WO2006022593A1

WO2006022593A1 - A trading platform

Info

Publication number: WO2006022593A1
Application number: PCT/SG2004/000261
Authority: WO
Inventors: Kuan Loong Jeremy Tan; Andrew Teh; Kar Wee Pee; Kam Hong Shum
Original assignee: Korvac Consumer Services (S) Pte Ltd
Priority date: 2004-08-27
Filing date: 2004-08-27
Publication date: 2006-03-02

Abstract

A trading platform (10) for trading loyalty points between a plurality of users, the users including multiple redeeming (20) and issuing merchants (21), consumers (22) and an exchange operator (23); the points forming a common points pool and having a monetary value, the platform (10) comprising: a trading network (30) to facilitate trading of the points between the users (20, 21, 22, 23); where, the trading network (30) enables points to be purchased for a monetary value by the issuing merchants (21) and the consumers (22), the issuing merchants (21) issuing the points to their consumers (22) for bying goods or services, and the consumers (22) redeeming the points in exchange for goods or services offered by a redeeming merchant (20); and where, the points of redeeming and issuing merchants (20, 21) are settled based on a predetermined rate set by the exchange operator (23).

Description

Title

A Trading Platform

Technical Field

The invention concerns a trading platform for trading loyalty points between a plurality of users, the users including multiple redeeming and issuing merchants, consumers and an exchange operator; the points forming a common points pool and having a monetary value.

Background of the Invention

In many loyalty programmes, a pool of loyalty points is created and members are issued points (creation of points) and can redeem points (realizing the value of points). These two activities respectively increase and shrink the loyalty points pool for the loyalty programme operator.

Point pools have no realized value until they are redeemed. In most programmes, the points also expire. Points are used as additional value by the merchant to convince a customer to purchase goods or services offered by merchant. For example, a customer is undecided on purchasing a $100 bag, but is moved because of being offered 100 loyalty points worth $10. For the merchant operating the loyalty programme, the cost of the bag has increased by $10. But in real monetary terms, the merchant has not paid up the $10. If the customer redeems $10 worth of goods using the 100 loyalty points, the value of the points are then realized and the merchant pays the $10 at that time.

A high number of point issuance and redemption transactions create a point pool. The pool is created because many customers do not accumulate enough points in a single purchase to redeem for goods and services. Notwithstanding that the pool is empty from the start, a sizeable pool will grow before points start being redeemed. Also, some points are never redeemed because the customer is not interested, moves from the area, or dies.

Summary of the Invention In a first preferred aspect, there is provided a trading platform for trading loyalty points between a plurality of users, the users including multiple redeeming and issuing merchants, consumers and an exchange operator; the points forming a common points pool and having a monetary value, the platform comprising: a trading network to facilitate trading of the points between the users; where, the trading network enables points to be purchased for a monetary value by the issuing merchants and the consumers, the issuing merchants issuing the points to their consumers for buying goods or services, and the consumers redeeming the points in exchange for goods or services offered by a redeeming merchant; and where, the points of redeeming and issuing merchants are settled based on a predetermined rate set by the exchange operator.

The points of redeeming and issuing merchants may be automatically settled via a settlement network. Alternatively, the points may be manually settled.

The points may include loyalty vouchers, coupons or gift certificates.

The points may be traded by buying or selling points directly from one user to another. The points may be bartered between issuing merchants and redeeming merchants. The points may be bought with money or sold for money based on a price listed by the user.

The points may be traded by auctioning the points.

Each consumer may select a group of redeeming merchants from all available redeeming merchants. A redeeming merchant may not be permitted to be selected if a competing redeeming merchant has previously been selected by the consumer. The consumers may only be permitted to redeem their points at redeeming merchants in their selected group.

The value of the points is dynamically adjustable. The value of the points is adjusted by: the exchange operator issuing additional points and selling the additional points in the trading network; the issuing merchants buying the additional points in the trading network; and the exchange operator issuing additional points to the consumers, and paying for the points redeemed at the redeeming merchants. A web site may be provided to enable customers to redeem points from redeeming merchants via the Internet. The web site may enable merchants to monitor and manage their accounts.

In a second aspect, there is provided a trading platform for trading loyalty points between a plurality of users, the users including multiple redeeming and issuing merchants, consumers and an exchange operator; the points forming a common points pool and having a monetary value, the platform comprising: a trading network to facilitate trading of the points between the users; where, the points issued by issuing merchants to the consumers are disassociated from the issuing merchants to normalise the points; and where, the points of redeeming and issuing merchants are settled based on a predetermined rate set by the exchange operator.

