WO2018140261A1 - Closed loop currency exchange - Google Patents

Abstract

An exemplary closed loop value exchange is disclosed herein. Exemplary embodiments may be used to define one or more rule sets to associate two or more unique identifiers associate with a transaction, where the one or more rule sets may be used to dictate, limit, or control the transaction, to permit the exchange of one or more value types between one or more customers, one or more merchants, one or more lending or financial institutions, and combinations thereof to efficiently and effectively create liquidity events for different stored value object, and to determine how the closed loop is defined and created. Exemplary embodiments may use one or more individual rule sets to determine how to combine or select different stored value sources to complete a transaction, to determine how to combine or select different stored value sources to create a closed loop and/or complete a transaction, and may use conflict check or hierarchy conflict resolution in handling exceptions created when rules from one or more of the rule sets conflict or overlap.

Description

Closed Loop Value Exchange

Jeff Sparrow

PRIORITY

[0001] This application claims the benefit of U.S. Provisional Application No. 62/446,416, filed January 14, 2017, which is incorporated by reference in its entirety into this Application.

BACKGROUND

[0002] There are presently a large number of alternatives for paying for an exchange of goods. The most common payment exchanges are in cash or credit. For example, cash may include either physical currency or a debit from a cash account, such as a checking or savings account. Credit exchanges involve a third party that pays on behalf of a customer to a merchant, with the agreement the customer pays the third party back with interest.

[0003] The payment infrastructure is based on these common payment exchanges. For example, most merchants include cash machines that permit the exchange of physical currency. Merchants also have credit machines in order to permit electronic payment from a debit account or credit account that permits a third party payer to pay on behalf of the customer and receive an increased payment based on a previously made arrangement.

Traditional credit accounts impose an interest rate on the paid amount if paid back after a threshold time.

[0004] The traditional exchange limits the participants to these prearranged relationships or between individuals immediate to the exchange of goods and/or services for payment. There are a number of instances when another entity may increase the value proposition of the exchange, but their participation is not readily available.

DRAWINGS

[0005] FIGS. 1A-1C illustrate an exemplary system for permitting various stored value sources to contribute to a closed loop value exchange according to embodiments of the invention. [0006] FIG. 2 illustrates an exemplary individual rules engine for controlling transactions based on one or more combinations of unique identifiers available at the point of sale.

DESCRIPTION

[0007] The following detailed description illustrates by way of example, not by way of limitation, the principles of the invention. This description will clearly enable one skilled in the art to make and use the invention, and describes several embodiments, adaptations, variations, alternatives and uses of the invention, including what is presently believed to be the best mode of carrying out the invention. It should be understood that the drawings are diagrammatic and schematic representations of exemplary embodiments of the invention, and are not limiting of the present invention nor are they necessarily drawn to scale.

[0008] An exemplary closed loop value exchange is disclosed herein. Exemplary embodiments may be used to define one or more rule sets to associate two or more unique identifiers associate with a transaction, where the one or more rule sets may be used to dictate, limit, or control the transaction.

[0009] Exemplary embodiments may be used to permit the exchange of one or more value types between one or more customers, one or more merchants, one or more lending or financial institutions, and combinations thereof to efficiently and effectively create liquidity events for different stored value objects.

[0010] Exemplary embodiments may use one or more hierarchy rule sets to determine how the closed loop is defined and created.

[0011] Exemplary embodiments may use one or more individual rule sets to determine how to combine or select different stored value sources to complete a transaction.

[0012] Exemplary embodiments may use one or more system rule sets to determine how to combine or select different stored value sources to create a closed loop and/or complete a transaction.

