purchase. In this manner, the rules, under certain
conditions, may be changed while the consumer 40 is making a
purchase. The changes to the usage rules may be made via a smart
phone connection to the account management device 44 via a mobile
network, or in other cases may be made through the merchant
terminal 14, if it is so equipped.
[0049] The third interaction is the interaction between the
consumer 40 and the merchant 46. The merchant 46 may be associated
with one or more of the merchant terminals 14 shown in FIG. 1. The
consumer 40 may present a credit card or other credential mechanism
to the merchant 46 for paying for a purchase. In some cases, the
credit card may be swiped in a card reading device of a POS
terminal or inserted into a device of the POS terminal for reading
a microchip on the card. Also, card numbers may be manually
entered, a NFC device may communicate with the card, or other
methods may be used for accessing the consumer's credit/loyalty
account.
[0050] FIG. 4 is a block diagram illustrating an embodiment of the
use of a payment system. A consumer 50 may interact with an account
management device 56, which may be associated with the account
management device 24 of the transaction management system 20. The
account management device 56 may include software or firmware
running on a computing device, machine, or other suitable system,
to allow the consumer 50 to establish usage rules for defining how
credit and/or points are applied to purchases. Also, the consumer
50 interacts with a merchant 52 to initiate a payment process
according to the teachings described in the present disclosure.
[0051] During a purchase, the merchant 52 communicates the
consumer's credentials (e.g., credit card account number) to the
credit processor 60 via the payment network 54. The funding device
58 receives the purchase details and available monetary credit from
the credit processor 60 and receives the available points from a
points processor 62 associated with a loyalty program. Also, the
funding device 58 receives usage rules from the account management
device 56. In some instances, the account management device 56 may
provide real time usage rules if the consumer 50 decides to alter
the rules at the point of purchase.
[0052] The funding device 58 obtains four pieces of information:
the available credit, the available points, the purchase amount,
and the usage rules. From these four elements, the funding device
58 performs two main actions. First, the funding device 58
determines if the available credit and/or points are sufficient to
cover the purchase amount based on the usage rules. If the funding
device 58 determines that the purchase is acceptable considering
the usage rules, the purchase is allowed to proceed and the funding
device 58 signals to the merchant 52 via the credit processor 60
and payment network 54 that the purchase is approved. It should be
noted that the merchant 52 may be unaware of the actions of the
funding device 58 and may be unaware that the approval may be
partially or wholly based on points instead of credit. However,
since the merchant 52 will receive payment for the purchase from a
settlement account, these details may not be of concern to the
merchant 52.
[0053] The second action of the funding device 58 is an operation
in response to the determination of approval or disapproval of the
purchase. If the purchase is approved, the funding device 58
notifies the merchant 52 that the purchase is approved. If not, the
funding device 58 notifies the merchant 52 that the purchase is not
approved, such as, for example, on the grounds of insufficient
funds. If approved, the funding device 58 notifies the credit
processor 60 that a certain amount of credit, if any, should be
deducted from the consumer's account. The funding device 58 also
notifies the points processor 62 that a certain number of points,
if any, should be deducted from the consumer's points account
related to the loyalty program when the purchase is approved. In
lieu of points, other non-fiat currency values, such as bitcoin or
foreign currencies, may be deducted from an account.
[0054] Prior to processing a transaction, an issuer (e.g., issuing
institution 16 shown in FIG. 1) may verify the value available to
fund a transaction from the loyalty program's points processor 62.
This verification will be done directly or via the funding device
58. At the merchant 52, a user would make a payment using their
credit card or proxy card, as per normal purchasing processes, and
information related to the transaction would be forwarded to the
credit processor 60. Therefore, there is no interaction between the
merchant 52 and the loyalty program (i.e., points processor 62).
The merchant 52 is not required to take any special actions
regarding points or to use any special merchant devices other than
a typical merchant terminal or POS terminal as is used for normal
transactions.
[0055] If the consumer 50 has selected to fund a transaction using
points, the funding device 58 will check the value of the loyalty
points available from the points processor 62. If sufficient to
cover the cost of the transaction, then the points value will be
reduced, and an approval will be sent to the merchant 52 as if the
transaction had been fully funded from a regular payments account.