The points may be disassociated by discarding identification information to identify the issuing merchant when the points are credited to a points account of the user. This provides a physical disassociation.

The points may be disassociated by removing any reference to the issuing merchant when the points are credited to a points account of the user. This provides a logical disassociation.

In a third aspect, there is provided a method for trading loyalty points between a plurality of users, the users including multiple redeeming and issuing merchants, consumers and an exchange operator; the points forming a common points pool and having a monetary value, the method comprising: trading of the points between the users in a trading network; and settling the points of redeeming and issuing merchants based on a predetermined rate set by the exchange operator; where, the trading network enables points to be purchased for a monetary value by the issuing merchants and the consumers, the issuing merchants issuing the points to their consumers for buying goods or services, and the consumers redeeming the points in exchange for goods or services offered by a redeeming merchant.

In a fourth aspect, there is provided a method for trading loyalty points between a plurality of users, the users including multiple redeeming and issuing merchants, consumers and an exchange operator; the points forming a common points pool and having a monetary value, the method comprising: trading of the points between the users in a trading network; and settling the points of redeeming and issuing merchants based on a predetermined rate set by the exchange operator; where, the points issued by the issuing merchants to the consumers are disassociated from the issuing merchants to normalise the points.

In a fifth aspect, there is provided a method for settling loyalty points between a plurality of users, the users including multiple redeeming and issuing merchants, consumers and an exchange operator; the points forming a common points pool and having a monetary value, the method comprising: computing the total points issued and redeemed within a predetermined settlement period; where, if the total points issued is greater than the total points redeemed, points are purchased from redeeming merchants or consumers via a trading network, and from the exchange operator; and where, if the total points issued is less than the total points redeemed, points are sold to issuing merchants or consumers via the trading network, and settlement with the exchange operator is made via a settlement network.

Each reward point may have a value equivalent to a unit of currency.

Brief Description of the Drawings An example of the invention will now be described with reference to the accompanying drawings, in which:

Figure 1 is an activity diagram of interaction between the users of the points trading network and points settlement network; Figure 2 is a process flow diagram of settlement for each merchant;

Figure 3 is a model of the points trading network when buying points with money; Figure 4 is a model of the points trading network when auctioning points; Figure 5 is an activity diagram of dynamically adjusting the valuation of loyalty points; and Figure 6 is a process flow diagram^' of interaction between the users in the points trading network.

Detailed Description of the Drawings

Referring to Figure 1, there is provided a trading platform 10 for trading loyalty points between users. The points form a common points pool and have a monetary value. Users include redeeming merchants 20 and issuing merchants 21, consumers 22 and an exchange operator 23. The platform 10 comprises a trading network 30 and a settlement network 31. The trading network 30 facilitates trading of the points between the users. The settlement network 31 settles the points of redeeming 20 and issuing merchants 21 based on a predetermined rate set by the exchange operator 23. Alternatively, the points can be manually settled using a manual data entry process. The trading network 30 enables points to be purchased for a monetary value by the issuing merchants 21 and the consumers 22. The issuing merchants 21 issue the points to their consumers 22 for buying goods or services. The consumers 22 redeem the points in exchange for goods or services offered by a redeeming merchant 20.

The platform 10 is a two-tier loyalty point settlement infrastructure comprising the loyalty point trading network 30 and the loyalty point settlement network 31. The point trading network 30 facilitates buying and selling of loyalty points among issuing merchants 21, redeeming merchants 20, consumers 22 and the exchange operator 23. Consumers 22 are able to buy or sell loyalty points through the point trading network 30. The point settlement network 30 provides clearance of loyalty points based on a rate and mechanism set by the exchange operator 23. Referring to Figure 2, a flow chart illustrating the settlement loyalty points between a plurality of users is shown. Firstly, the total points issued and redeemed within a predetermined settlement period is computed 40. If the total points issued is greater than the total points redeemed, points are purchased 41 from redeeming merchants 20 or consumers 22 via the trading network 30. If more points need to be purchased, they can be purchased 42 from the exchange operator 23. If the total points issued is less than the total points redeemed, points are sold 43 to issuing merchants 21 or consumers 22 via the trading network 30. If not all points are sold, they can be settled with the exchange operator 23 via the settlement network 31.

In other words, if the total number of point issued by a merchant 20, 21 is greater than the total number of point redeemed, the merchant 20, 21 will play a role of issuing merchant 21, otherwise it will be a redeeming merchant 20. One way to settle the outstanding balances of loyalty points is for the issuing merchants 21, redeeming merchants 20 and consumers 22 to trade their loyalty points in the trading network 30. Issuing 21 and redeeming merchants 20 could also choose to settle fully or partially, their loyalty point balances via the settlement network 31.

