WO2014169326A1

WO2014169326A1 - Configurable merchant funded reward program

Info

Publication number: WO2014169326A1
Application number: PCT/AU2014/000418
Authority: WO
Inventors: Simon Sorockyj; Paul Adrian LEE; Ian Mackenzie; David Shane QUE
Original assignee: Independent Transaction Solutions
Priority date: 2013-04-14
Filing date: 2014-04-14
Publication date: 2014-10-23
Also published as: AU2014253667A1; AU2013205172A1

Abstract

A computer implemented method of effecting a configurable merchant funded reward program, the method including collecting, via a computer network, transaction details of a consumer purchase, processing, by a computer processor, the transaction details to calculate reward associated with the consumer purchase, collecting, via a computer network, transaction details of a subsequent consumer purchase, and processing, by a computer processor, payment of at least part of the reward associated with the consumer purchase, wherein, processing payment of the reward associated with the consumer purchase is effected subsequent to collecting transaction details of a second consumer purchase.

Description

CONFIGURABLE MERCHANT FUNDED REWARD PROGRAM FIELD OF THE INVENTION

[0001] The invention relates generally to a system, method and computer instruction code for effecting a merchant funded reward program.

BACKGROUND OF THE INVENTION

[0002] Reward programs have been known for many years and were initially devised and operated by merchants seeking to attract consumers and establish consumer loyalty and repeat purchases in relation to the goods and/or services offered by the merchant. In an attempt to establish consumer loyalty, merchants will frequently offer a reward to consumers who make repeat purchases or purchase goods and/or services in significant volume. Rewards offered by merchants to consumers for their loyalty generally include discounts, reward points or vouchers (that may be used to effect future purchases with the merchant) or cash rebates.

[0003] Further, merchants operating their own reward programs, or third parties who establish arrangements with a number of merchants and offer rewards on their collective behalf to consumers, generally issue a nonelectronic membership card or electronic card with limited functionality (sometimes referred to as Flash Cards or Swipe Cards). These cards are limited in their use and where they embody electronic functionality, they generally require specifically configured terminals at the merchant premises to enable their use. In the instance of a third party acting on behalf of a number of merchants for the purpose of offering rewards, the rewards are generally funded, either partially or completely, by the consumer or merchant who usually pays a fee to become a member of the third party reward program.

[0004] A disadvantage of such merchant or third party reward cards is that the cards are merchant or third party specific, and a large number of different cards are typically required in order to benefit from multiple rewards programs

[0005] Further disadvantages of merchant or third party reward cards described above are that they require specific hardware at the point of sale (in the case of swipe cards) or staff training (in the case of flash cards), and there is a client registration barrier/threshold in that a client must individually register and apply for cards at each merchant or each third party.

[0006] With the introduction of credit, debit and pre-paid reloadable cards, consumers have increasingly sought to purchase goods and/or services from merchants using such cards. Of these cards representing different payment arrangements, credit cards were the first to be introduced on a mass scale and provided consumers with a line of credit.

[0007] When credit cards are used, a fee is levied upon the merchant (referred to as the Merchant Service Fee or MSF) and the financial institution that issues the credit card to the consumer receives a handling fee (referred to as the Interchange Fee or ICF). The ICF is usually a percentage of the MSF.

[0008] Credit cards became very popular after they were initially introduced to the consumer market and rewards were offered by credit card operators to consumers to encourage consumers to make purchases. The collection of fees (i.e. the MSF and/or ICF) have substantially enabled the funding of rewards and, over time, the rewards offered by operators have become a distinguishing aspect and are used in marketing campaigns to attract new consumers.

[0009] Subsequent to the introduction of credit cards, debit and prepaid cards were issued by some credit card financial institutions and network operators to accommodate a specific consumer demand in the market. Recently, debit and pre-paid arrangements have become the preferred type of payment arrangement for many consumers and there is a substantial reduction in the number of consumers using credit cards to effect purchases from merchants.