[0013] Exemplary embodiments may use conflict check or hierarchy conflict resolution in handling exceptions created when rules from one or more of the rule sets conflict or overlap. [0014] FIGS. 1A-1B illustrate an exemplary system for permitting various stored value sources to contribute to a closed loop value exchange according to embodiments of the invention. Conventionally, when a Customer A purchases a product from Merchant A, Customer A makes payment to merchant A through conventional fund transfers, such as cash, debit card, ACH payment, credit payment, etc. Therefore, the transaction typically involves the customer and merchant, and possible banks, credit lenders, etc. However, there may be instances in which another entity unrelated to the instant transaction may obtain benefit or may provide a benefit to other members of the transaction by being involved. For example, if Customer B has a payment source to use with Merchant A, but not the opportunity to use the payment, such as if Customer B has a gift card to a merchant not regularly frequented, it would be beneficial to Customer B to permit Customer A to use that payment source with Merchant A and receive payment back from Customer A. As another example, customer B may have a greater return on purchasing, such as having a credit account that has lower interest or higher rewards potential than customer A. Therefore, customer A may permit customer B to participate in the transaction in order to obtain the benefit of the greater purchasing return from customer B, as illustrated in FIG. 1A. In any event, additional benefit may be obtained by creating a closed loop payment system to efficiently create liquidity events or participation of others in a transaction not conventionally part of a single exchange. Payment sources may also be any payment type.

[0015] FIG. IB illustrates an exemplary application of the Closed Loop Value Exchange as described herein. Exemplary embodiments of the closed loop value system 100 may be able to facilitate transactions across multiple customers and multiple merchants to achieve desired liquidity events, marketing opportunities, customer engagement, and other desired effects and financial opportunities as described more fully herein or as would be understood by a person of skill in the art.

[0016] An exemplary exchange is provided as a non-limiting example of the financial opportunities available using exemplary embodiments described herein. As shown, Customer A 121 has two accounts including a gift card 117 having a given value redeemable at a specific merchant, and a points account that may be used to generate gift cards or other dollar value having an exchange rate of points to usable currency. Customer B 122 similarly has a gift card 117 having a second given value redeemable at another specific merchant, a credit card 112 having an available balance, and a cash account 118 also having an available balance. As specifically shown, Customer A has 100,000 airline points that are redeemable for cash value of $120, such as by obtaining a gift card, redeemable as cash, or purchasing available items having the specific value. Customer A also has a gift card having a usable balance of $100 to Merchant A. Customer B has a gift card to Merchant B with a usable balance of $500, a credit card account CC I with an available line of credit for $110, and a checking account having available cash of $25.

[0017] In the specific case illustrated in FIG. 1, Customer B may attempt to purchase an item at Merchant A having a $30 price. When customer A goes to pay the merchant, exemplary embodiments of the system may employ a rules based system of how best to optimize payment across a plurality of stored value sources originating from one or more customers. For example, the system may first look for an available payment option specific to Merchant A. Under this scenario, the system I 00 may identify the stored value source of Customer A's gift card to merchant A of $100. The system may then use $30 of the $100 value of the gift card to pay the purchase price of the transaction between customer Band merchant A.

Customer B may also pay from a second rules based system the cash value equivalent of the $30 back to customer A. For example, Customer B may employ a second rule set requiring payment from cash sources before credit sources. Therefore, customer A will pay the $25 cash from its checking account, and $5 from its credit card CCI account to create the $30 cash value due to customer A. The end transaction balances would therefore be $30 paid to Merchant A from the gift card balance of Customer A. Customer A would thereafter have a remaining gift card balance of $70, and would have a $30 cash balance in his checking account. Therefore, the stored value of Customer A's account has not changed. Customer B would thereafter have $0 in his checking account and an available line of credit on his credit card of $ 105 , with an outstanding balance due on the credit card of $5.

[0018] Conventionally, if customer B wishes to shop at Merchant A, the customer would identify the desired goods and pay for those goods directly from a customer B account to Merchant A. The payment may be from a gift card, cash account (such as a debit card), or credit account. However, if customer A holds a gift card to merchant A, customer A may not be able to redeem the value because the customer A may not be a customer of merchant A. Exemplary embodiments described herein permit liquidity events of these otherwise unavailable resources to optimize value exchanges and provide additional value across multiple customers and/or multiple merchants. [0019] Exemplary embodiments may be used to create unique financial transactions not available under conventional value exchanges.