A settlement processor, which may be part of the funding device 58
or credit processor 60, may be used to settle accounts when the
purchase is approved. Settlement may be made in real-time or in a
batch mode in which multiple settlements are conducted in a certain
timeframe.
[0056] If the points value is insufficient to cover the cost of the
transaction, the system will then perform one of several options,
depending on the configuration or pre-established usage rules.
First, the funding device 58 may reject the transaction returning
an insufficient funds error. Alternatively, the funding device 58
may fund the entire transaction from an alternative funding source,
such as a credit account. Another action may include funding the
transaction with as many points as possible from the available
points and then funding the balance of the transaction value from
an alternative funding source. Of course, the alternative funding
source may include the credit account managed by the credit
processor 60. The funding device 58 is configured to use a
pre-configured calculation for the conversion of loyalty points to
a monetary value.
[0057] In some implementations related to FIG. 4, a customer could
use an application, web site, call center, or other means to
communicate with the account management device 56 to indicate that
all transactions, transactions meeting specific criteria, or
individual transactions are to be funded from a specific loyalty or
points program. After the consumer 50 conducts a typical
transaction using a standard payment instrument, the processing of
the transaction proceeds according to normal procedures, which may
include the procedures described in the present disclosure or even
procedures of typical financial transaction. However, in this
embodiment, a further series of actions is performed to alter the
original transaction.
[0058] After a payment has been successfully completed, the
transaction would be forwarded to the funding device 58, which will
check the available value of the loyalty points, stored values,
gift cards, or other funding sources. If the value of points and
other sources are sufficient to cover some, or all, of the
transaction cost, then the original transaction record will be
altered or reversed, and a new record can be created to indicate
the full or partial use of points to fund the transaction.
Therefore, the system of FIG. 4 is configured to convert a
transaction from one based solely on credit to one based on points
and credit. This can be done without any action required by the
consumer 50 or merchant 52, but instead is performed automatically
in the background.
[0059] FIG. 5 is a diagram illustrating another payment arrangement
similar to the arrangement shown in FIG. 4. The embodiment of FIG.
5 includes a consumer 66, merchant 68, payment network 70, account
management device 72, credit processor 74, and points processor 76.
In this embodiment, the funding device of FIG. 4 may be
incorporated into the credit processor 74. Many of the same
operations described above may be performed to allow financial
transactions to be based on loyalty points, gift cards, or any
combination of loyalty or rewards programs.
[0060] In one implementation, a customer could use an application,
web site, call center, etc., to indicate that a transaction, all
transaction, or transactions meeting specific criteria, are to be
funded from a specific loyalty or points program. The customer
would make a payment using a standard payment instrument, with the
payment being sent to the payment issuer per the normal method,
whereupon the issuer, via the credit processor 74, will check the
available value of the loyalty points, stored values, gift card
values, or other funding sources.
[0061] If sufficient to cover the cost of the transaction, then the
points value will be reduced, and an approval will be sent to the
merchant 68 as if the transaction had been fully funded from a
regular payments account, and the value of the loyalty account
reduced as appropriate.
[0062] If the points value is insufficient to cover the cost of the
transaction, the credit processor 74 will then act in one of
several ways, depending on configuration or pre-established usage
rules communicated by the account management device 72. One way to
act when it is determined that the points value is insufficient is
to reject the transaction returning an insufficient funds error.
Another action may include funding the entire transaction from an
alternative funding source, such as a credit account. Lastly, the
transaction can be funded with as many points as possible, and then
the balance of the transaction value can be funded from an
alternative funding source. In the second and third instances, the
result to the merchant 68 would be as per a regular payment being
funded.
[0063] In one implementation of the arrangement of FIG. 5, a
customer could use an application, web site, call center, to
indicate to the account management device 72 how points are to be
applied. The consumer 66 may include that all transactions,
transactions meeting specific criteria, or specific transactions
are to be funded from a specific loyalty or points program managed
by the points processor 76.
[0064] In some embodiments, the customer could make a payment using
a standard payment instrument, with the payment being sent to the
payment issuer for processing per the normal method. However, after
the payment has been successfully completed, the credit processor
74 will check the available value of the loyalty points, stored
values, gift cards, or other funding sources to see if the original
transaction should be modified. Since the original transaction may
already be completed, the consumer 66 and merchant 68 can go on
without regard to the background operations of the credit processor
74.