Figure 3 depicts a model of one-on-one trading of points. Redeeming merchants

20 are able to sell the amount of loyalty points (Kr,n) that have been redeemed at their stores. They may set a selling price (Pr,n) for their points. Issuing merchants

21 will need to buy at least the amount of loyalty point (Ki, m) that have been issued by them. Consumers 22 are able to buy loyalty points from redeeming merchants 20. Issuing merchants 21 may choose to buy loyalty points from redeeming merchants 20, consumers 22, and the exchange operator 23. There are three variations of one-on-one trading model: Firstly, barter trade between issuing merchants 21 and redeeming merchants 20; Secondly, using cash to buy or sell loyalty points based on the list prices published by the redeeming merchants 20, consumers 22 and the exchange operators 23; or Thirdly, a mix of the first and second variations.

Figure 4 depicts another model for the trading network 30. The exchange operator 23 holds an auction for selling loyalty points of each redeeming merchant 20, consumer 22 and itself 23. Issuing merchants 21 may offer higher and higher bids for the loyalty points on auction. Points are sold to the merchant 21 who offers the highest bid. Issuing merchants 21 need to buy loyalty points from the exchange operator 23 if they are unable to buy enough points in the auctions. Consumers 22 are also able to bid in an auction that is being held by the exchange operator 23.

Figure 5 depicts one example of dynamically adjusting the valuation of loyalty points. The exchange operator 23 issues 70 extra loyalty points and sell the points through the trading network 30. Issuing merchants 21 buy 71 the loyalty points from the trading network 30. In this way, the exchange operator 23 will have the cash value required to provide valuation of the extra loyalty points to be issued to customers 22. Extra points are being issued by the exchange operator 23 to customers 22 (for example, as a form of point interest"). The exchange operator 23 could then pay 72 for the loyalty points redeemed at the redeeming merchants. Redeeming merchants 20 receive 73 payment for the loyalty points that have been redeemed at their merchant stores. The exchange operator 23 is then the custodian of the extra loyalty points that are used to increase the value of loyalty points.

Referring to Figure 6, from a system architecture perspective, the platform 10 comprises a Consumer Credit Exchange (CCE) 50. The CCE 50 has a centralised CCE server 51 to manage multiple merchants 20, 21 and exchange operators 23. In one embodiment, the CCE server 51 communicates with CCE terminals (not shown) located at the premises of merchants 20, 21 via a communications module 52. At the point of sale, a CCE terminal transmits customer identification information relating to a customer 22 making the redemption, and transmits merchant identification information relating to the merchant 20, 21 offering the award. The CCE server 30 performs the transactional work using a transaction module 53. For example, in a redemption, debiting reward points from customer accounts, and crediting reward points to merchant accounts. The customer and merchant accounts are stored in an accounts database (not shown). Also, reward points information is stored in a points database (not shown).

The platform 10 facilitates multiple exchange operators 22 having multiple subscribing merchants 20, 21. There is one single point pool. Rewards points are created and destroyed in exchange for real money. This means that the reward points have a value corresponding to real money. The platform 10 manages the point pool and shares the points between various operators 22, merchants 20, 21 and customers 22. This point pool is the Points Market. This Market reflects the collective nature of multiple operators 22 and merchants 20, 21 contributing to the pool of points issued. There is an explicit value represented by the pool of the points. This value is represented by the common unit of exchange, known as the KOLD Dollar (KOLD$). The KOLD$ is equivalent to the currency of the country of issuance.

KOLDS are exchangeable for goods and services by a redemption process. KOLD$ are also transferable from one user to another. The value of KOLD$ in circulation is always substantiated by an equivalent amount of real currency being put in. Various merchants 20, 21 have various rates of exchange from their points to KOLD$. When points are exchanged for goods and services in redemption, they are always converted to KOLD$ prior to redemption.

The originator of points is always CCE 30. In other words, only CCE 30 is able to release points into the points market. Before points can be released into the points market, CCE 30 collects the equivalent amount in real world currency from the points issuer. CCE 30 is the master points issuer.

The Purchase of Points, Issuance of Points, Redemption of Points and Return of Points is described.