[0010] The initial motivation for debit and pre-paid cards was the increasing number of consumers seeking to purchase items from the internet or overseas whilst travelling, and in these instances, consumers preferred to use a payment arrangement other than a line of credit to reduce the liability for any fraudulent use of their account. Subsequently, since the economic downturn of recent times, consumers have displayed an increasing tendency to prefer debit and/or pre-paid electronic payments and over half the payment cards currently in the market are debit cards rather than credit cards.

[0011] Further, consumers have become increasingly disillusioned with reward programs offered in respect of purchases with credit cards. In this regard, consumers generally prefer to select a gift cart when converting points that have been accumulated as a result of credit card use. However, many consumers have become aware that the accumulated points do not accrue sufficient rewards to justify the annual fee levied in respect of the credit card.

[0012] Debit and pre-paid cards also have much lower annual fees and as a result, consumers are increasingly electing to use debit and prepaid cards in respect of their purchases.

[0013] The increasing popularity of debit and pre-paid cards presents a problem for network operators who, in most instances, have become reliant upon the fees generated by credit transactions to fund rewards to consumers.

[0014] Accordingly, operators need to consider alternative arrangements for reward programs in view of changing consumer behaviour.

SUMMARY OF THE INVENTION

[0015] According to a first aspect, the present invention provides a computer implemented method of effecting a configurable merchant funded reward program, the method including collecting, via a computer network, transaction details of a consumer purchase, processing, by a computer processor, the transaction details to calculate a reward associated with the consumer purchase, collecting, via a computer network, transaction details of a subsequent consumer purchase, and processing, by a computer processor, payment of at least part of the reward associated with the consumer purchase, wherein, processing payment of the reward associated with the consumer purchase is effected subsequent to collecting transaction details of the subsequent consumer purchase.

[0016] According to an embodiment, the reward associated with the consumer purchase is stored in a virtual wallet until the payment is processed. The wallet may be accessible online and may accumulate rewards for future release as points or cash.

[0017] According to another embodiment, the consumer purchase and the subsequent consumer purchase are associated with a common or related merchant. Alternatively or additionally, the consumer purchase and the subsequent consumer purchase are associated with a common location.

[0018] According to a further embodiment, consumer purchases utilise a consumer's line of credit to settle the transaction. In another embodiment, consumer purchases utilise a consumer's funds to settle the transaction.

[0019] According to a further embodiment, collection of the transaction details of consumer purchases is effected by an interface to an Electronic Payments Network over which transactions relating to electronic payments for purchases are transmitted. [0020] According to a further embodiment, the electronic payments network is an "open loop" network. The network may extend across national borders and may form a global network.

[0021 ] In another embodiment, merchants and consumers associated with a merchant funded reward program are registered and relevant details are stored in a database.

[0022] The reward may be calculated according to predefined rules. The rules may include time and dates for which a reward is offered, one or more locations of the merchant offering a reward and an amount of the reward.

[0023] According to an embodiment, the reward is stored in a secure account until payment of the reward is processed.

[0024] According to another aspect, the present invention provides a system for effecting merchant funded rewards for purchases of goods and/or services from merchants offering rewards where the consumer effects an electronic payment, including an interface module operably connected to an Electronic Payments Network executing computer instruction code causing the monitoring of purchase transactions, a processing module executing computer instruction code causing the identification of relevant monitored purchase transactions, calculating the rewards, if any, relevant to the transactions, and calculating whether the payment of a reward should be processed, a storage module executing computer instruction code causing storage of relevant rewards until payment is processed, and a communication module executing computer instruction code causing the transmission of details of any calculated rewards to be collected in their entirety from the relevant merchant.

[0025] The interface module, processing module, storage module and communication module may be part of one or more computer systems including a processor and memory.

[0026] In another aspect, the present invention provides a computer readable storage media including modules having computer instruction code recorded thereon, the computer instruction code executing the steps of the method of effecting a configurable merchant funded reward program of the first aspect.