[0065] Thus, if the credit processor 74 determines that the value
of points or other rewards are sufficient to cover some, or all, of
the original transaction cost, then the credit processor 74 alters
or reverses the original transaction record and creates a new
record. The new record will indicate that the transaction has been
funded fully or partially through the use of points. The credit
processor 74 may include a settlement module to settle the various
accounts when the transactions are approved.
[0066] FIG. 6 is a block diagram illustrating another payment
arrangement similar to the embodiments shown in FIGS. 4 and 5. In
FIG. 6, the implementation includes a consumer 80, merchant 82,
payment network 84, credit processor 86, and a points processor 88.
This arrangement may include the incorporation of the functionality
of the account management device 56, 72 into the credit processor
86. The credit processor 86 may be an issuing institution 16 or
other credit managing system.
[0067] In one implementation, a customer (i.e., consumer 80) would
be issued a standard payments instrument, such as a credit card,
which was tied to a specific loyalty or points program. The
customer would make a payment using the payment instrument, with
the payment being sent to the payment issuer per the normal method,
whereupon the credit processor 86 or issuer will check the
available value of the loyalty points, stored values, gift cards,
rewards, cash back bonuses, or other funding sources.
[0068] If sufficient to cover the cost of the transaction, then the
points value will be reduced from the loyalty points account by the
points processor 88, and an approval will be sent to the merchant
82 as if the transaction had been fully funded from a regular
payments account. If the points are insufficient to cover the cost
of the transaction, the system of FIG. 6 may, depending on various
configurations or pre-established rules, 1) reject the transaction
returning an insufficient funds error to the merchant 82, 2) fund
the entire transaction from an alternative funding source (such as
a credit account), or 3) fund the transaction with as many points
as possible while funding the balance of the transaction value from
an alternative funding source. In configurations 2 and 3, the
result to the merchant 82 would be as per a regular payment being
funded.
[0069] In another implementation of the arrangement of FIG. 6, the
consumer 80 may be issued a payment device, such as a credit card,
which was tied to a specific loyalty or points program. The
customer would make a payment using the payment device, with the
payment being sent to the payment issuer or credit processor 86 for
processing per the normal method.
[0070] However, according to other embodiments, after payments have
been successfully completed, the issuer or credit processor 86 will
check the available points (or other rewards, values, funds, etc.)
from the points processor 88. If the value of points is sufficient
to cover some, or all, of the transaction cost, then the original
transaction record will be altered or reversed, and a new record
will be created to indicate the full or partial use of points to
fund the transaction.
[0071] Therefore, in some implementations using the systems of
FIGS. 4-6, a payment process based on points and/or credit may be
conducted after a regular transaction is conducted. After
processing the transaction as per typical payment practices, the
issuer may verify the points value available, after the fact, to
fund the transaction from a loyalty/points scheme of the loyalty
program 62, 76, 88. This verification may be done directly or via
funding device 58 or credit processor 74, 86.
[0072] If the user has selected to fund the transaction using
points, the funding device 58 or credit processor 74, 86 can check
the value of the loyalty points available from the loyalty program
62, 76, 88. If sufficient to cover the full or partial cost of the
transaction, then the transaction can be reversed in the issuer's
system and a new transaction is created. Although the first
transaction may be complete, this original transaction is reversed
and the new transaction, which may be based at least partially with
points, is conducted. The net effect is the same and the merchant
52, 68, 82 would have a normal payment experience. Even the
consumer 50, 66, 80 may be unaware of the new transaction being
conducted. However, the consumer may check his or her account to
see how the transaction was funded. The new transaction may be
funded fully or partially with points of the loyalty program 62,
76, 88. Settlement of funds would be managed via a process agreed
between the issuer and points/loyalty program. Multiple settlement
processes may take place if a transaction is reversed and redone.
In other embodiments, a single settlement process may be conducted
after the transaction is reversed to simplify the account settling
process.
[0073] The implementations described herein represent a number of
possible implementations and examples and are not intended to
necessarily limit the present disclosure to any specific
implementations. Instead, various modifications can be made to
these implementations as would be understood by one of ordinary
skill in the art. Any such modifications are intended to be
included within the spirit and scope of the present disclosure.
* * * * *