Purchase of Points

An issuing merchant 20, before being able to issue points, purchases points from CCE 30. In this process, the issuing merchant 20 injects funds into the pool points, by buying points from the point market. In exchange for the currency injection, CCE 30 issues points to the issuing merchant 20. This provides them with the points at their disposal for further issuance to its customers 22. For example, if $100 in funds injected into CCE 30, the Points Market grows by 100 points.

Issuance of Points When goods and services are purchased by a customer 22 from Merchant A 20, Merchant A 20 rewards the customer 22 for the purchase with points that it has bought from CCE 30. Merchant A 20 is able to award points as long as he maintains a positive balance in his Points Market account. For example, Merchant A 20 is able to issue a maximum of 100 points to the customer 22 if that is the current balance in the Points Market account of Merchant A 20. Redemption of Points

The customer 22 decides to redeem the points for goods and services from Merchant Z 21. Using the 100 points, the customer 22 redeems $100 worth of goods and services from merchant Z 21. Merchant Z 21 now has 100 points, which may be returned to CCE 30 in exchange for cash or monetary funds.

Return of Points

With the 100 points, Merchant Z 21 has the option of either returning the points for cash from the CCE 30, or keeping part of the points to reward it's own customers 22 if it is participating as an issuing merchant in the platform 10. If Merchant Z 21 keeps 80 points, CCE 30 takes back 20 points as the Redemption Discount Rate (RDR) and distributes the funds accordingly. The RDR is a percentage processing fee charged to a merchant during redemption. Merchant Z 21 is able to issue up to 80 points to its customers 22 as a reward for purchasing.

If Merchant Z 21 had decided to return all the 100 points, $80 is reimbursed to Merchant Z 21 in funds after settlement. Returning the 100 points to CCE 30 causes $100 to be taken out of CCE 30 and redistributed to the Redemption Merchant ($80) 21, Operators 23 (% of $20) and CCE 30 (% of $20).

Points in the Points Market are used as a form of stored value as well. Real value is depicted in the representation of points. In this platform 10 where there are exchanges of value represented by the points, points of brokerage between various users is provided.

Since CCE 30 is the main issuer of points, CCE 30 is considered as the single largest point broker. An entity with a large enough pool of points may also act as a point broker. A broker is able to buy and sell points at perceived values. For example, such entities include a large issuing merchant 20, 21, which has either acquired points by redemption or bought them from CCE 30.

Terminal-based Issuance

The physical flow of information from the CCE card (not shown) of a customer 22 to the CCE server 51 and back to the customer 22 is described. The stages include: a card swipe, Sending information to the Issuing Operator, Sending information to CCE 30 and Printing of a receipt. When a CCE card of a customer 22 is swiped, card information is captured from the card by the terminal to identify the customer 22. This information includes the customer's name, a unique ID number or the customer's account number. The card information, along with merchant information is sent to the Issuing Operator. Merchant information is retrieved from the terminal. Merchant information includes the merchant's name, address or account number. The card information, merchant information and operator information is packed and sent to the CCE server 51. The number of points to be issued are calculated and stored on the CCE server 51. The result is then sent back to the issuing merchant's 20 CCE terminal through the Exchange Operator 22. The issuing merchant 20 is provided with a receipt to record the transaction of point issuance.

The issuing of points is mainly performed by CCE terminals at the issuing merchant's physical premises. The CCE terminals operate with Point of Sale (POS) terminals or independently. In cases where the CCE terminals are not linked to the POS terminals, the total amount of transactions which may be issued points is manually keyed into the CCE terminals.

The following types of information is transmitted from the CCE terminal to the CCE server 51 :

• Purchase type flag (from terminal)

• Program flag (from terminal)

• Purchase amount (from terminal)

• Operator ID (from operator) • Merchant ID (from terminal)

• Terminal ID (from terminal)

• CCE card number (from card)

• CCE card expiry date (from card).

At the CCE server 51 end, the issued points are computed and added to the points database.

Terminal-based Redemption

The physical flow of information from the CCE card of a customer 22 to the CCE server 51 and back to the customer 22 is described. The stages include: Card Swipe, Sending information to the Exchange Operator 23, Sending information to CCE 30 and Printing of receipt. When a CCE card of a customer 22 is swiped, card information is captured from the card by the terminal to identify the customer 22. The card information, along with merchant information is sent to the Exchange Operator 23. The card information, merchant information and operator information is packed and sent to the CCE 30. The deduction of CCE points is performed and stored on the CCE server 51. The result is then sent back to the Redemption merchant's 21 CCE terminal through the Exchange Operator 23. The redemption merchant 21 is provided with a receipt to record the transaction of points redemption.