[0027] The computer instruction code may result in computer instructions that are implemented integrally to a computer over a network using separate software components. The computer instruction code may also include components of existing software that effects functions in cooperation with dedicated code developed specifically for the present invention.

[0028] The system and method of the present invention enables merchants to encourage certain consumer behaviours in a similar manner to the encouragement of consumer behaviour by the use of flash (swipe) cards or gift cards without the requirement to issue such cards. Achieving the same result whilst avoiding the need to issue cards saves significant costs in relation to the generation and administration of flash (swipe) or gift cards. In comparison, merchants can use an existing issued network credit, debit or pre-paid reloadable card and generate rules for the release of "cash back" to the consumer or the accumulation of points to achieve the same end result as previously achieved with significant cost savings. Further, it is expected that consumer uptake will be quicker and easier due to the time saved as a result of avoiding card manufacture, distribution and point of sale alteration.

BRIEF DESCRIPTION OF THE DRAWINGS

[0029] An embodiment of the invention will now be described which should not be considered as limiting any of the statements in the previous section. The embodiment will be described with reference to the following figures in which:

FIG. 1 illustrates a system for a configurable merchant funded reward program according to an embodiment of the present invention;

FIG. 2 illustrates a method of settling a reward of a configurable merchant funded reward program according to an embodiment of the present invention;

FIG. 3 illustrates an exemplary relationship between merchants and wallets, for a particular consumer, according to an embodiment of the present invention; and

FIGs. 4A and 4B illustrate groupings of merchants according to an embodiment of the present invention. DETAILED DESCRIPTION OF EMBODIMENTS OF THE INVENTION

[0030] FIG. 1 illustrates a system 100 for a configurable merchant funded reward program according to an embodiment of the present invention.

[0031 ] The system 100 enables a reward program that is configurable to suit a wide variety of merchants. The system 100 enables the tailoring of a reward program to suit a particular merchant, or a group of merchants, depending on how the merchant(s) seek to influence consumer behaviour.

[0032 ] Further, the system 100 enables a merchant to effectively control the release of rewards to consumers whereas this level of control is not available to merchants according to current reward arrangements.

[0033] The system 00 includes a plurality of merchants 105 that are registered with the reward program. A consumer seeking to purchase goods and/or services from a merchant 105 initiates a purchase request with the merchant 105 using an electronic payment card, thus causing an electronic payment request to purchase goods and/or services. The merchant processes the purchase request of the consumer by use of a Point of Sale transaction terminal, for example, which is operably connected to a payment server 10. The merchant 105 transmits the consumer's purchase request and all relevant details pertaining thereto, to the payment server 1 10. The payment server 1 10 transmits the consumer's purchase request to the consumer issuing bank transaction server 15. The consumer issuing bank transaction server 1 5 determines whether the consumer has sufficient funds and/or available credit to purchase the goods and/or services from the merchant 105 and in the event that the consumer has sufficient funds and/or available credit, the consumer issuing bank transaction server 15 transmits an approval for the purchase request to the merchant 105 via the payment server 1 10.

[0034] The system 100 further includes a rewards server 120 that monitors transaction requests and/or approvals. This may be achieved through subscription with a rewards gateway 125 that provides transaction information in the form of reports, for example. As will be understood by a skilled reader, any other suitable means for communication transaction details may be used. The reports advantageously includes details of the merchant and the customer, such as a Merchant Identification (MID) and an account number of the consumer, for each transaction.

[0035] The rewards server 120 contains details of all participating merchants and consumers in the merchant funded consumer reward program, for example in a database. The rewards server (120) identifies transactions relevant to the merchant funded reward program by comparing the merchant and customer details of the report with details of participating merchants and consumers.

[0036] Having identified a relevant transaction involving a participating merchant and consumer, the rewards server 120 calculates a relevant reward, if any, offered by the merchant. As further discussed in respect of FIG. 2, the reward may require further activation, or apply only to a specific store. The reward, if any, is then transferred to the customers account, either directly or indirectly, for example.