[0020] For example, exemplary embodiments described herein permit participation of other entities within a transaction not typically present to create a greater return for one or more entities participation in the exchange. For example, if one customer may obtain greater benefit by participating in a rewards program, by having, for example, a lower interest rate or overhead in the transaction, or a lower burden or higher benefit in a transaction, that person may be permitted to participate and obtain the benefit across one or more of the entities in the exchange and/or the host of the exchange.

[0021] Any combination of participation may be contemplated. Looking at FIG. IA, other entities, customers, and merchants may participate in the closed loop. For example, a lending/credit institution may be involved to permit Customer A to purchase an item from Merchant A. However, customer B may be able to put up collateral for Customer A, such as providing access to his points or gift card accounts.

[0022] As another example of a new transaction arrangement, a new investment opportunity may be made in which a merchant requiring immediate capital may receive payment from another system user in exchange for a higher amount of gift card value from that merchant. The user acts as an investor to give capital to the entity. The investor may then post the gift cards for a discounted amount between the capital amount paid in order to define a desired rate of return for the investment. As a specific example, an investor may provide a merchant $100 in exchange for $120 dollars of gift card value. The investor may then make the gift card value available to other users at a 10% discount. Once the gift card value is used, the investor would have made 8%. The merchant receives immediate cash and also provides an incentive or reward to customers similar to a coupon discount, and the investor gets a fairly safe investment with a given rate of return.

[0023] As shown in FIGS. 1B-1C, exemplary embodiments comprise a system for creating a closed loop value exchange. As shown in FIG. 1C, the system may comprise a user input/output interface 141, 142 configured to receive stored value source information from a user, a processing device 143 to send and receive information at a point of sale, and a system platform 144 to manage, create, and facilitate the closed loop exchange. [0024] As shown, the user input may be a computer 141, laptop 142, smart phone, mobile electronic device, or other device configured to communicate over a network. The system may therefore include a database for storing user data. For illustration, ledger 1 10 is used to represent a database or stored system of specific stored value sources, a user to each of the stored value sources, and a usable value associated with the stored value source. The usable value may be a value associated with each of the stored value sources and the user in a common currency or unit. For example, a cash equivalent or redeemable value may be used in U.S. dollars. The system may be configured to update the ledger in real time as stored value sources are used or exchanges and transactions occur.

[0025] In an exemplary embodiment, a user interface is provided to be displayed on a remote device 141, 142 for input by a user 121, 122. The user interface may be configured to present information to a user through an output device, such as a display, and receive information from a user through an input device, such as a keyboard, touch screen, mouse, button, data port, etc. The user interface may be configured to receive information about the user, about one or more stored value sources, such as bank accounts, checking accounts, savings accounts, credit accounts, rewards programs, point accounts, open value exchange information, gift cards, pre-paid debit cards, or other source having a definable value. The system is configured to receive stored value source information and associate the stored value source information with a user.

[0026] As shown, a processing device 143 to send and receive information at a point of sale is provided. The processing device may be an electronic device to receive payment information. The processing device may include a communication port, magnetic stripe, Wi- Fi, near field communication (NFC), Blue tooth, keypad, infrared sensor, or other input or reader device for obtaining an identifier associated with a stored value source and/or customer. The processing device may be configured to communicate the received identifier to the system platform. The processing device may be configured to communicate additional information automatically or in response to an inquiry from the system platform. For example, the processing device may also send a merchant identifier with the stored value source identifier automatically upon detection of the payment interface. The processing device may also be configured to send additional information, such as product purchase information, SKU information, sales amount, location data, or any other information available to the processing device. [0027] As shown, a system platform 144 includes a processor and a storage medium for storing non-transitory machine readable instruction that when executed perform the functions described herein. The system platform comprises one or more storage system for storing, adding, deleting, manipulating, and associating customer information, stored value source information, merchant information, and rule sets for creating and executing the closed loop value exchanges, and combinations thereof. A ledger 1 10 is illustrated to represent consolidate available stored value sources. These value sources may include available balances from credit cards 1 12, cash accounts 1 18, such as savings or checking accounts, rewards programs 1 15, such as points accounts 1 1 1, gift card balances 1 17, open value exchanges 1 14, such as Bit Coin, or other stored value sources 1 16. The value sources may come from or be associated with one or more customers, such as customer A 121 and customer B 122. These value sources may be used to pay a merchant, such as Merchant A 131, for a transaction from any customer apart of the closed loop value system 100.