Redemption of points is performed at redemption merchants 21. Most redemption merchants 21 still issue receipts using their POS to record the redemption of goods and services, although no actual cash transaction takes place. The number of points to be redeemed and the product code to be redeemed are entered manually after swiping the CCE card.

The following type of information is transferred from the terminal to the CCE server 51:

• Redemption type flag (from terminal) • Program flag (from terminal)

• Redemption product code (from terminal)

• Redemption amount (from terminal)

• Operator ID (from operator)

• Merchant ID (from terminal) • Terminal ID (from terminal)

• CCE card number (from card)

• CCE card expiry date (from card)

At the CCE server 51 end, the redeemed points are computed and deducted from the points database.

Redemption involves the transfer of funds between the CCE 30, operators 23 and merchants 21. This requires settlement. The process of settlement effectively consolidates total transactions for redemption in a predetermined period and effects the transfer of funds between the issuing merchants 20 and redemption merchants 21. Web-based Interface for Customers

A web-based interface is provided to customers 22 via server 51. Customers 22 are able to access a CCE web site via secure logon to retrieve details of their account. CCE 30 provides the platform and contains all records of the participating operators 22 and merchants 20, 21.

The web-based interface allows customers 22 to trace transaction history for the last five transactions carried out on the card. Other common functionalities include:

• Online registration for CCE loyalty card for merchant 20, 21. • Online lost card reporting.

• Change of particulars, including mailing address.

• Checking of points, redemption eligibility.

• Expiry of points.

• Browsing of participating merchants 20, 21. • Browsing of redemption benefits/goods/services.

• Access to special redemption offers from merchants 20, 21.

Customers 22 are able to carry out redemption via the Internet. In particular, redeeming their points for goods and services that are deliverable online, as well as voucher redemption. CCE 30 facilitates these redemption and informs the redemption merchant 21 accordingly. After being informed, the redemption merchant 21 , is responsible for fulfilling the order. The backend process for redemption of points is similar to that of terminal redemption. The main difference is the order fulfillment.

Web-based Interface for Merchants and Operators

A web-based interface is also provided to merchants 20, 21 and operators 22. Merchants 20, 21 and operators 22 are able to access the CCE web site via secure login logon. Once logged in, they are able to retrieve details of their issued points and their customer database. Powerful search functionality and reporting is provided to enable CRM capability and development of customer-based targeted marketing campaigns. Also, accounting and reconciliation services are provided including:

• Daily Detailed Report of issued/redeemed points. • Periodic (Daily/Monthly/Quarterly/Yearly) Summary of issued/redeemed points.

• Top Most/Least Active Cardholder listing.

• Most redeemed item code. • Issued points' redemption performance.

• Top Most/Least Performing Merchant for point issuance.

• Point issuance administration and configuration.

• Point redemption administration and configuration. • Merchant signup interface for operator.

Most of the data and functions are delivered in real-time to the merchant 20, 21 or operator 23. However, some reporting data and functions may be delayed.

Disbursement of funds

After the cycle of issuance and redemption is complete, the funds need to be disbursed to the various parties involved. The flow of money occurs in the platform 10 in various ways including:

• Issuing Merchant 20 to Exchange Operator 23 to CCE 30 to Exchange Operator 23 to Redemption merchant 21 ;

• Issuing merchant 20 to CCE 30 to (exchange operator 23 and exchange operator 23 and redemption merchant 21);

• Issuing merchant 20 prepays CCE 30. CCE to 30 (exchange operator 23 and redemption merchant 21); and • Issuing merchant 20 prepays Exchange Operator 23. Exchange Operator 23 to CCE 30.

The examples assume that the customer is performing an off-us redemption (the redemption of goods and services with points issued by merchants not serviced by the same credit exchange operator), and is redeeming for goods and services worth $10.00. The RDR is also assumed to be pegged at 20%.

The basic model of monetary transfer where the funds flow sequentially from one user to the next. It is necessary for Merchant A (the issuing merchant) to come up with $10 worth of funds to be transferred to Merchant Z (the acquiring merchant). Based on the RDR of 20%, Merchant Z receives a total of $8.00 (80% of $10.00). In the basic model, the Issuing Merchant, merchant A, pays operator 1 (the Issuing Operator) $10.00 for the redemption of $10.00 worth of goods and services by the customer. Operator 1 (Issuing Operator) then pays CCE $9.40 after deducting his share of 6% from the $10.00 paid to him from the Issuing Merchant. CCE deducts 8% of the original redemption goods' worth, which equates to $0.80. CCE then transfers $8.60 to the Redemption Operator, who then takes out $0.60, 6% equivalent, before passing $8.00 to the redemption merchant.