[0037] FIG. 2 illustrates a method 200 of settling a reward of a configurable merchant funded reward program according to an embodiment of the present invention. The method is advantageously implemented by the reward server 120 of FIG. 1 , but may be implemented in any part or parts of a system.

[0038] At step 205, the reward server 120 receives a consumer registration including details of an existing payment card. The details may include a card number, an associated account number, or any other suitable identification means. The reward server 120 then stores this information in a database.

[0039] At step 210, the reward server 120 receives a purchase confirmation associated with the customer registration. The reward server calculates any applicable rewards, and any restrictions or other criteria associated with the rewards. According to an embodiment of the present invention, rewards are not activated until a subsequent approved purchase is made. According to a further embodiment of the present invention, un- activated rewards are presented to the consumer in a virtual wallet or purse.

[0040] At step 215, the reward server 120 receives a subsequent purchase confirmation associated with the customer registration. The reward server calculates any applicable rewards, and activates any awards which are awaiting validation.

[0041] At step 220, the reward server 120 effects payment of any activated rewards. The reward server 120 may activate payment through electronic funds transfer, through a payment gateway, or any other suitable means.

[0042] According to certain embodiments, the transaction and subsequent transactions are associated with a common merchant, different merchants at a common location, or with different merchants that are grouped according to one or more rules. Such grouping may be achieved using a shared virtual wallet as described in further detail below.

[0043] In this regard, by establishing appropriate rules regarding the activation of a reward, the merchant effectively controls the release of a previously calculated reward. In the instance of the reward consisting of a "cash-back" amount to the consumer, the reward may not be activated until sufficient further and subsequent purchases occur that justify the release of the previously calculated "cash-back" reward. In this way, merchants can be sure that they have received sufficient funds from consumers to be in a position such that they can afford to pay for a "cash-back" reward to the consumer. It is the ability to control the activation/release of a "cash-back" reward that enables a merchant to be certain that they can afford the merchant funded reward scheme.

[0044] The release/activation of a reward could be satisfied by a range of criteria including a number of transactions, purchases during off- peek periods or an accumulated or single purchase amount. The reward may also include a discount that is only valid during certain times (e.g. off- peek periods).

[0045] FIG. 3 illustrates an exemplary relationship between merchants 305a-305n and wallets 310a-310n, for a particular consumer, according to an embodiment of the present invention.

[0046] Merchants 305a-305n are categorized into premium merchants and regular merchants. As will be readily understood by a skilled reader, any number or type of categories may be used without departing from the invention.

[0047] Premium merchants, such as merchant 305a, are associated with a wallet specifically for that merchant, such as wallet 310a. Regular merchants, such as merchant 305b and 305c, are associated with a shared wallet, such as wallet 310b.

[0048] When the reward server 120 receives a purchase confirmation associated with the customer, it calculates any applicable rewards and places the rewards in the appropriate wallet for later activation.

[0049] According to an embodiment of the present invention, the wallet is available online, but as will be understood by the skilled reader, the wallet may be made available in any suitable manner.

[0050] With reference to system 100 of FIG. 1 and method 200 of FIG. 2, the virtual wallets may be used to store rewards that require further activation.

[0051] FIGs. 4A and 4B illustrate groupings of merchants 405a-405d according to an embodiment of the present invention.

[0052] For the purposes of this figure, merchant 405a belongs to a first chain, and is located at a first location. Merchant 405b belongs to the first chain, and is located at a second location. Merchant 405c belongs to a second chain, and is located at the first location and merchant 405d belongs to the second chain, and is located at the second location.

[0053] Merchants 405a-405d are advantageously grouped in order to provide shared wallets, as discussed above in the context of FIG. 3. Merchants 405a-405d may be grouped based upon a common ownership or control, such as a chain or franchise of stores, or based upon a location such as a shopping centre.