[0028] The system may include a system rule set for creating a closed loop value exchange. The rule set may define a hierarchy of exchanges between one or more users and/or one or more merchants to achieve a defined result. The system may then execute the rule set to create a closed loop value exchange to achieve the defined result. For example, a hierarchical rule set may define a priority of transactions. The highest priority may be to redeem reward points, with a second, lesser, priority for redeeming gift card values. When the system encounters a transaction, the system then searches the stored value sources in the ledger to identify the possible stored values to use in a closed loop transaction according to the hierarchy. For example, the system may first identify one or more stored value sources defining a point system having a redeemable value for the merchant originating the transaction. If the system does not identify any point system, then the system may search for gift card values available for that merchant. The system may include optimization features to identify a priority of more than one stored value sources meeting the criteria. For example, if a plurality of stored value source point exchanges is identified, the point exchange with the highest conversion rate may be used, or a highest discount rate (as described more fully below) may be used. The system may therefore be configured to create a closed loop value exchange to improve or maximize a desired result.

[0029] The system may also include individual rule sets such that the users may instruct the system in determining and executing a closed loop value exchange. For example, the user may identify priorities for making payment, exchange or discount rates to encourage use of certain value sources, limits on payment amounts, or any other desired rules for

implementing, choosing, or making exchanges. In an exemplary embodiment, a user may encourage use of a value source by designating a discount exchange rate. For example, if a user wants to encourage a liquidation event for their points, the user may indicate a I 0% discount, such that the customer agrees to take 90 cents for each dollar value of points used.

[0030] For the of FIG. 1A-1B, above, with respect to the transaction of Customer B with Merchant A, and inclusion of Customer A, Customer A may also employ a rules based determination of how to redeem or convert his accounts to cash value. For example, to encourage the redemption of his gift card, Customer A may take a 10% discount on the cash value of the redeemable gift card amounts. In this case, instead of Customer B paying $30 to Customer A for the use of $30 of Customer A's gift card, Customer A may only receive $27, taking a 10% discount of $3 to liquidate the gift card value into cash. Therefore, Customer B is encouraged to use Customer A's gift card, providing Customer A a liquidity event to receive a cash value of his gift card amount. The system may be configured to permit the discount value (i.e. the $3 discount customer A was willing to take) to be applied across any combination of customers, merchants, or system operators. For example, the system may be paid the $3 difference from the $30 charged to Customer and $27 paid to Customer A.

Alternatively, customer A, customer B, and/or merchant A may also be able to receive a portion of the discount value through a fourth rules based system for allocating discount amounts. Any combination of features, distributions, or arrangements and/or rules may be combined as desired.

[0031] Accordingly, exemplary embodiments include a system for receiving a plurality of stored value accounts and a plurality of individual rule sets, where each plurality of rule set is associated with an entity (such as a customer or merchant) and the plurality of stored value accounts, and a system rule set for determining a hierarchy of allocations. The plurality of individual rules sets may be globally set and/or dynamically set or adjusted by the system, system administer, or one or more entity associated with the rule set to determine a hierarchy of preferred payment allocations from the one or more stored value accounts of that entity. The system rule set may provide a default rule set to use in place of the individual rule sets and/or may include a rule set on determining a hierarchy or optimization of determining a specific closed loop to make a transaction between one or more merchants and one or more customers.