From this example, there are four steps of monetary transfer from one user to the other. It is a rather straightforward way to transfer the money and presents no extra pressure on any single party for the transfer of funds.

The advantage of this transfer process is that it is straightforward and every user shares an equivalent responsibility of transferring the funds. However, this transfer process has slow propagation of funds. Most organizations usually take some time to receive, process and disburse the funds out to external parties. As such, inefficiencies occur and the redemption merchant may get the funds late. Secondly, there is a higher possibility that one user in the chain may default on payment, thus holding up disbursement of funds for other users. Thirdly, higher banks charges incurred due to multiple fund transfers between users. Fourthly, bank fees are based on full recurring amounts of $10, $9.40, $8.60 and $8.

A propagation model is described. The Issuing Merchant, merchant A, pays CCE $10.00 for the redemption of $10.00 worth of goods and services by the customer. CCE then pays both the operators their respective fees of $0.60 after deducting its share of 8% from the $10.00 paid to him from the Issuing Merchant, which equates to $0.80. CCE also transfers $8.00 to the Redemption Merchant.

From this example, there are only two steps of monetary transfer from the issuing merchant to the CCE, which then propagates the funds to the other users. It is also quite straightforward way but presents extra pressure on the CCE for the transfer of funds.

The advantage of this transfer process is fast transfer of funds. It is not necessary to wait for one party to clear the funds before propagating the funds to the next. Secondly, only two steps are required. Thirdly, there are savings in the transfer of funds. Bank charges only apply to a total of $10.00 and $9.20. Fourthly, the responsibility of funds propagation stays with one company, which means the responsibility is more restricted to one party, rather than depending on multiple parties. However, the heaviest responsibility of fund propagation is with the CCE, which some users might not be comfortable with. A model based on a prepayment concept is described. The issuing merchant prepays a certain amount to the CCE. This amount reflects the value of points that the issuing merchant issues. For example, if the Issuance Rate of merchant A is 1 point / $10 spent, and the gross revenue is estimated at $30,000 a month, there are 3,000 points issued. Assuming that the Point Value Rate $0.10 / point, there is an issued value of $300 every month. The prepayment amount is $300 to CCE on a monthly basis.

When there is a redemption worth $10.00 as depicted, CCE disburses funds of $8.00 to merchant Z, $0.60 each to Operator 1 and Operator 2, while CCE transfers $0.80 from prepayment account to it's own Operating account. The total amount of $10.00 is cut from the prepayment amount at CCE.

The advantage of this transfer process is fast transfer of funds. It is not necessary to wait for one party to clear the funds before propagating the funds to the next. Secondly, only one step is required. Thirdly, there are savings in the transfer of funds. Bank charges only apply to a total of $10.00 and $9.20. Fourthly, the responsibility of funds propagation stays with one company, which means the responsibility is more restricted to one party, rather than depending on multiple parties. Fifthly, there is no multiple funds transfer for individual transactions, just one time payment of prepayment amount to CCE from Issuing Merchant. However, the heaviest responsibility of fund propagation is with the CCE, which some users might not be comfortable with. Also, monthly adjustment of prepayment amount might be necessary to recoup any shortfall or overpayment.

Another model based on prepayment concept and is a variation from the prepayment model is described. It differs in that the prepayment amount is made to the Issuing Operator instead of CCE. When the redemption is made, the funds are cut from the Issuing Operator's prepayment fund and propagated to CCE for further disbursement of funds.

When there is a redemption worth $10.00 as depicted, Operator 1 disburses funds of $9.40 to CCE, after deducting $0.60 for it's share of Redemption Discount Rate. CCE then pays out $0.60 to Operator 2, $8.00 to Merchant Z, the Redemption Merchant and transfers $0.80 to it's own account. The total amount of $10.00 is cut from the prepayment amount at Operator 1. The advantage of this transfer process is fast transfer of funds. It is not necessary to wait for one party to clear the funds before propagating the funds to the next. Secondly, only two steps are required. Thirdly, the responsibility of funds propagation stays with one company, which means the responsibility is more restricted to one party, rather than depending on multiple parties. Fourthly, there is no multiple funds transfer for individual transactions, just one time payment of prepayment amount to Issuing Operator from Issuing Merchant. However, the heaviest responsibility of fund propagation is with the CCE, which some users might not be comfortable with. Also, monthly adjustment of prepayment amount might be necessary to recoup any shortfall or overpayment. Further, there are slightly higher bank charges for multiple transfer of funds.