[0054] As illustrated in FIG. 4A, merchants 405a and 405b, and merchants 405c and 405d, are grouped based upon being part of common chains. This enables the use of a common wallet that may be used to promote the chains. As illustrated in FIG. 4B, merchants 405a and 405c, and merchants 405b and 405d, are grouped based upon being at a common location. This enables the use of a common wallet for each location, such as a shopping centre, that may be used to promote the location.

Claims

The Claims defining the present invention are as follows:

1 . A computer implemented method of effecting a configurable merchant funded reward program, the method including: collecting, via a computer network, transaction details of a consumer purchase; processing, by a computer processor, the transaction details to calculate reward associated with the consumer purchase; collecting, via a computer network, transaction details of a subsequent consumer purchase; and processing, by a computer processor, payment of at least part of the reward associated with the consumer purchase; wherein, processing payment of the reward associated with the consumer purchase is effected subsequent to collecting transaction details of a second consumer purchase.

2. A computer implemented method according to claim 1 wherein the reward associated with the consumer purchase is stored in a virtual wallet until the payment is processed.

3. A computer implemented method according to claim 2 wherein the wallet is accessible on-line and accumulates rewards for future release as points or cash.

4. A computer implemented method according to any one of the preceding claims wherein the consumer purchase and the subsequent consumer purchases are associated with a common or related merchant.

5. A computer implemented method according to any one of the preceding claims wherein the consumer purchase and the subsequent consumer purchase are associated with a common location.

6. A computer implemented method according to any one of the preceding claims wherein the consumer makes their purchase using a line of credit to settle the transaction.

7. A computer implemented method according to any one of the preceding claims wherein the consumer makes their purchase using their own funds to settle the transaction.

8. A computer implemented method according to any one of the preceding claims wherein the collection of transaction details of consumer purchases is effected by an interface to an Electronic Payments Network over which transactions relating to electronic payments for purchases are transmitted.

9. A computer implemented method according to claim 8 wherein the Electronic Payments Network is an "open a loop network".

10 A computer implemented method according to any one of the preceding claims wherein the reward is calculated according to pre-defined rules.

1 1. A computer implemented method according to claim 10 wherein the pre-defined rules include any one or more of the following: time for which a reward is offered; dates for which a reward is offered; locations of the merchant offering a reward; and the amount of the reward.

12. A computer implemented method according to any one of the preceding claims wherein the reward is stored in a secure account until payment of the reward is processed.

13. A system for effecting merchant funded rewards for purchases of goods and/or services from merchants offering rewards where the consumer effects an electronic payment, including: an interface module operably connected to an Electronic Payments Network executing computer instruction code causing the monitoring of purchase transactions, a processing module executing computer instruction code causing the identification of relevant monitored purchase transactions, calculating the rewards, if any, relevant to the transactions, and calculating whether the payment of a reward should be processed, a storage module executing computer instruction code causing storage of relevant rewards until payment is processed, and a communication module executing computer instruction code causing the transmission of details of any calculated rewards to be collected in their entirety from the relevant merchant.

14. A system according to claim 12 wherein rewards are calculated according to pre-defined rules, the pre-defined rules including any one or more of the following: times for which a reward is offered; dates for which a reward is offered; locations of the merchant offering a reward; and the amount of the reward.

15. A system according to either claim 12 or claim 13 wherein the reward associated with the consumer purchase is stored in a virtual wallet until the payment is processed.

16. A system according to claim 14 wherein the wallet is accessible online and accumulates rewards for future release as points or cash.

17. A system according to any one of claims 12 to 15 wherein the consumer purchase and any subsequent consumer purchase are associated with a common or related merchant.

18. A system according to any one of claims 12 to 16 wherein the consumer purchase and any subsequent consumer purchase are associated with a common location.

19. A computer readable storage media including modules having computer instruction code recorded thereon, the computer instruction code executing the steps of any one or more of the methods defined in claims 1 to 12.