[0032] FIG. 2 illustrates an exemplary closed loop value system according to embodiments described herein. FIG. 2 permits the creation of various rule sets to control and manage payments from one or more sources linked to one or more entities. The rules sets permit various payments to be allocated, limited, and/or controlled in certain ways.

[0033] Exemplary embodiments permit various entities 221-223 to be associated with various stored value sources 211-213 by various rules sets 231-234 to control and manage payments within a closed system environment. The available balance 241-243 may comprise different combinations of stored value sources. For example, the available balance 241-243 may comprise one or more stored value sources 111-117 as described with respect to FIGS. 1B- 1C.

[0034] For example, a first user 221 may be a cardholder of a credit card 221. The system may include a database for correlating cardholder 221 with the credit account 211 and define a rule set 232 as a first account product for the combination of card and cardholder. The account product, user, value source, and any combination thereof may be used to define a cash value 241-243. For example, if the value source 211 is a credit card with an available balance, then the cash value would be the available credit line. If the value source 211 is a gift card, cash account, open currency, etc. then the cash value may be equivalent to the value of the associated account in a given currency. Therefore, a simple currency conversion may be used to define different cash values in a common metric or currency (e.g. bit coin to US dollars). Other stored value sources, such as points, reward systems, etc. may have a discounted rate or conversion factor between the currency, point, or reward denomination, and a cash equivalent or other common denomination equivalent. For example, if a point system permits the redemption of so many points to a cash amount or gift card amount, then the cash equivalent may be the redemption value through a currency medium as opposed to the point or other denomination provided in the stored value source. Each account 231-234 may therefore be associated with a value equivalent 241-243 defined at a common denomination, such as a cash value or redemption value.

[0035] Each account provides a rule set to allocate or determine how the utilization occurs when the account ID and merchant ID are identified at a point of sale. Therefore, the rule sets define a unique hierarchy of allocations based on identification information provided from the hardware device at the point of sale.

[0036] FIG. 3 illustrates an exemplary customer frequenting a merchant and using a payment system according to embodiments described herein. When customer A 321 visits Merchant A 331 and selects a product or service, customer A 321 can pay using any card type or identification to an account product. When the customer swipes a card, a unique number associated with the merchant (i.e. merchant ID) is communicated with a unique number associated with the payment method (i.e. XID). The XID is associated with a specific account product. The account product then defines the rule set for making payment to that particular merchant. For example, the XID may identify cardholder 221 as the individual owner of the account and the card may be the credit card 211 associated with the account. The rule set may define the available balance 242 that can be used in that transaction.

[0037] Exemplary rule sets may be used to permit or limit any transaction or payment made. For example, a cardholder 221 may define an account product 232 associated with a credit card that permits any use of the available balance 242 at any location. However, the cardholder may have a spouse 222. The spouse 222 may have access to the same available balance of the cardholder and may hold their own credit account tied to the same account as the cardholder. However, the account product associated with the spouse may limit the use of the available balance. The account product may comprise any defined rule based on a combination of the user identity, the account, the merchant, or other transmitted or available information obtained from the transaction. For example, the account product 233 of the spouse 222 may permit access to the available balance 242, but may limit the payment amounts in any single transaction. The cardholder may also have a child 223 with its own defined account product 234. The child account product may limit the available balance 243 to some allocated amount. The child account product may also comprise rules that limit the permissible use of funds. For example, the available balance may only be used at certain merchants. Therefore, when a merchant id is obtained that does not match an approved merchant, the account product may limit the available balance for that transaction. As another example, the use of the available balance may be restricted to certain products. Therefore, when an approved merchant is detected, the system may be configured to query for additional information, such as SKU numbers of the products purchased to limit or permit the transaction of certain items. [0038] Although embodiments of this invention have been fully described with reference to the accompanying drawings, it is to be noted that various changes and modifications will become apparent to those skilled in the art. Such changes and modifications are to be understood as being included within the scope of embodiments of this invention as defined by the appended claims.

Claims

CLAIMS What is claimed is:

1. A closed loop value exchange comprising at least one rule, wherein the at least one rule controls a transaction.