In one embodiment, the platform 10 provides a points disassociation module 54 to disassociate the points issued by issuing merchants 21 to the consumers 22 such that they are untraceable to the issuing merchant 21. The module 54 performs a delinking process to cause the origin of the points (the identity of the issuing merchants 21) to become anonymous. Therefore, all points are able to be treated equally by the merchants 20, 21 and exchange operator 23. In a typical scenario, an issuing merchant 21 issues points to a consumer 22 who has purchased goods or services from the issuing merchant 21. When the points are credited to the points account of the consumer 22 (by transfer from the issuing merchant 21), the points are disassociated by discarding identification information to identify the issuing merchant 21 from all records in the platform 10. At the time of settlement, the issuing merchant identification information is stored to enable the crediting/debiting of points. But once the points are permanently credited into the consumer's 22 points account (points which have cleared), the link or association between the issuing merchant 21 and the points is removed. The insertion of points into the platform 10 through the issuing merchant's terminal carries the link information (at issuance). But for retrieval of points from the platform 10 through the redeeming merchant's terminal (at redemption) does not carry the link information. From the perspective of the consumer 22, all their points, irrespective of where the points were obtained (from any issuing merchant 21), has a single common, denominated normalised value which is consistent across the entire points account. This results in a common denominated pool of points.

Another option to disassociate the points is to remove any reference to the issuing merchant when 21 the points are credited to a points account of the consumer 22. This means that the link information is stored, but cannot be referenced. However, this is not preferable since the number of links to store in the platform 10 is in the order of N to the power of two, and unnecessarily requires large amounts of storage space. Other ways to disassociate the points from the issuing merchant 21 are also possible.

Another example is described. The CCE 30 sells 100 KOLD$ to Merchant A 21 and 100 KOLD$ to Merchant B 21. While shopping, Consumer A purchases goods at Merchant A 21 and Merchant B 21 and receives 20 KOLD$ and 30 KOLD$, respectively from the merchants. Consumer A has earned 50 KOLD$ as loyalty for shopping with those merchants.

Later, Consumer A redeems the 50 KOLD$ at Merchant C 20. Merchant C 20 now holds 50 KOLD$ after the transaction with Consumer A. Merchant C 20 is able to obtain the dollar equivalent back from CCE 30 by exchanging the KOLD$ back to real money. The 50 KOLD$ held by Merchant C 20 is not traceable to the issuing merchants 21, Merchant A or B.

A further example is described. Merchant C now becomes an issuing merchant 21. Merchant C 21 awards the 50 KOLD$ it received from Consumer A to another consumer, Consumer B, as loyalty for purchasing goods or services from Merchant C. Consumer B redeems their 50 KOLD$ at Merchant D 20. This process is continuously repeated and circulates the KOLD$ throughout the platform 10 between the merchants and consumers.

The KOLD$ is similar to a form of virtual currency. Participating merchants 20, 21 accept and trade KOLD$ as though it was money. It may be possible that settlement of this money never occurs (no exchange with the CCE 30 for the dollar equivalent). Also, the source or transaction history of the KOLD$ is not traceable, similar to real money.

It will be appreciated by persons skilled in the art that numerous variations and/or modifications may be made to the invention as shown in the specific embodiments without departing from the scope or spirit of the invention as broadly described. The present embodiments are, therefore, to be considered in all respects illustrative and not restrictive.

Claims

WE CLAIM:

1. A trading platform for trading loyalty points between a plurality of users, the users including multiple redeeming and issuing merchants, consumers and an exchange operator; the points forming a common points pool and having a monetary value, the platform comprising: a trading network to facilitate trading of the points between the users; where, the trading network enables points to be purchased for a monetary value by the issuing merchants and the consumers, the issuing merchants issuing the points to their consumers for buying goods or services, and the consumers redeeming the points in exchange for goods or services offered by a redeeming merchant; and where, the points of redeeming and issuing merchants are settled based on a predetermined rate set by the exchange operator.

2. The platform according to claim 1, wherein the points of redeeming and issuing merchants are automatically settled via a settlement network.

3. The platform according to claim 1, wherein the points of redeeming and issuing merchants are manually settled.

4. The platform according to claim 1, wherein the points include loyalty vouchers, coupons or gift certificates.

5. The platform according to claim 1 , wherein the points are traded by buying or selling points directly from one user to another.

6. The platform according to claim 5, wherein the points are bartered between issuing merchants and redeeming merchants.

7. The platform according to claim 5, wherein the points are bought with money or sold for money based on a price listed by the user.

8. The platform according to claim 1, wherein the points are traded by auctioning the points.

9. The platform according to claim 1 , wherein each consumer selects a group of redeeming merchants from all available redeeming merchants.

10. The platform according to claim 9, wherein a redeeming merchant is not permitted to be selected if a competing redeeming merchant has previously been selected by the consumer.

11. The platform according to claim 10, wherein the consumers are only permitted to redeem their points at redeeming merchants in their selected group.

12. The platform according to claim 1, wherein the value of the points is dynamically adjustable.

13. The platform according to claim 12, wherein the value of the points is adjusted by: the exchange operator issuing additional points and selling the additional points in the trading network; the issuing merchants buying the additional points in the trading network; and the exchange operator issuing additional points to the consumers, and paying for the points redeemed at the redeeming merchants.

14. The platform according to claim 1, further comprising a web site to enable customers to redeem points from redeeming merchants via the Internet.

15. The platform according to claim 6, wherein the web site enables merchants to monitor and manage their accounts.

16. A trading platform for trading loyalty points between a plurality of users, the users including multiple redeeming and issuing merchants, consumers and an exchange operator; the points forming a common points pool and having a monetary value, the platform comprising: a trading network to facilitate trading of the points between the users; where, the points issued by issuing merchants to the consumers are disassociated from the issuing merchants to normalise the points; and where, the points of redeeming and issuing merchants are settled based on a predetermined rate set by the exchange operator.

17. The platform according to claim 16, wherein the points are disassociated by discarding identification information to identify the issuing merchant when the points are credited to a points account of the user.

18. The platform according to claim 16, wherein the points are disassociated by removing any reference to the issuing merchant when the points are credited to a points account of the user.

19. The platform according to claim 16, wherein the points of redeeming and issuing merchants are automatically settled via a settlement network.

20. The platform according to claim 16, wherein the points of redeeming and issuing merchants are manually settled.

21. The platform according to claim 16, wherein the points include loyalty vouchers, coupons or gift certificates.

22. The platform according to claim 16, wherein the points are traded by buying or selling points directly from one user to another.

23. The platform according to claim 22, wherein the points are bartered between issuing merchants and redeeming merchants.

24. The platform according to claim 22, wherein the points are bought with money or sold for money based on a price listed by the user.

25. The platform according to claim 16, wherein the points are traded by auctioning the points.

26. A method for trading loyalty points between a plurality of users, the users including multiple redeeming and issuing merchants, consumers and an exchange operator; the points forming a common points pool and having a monetary value, the method comprising: trading of the points between the users in a trading network; and settling the points of redeeming and issuing merchants based on a predetermined rate set by the exchange operator; where, the trading network enables points to be purchased for a monetary value by the issuing merchants and the consumers, the issuing merchants issuing the points to their consumers for buying goods or services, and the consumers redeeming the points in exchange for goods or services offered by a redeeming merchant.

27. The platform according to claim 26, wherein the points of redeeming and issuing merchants are automatically settled via a settlement network.

28. The platform according to claim 26, wherein the points of redeeming and issuing merchants are manually settled.

29. A method for trading loyalty points between a plurality of users, the users including multiple redeeming and issuing merchants, consumers and an exchange operator; the points forming a common points pool and having a monetary value, the method comprising: trading of the points between the users in a trading network; and settling the points of redeeming and issuing merchants based on a predetermined rate set by the exchange operator; where, the points issued by the issuing merchants to the consumers are disassociated from the issuing merchants to normalise the points.

30. The platform according to claim 29, wherein the points are disassociated by discarding identification information to identify the issuing merchant when the points are credited to a points account of the user.

31. The platform according to claim 29, wherein the points are disassociated by removing any reference to the issuing merchant when the points are credited to a points account of the user.

32. The platform according to claim 29, wherein the points of redeeming and issuing merchants are automatically settled via a settlement network.

33. The platform according to claim 29, wherein the points of redeeming and issuing merchants are manually settled.

34. A method for settling loyalty points between a plurality of users, the users including multiple redeeming and issuing merchants, consumers and an exchange operator; the points forming a common points pool and having a monetary value, the method comprising: computing the total points issued and redeemed within a predetermined settlement period; where, if the total points issued is greater than the total points redeemed, points are purchased from redeeming merchants or consumers via a trading network, and from the exchange operator; and where, if the total points issued is less than the total points redeemed, points are sold to issuing merchants or consumers via the trading network, and settlement with the exchange operator is made via a settlement network.