1. A method for merchant-independent customer loyalty program to award and/or redeem loyalty points using single identity of customer, said method comprises steps of; i. preparing a packet comprising information about purchase value and/or unique purchase transaction identifiers by merchant into a loyalty machine connected online to a loyalty server; ii. parsing the packet by the server to update the information in a loyalty database based on loyalty rules set forth by the merchant; iii. enrolling and thereby updating a customer automatically if their mobile number is not existing in the database and thereafter alerting the loyalty machine and customer about the updation of points by the server; iv. sending short message by the customer through mobile phone to a predefined number using short code to identify the merchant and thereby requesting the server to redeem the points to purchase good and/or service at a merchant location; and v. sanctioning the request of redemption based on the customer's balance and merchant rules and thereafter alerting the merchant about redemption to provide the goods and/or service to the customer.

2. The method as claimed in claim 1, wherein the unique purchase transaction identifier is a bill number and the customer's mobile number.

3. The method as claimed in claim 1, wherein one or more merchant and/or customer identifiers are used in the transaction sent to the loyalty server.

4. The method as claimed in claim 1, wherein the mobile number is optionally sent to the server through a RFID tag attached to the mobile phone containing the mobile number.

5. The method as claimed in claim 1, wherein the method supports one or more advertisement to be embedded in the alert sent to the client.

6. The method as claimed in claim 5, wherein the advertisement is selectively chosen based on information about the merchant location and time of the transaction to directed marketing to the customer.

7. The method as claimed in claim 1, wherein the loyalty rules are set and updated by the merchant at any time to link award of loyalty points to the customers history, time and day of purchase, mobile number of customer and any other predetermined parameters are sent from the machine to the server for rewards.

8. The method as claimed in claim 1, wherein the information on loyal customer of a merchant is sent to the merchant on a pre-set frequency and/or on demand based on the merchant's requirements.

9. The method as claimed in claim 1, wherein the merchant at any time is able to reconcile the loyalty transactions performed during a period of time.

10. The method as claimed in claim 1, wherein the method enables the customer to redeem points from a merchant different from the one from whom the points are accrued.

11. The method as claimed in claim 1, wherein nominal value of points of one merchant and that of another is set based on a rule in the loyalty server to allow for award and redemption from different merchants.

12. The method as claimed in claims 10 and 11, wherein the different merchants allows for such exchange of loyalty points is defined in the server.

13. The method as claimed in claim 1, wherein communication between the server and the machine is made secured using an encryption technique.

14. The method as claimed in claim 13, wherein security keys for the encryption and decryption is set one time or exchanged at a pre-determined frequency between the machine and the server.

15. The method as claimed in claim 1, wherein the packet optionally contains card number or a token number to differentiate mode of payment like card payment or cash payment.

16. The method as claimed in claim 15, wherein another token number is used in case the payment is done by cheque.

17. The method as claimed in claim 1, wherein the method supports billing transactions entered into billing system to be reconciled with the transaction in the loyalty machine to ensure that no transactions are in error.

18. The method as claimed in claim 1, wherein the method allows the merchant to dynamically request for a change in the loyalty rules through a short-message service or through the internet and for the changed loyalty rules to be updated on the server immediately.

19. The method as claimed in claim I, wherein the method uses the customer bioinformatics identifier like fingerprint and/or retinal scan and/or face scan for identification of the customer

20. A system for merchant-independent customer loyalty program to award and/or redeem loyalty points using single identity of customer, said system comprises; i. a loyalty machine at a merchant location for entering of transaction information; ii. loyalty server to establish communication with the loyalty machine and to capture the transaction packets coming from the machine; iii. a database connected to the server to store information about the transaction; and iv. a mobile phone to receive customer alerts from the server and to carry out transactions.

21. The system as claimed in claim 20, wherein the loyalty machine is selected from a group comprising Electronic Data Capturing machine (EDC), PDA and computer system.

22. The system as claimed in claim 20, wherein the communication network is wireline, wireless, cable, VoIP, and Circuit Switched Network.

23. The system as claimed in claim 20, wherein the loyalty machine is connected online to the loyalty server through wired or wireless connection.

24. The system as claimed in claim 20, wherein the loyalty server provides a merchant administration interface for the merchant to configure loyalty rules and a customer interface for the customer to personalize the access.

25. The system as claimed in claim 20, wherein the alerts is provided to the customer either on the mobile phone or through a printed slip of paper provided by the merchant.

26. The method and system for merchant-independent customer loyalty program to award and/or redeem loyalty points using single identity of customer is substantially as herein above described in the specification with respect to accompanying drawings.

FIELD OF THE INVENTION

The invention defines a merchant-independent customer loyalty system, through which a customer can use a single identity to be rewarded loyalty points for purchases made from a merchant and to redeem points from merchants. It further allows the merchants to get information on customer's loyal to their establishment or to a chain of establishments of which a merchant would like to be associated with, without having to invest in any expensive information technology infrastructure. Moreover, it allows customers to use a single identity to manage their loyalty points with multiple merchants without having to carry multiple loyalty identities. Further, it allows for the single identity to be used by merchants offer a facility for earning points at one establishment and burning them at another, with the set of merchants enrolling for this facility being easily configurable. Further, it uses the merchant settlement process in merchant acquisition to allow for easy earn and burn across merchants as well as payment for loyalty services.

It further specifies a framework for accomplishing the above through a program residing on a merchant's electronic data capture machine. A possible method for enrolling customers, awarding points, retrieval of information by customers and merchants and redemption of points is also described. The method also describes how the merchants can use the merchant settlement process for carrying out award and redemption of loyalty points as well as payment of loyalty services.

BACKGROUND OF THE INVENTION AND PRIOR ART

Loyalty programs are designed by merchants to improve the returns on their marketing investments. Loyal customers are known to buy twice as much, buy higher value goods (thereby providing higher margins) and refer the merchant to other people thereby helping in reducing the marketing expenses, or for the same marketing budget provide a higher return.

Merchants typically provision 0.8% to 1.2% of their sales for loyalty rewards. Almost all loyalty programs are currently card based, these result in several limitations, the main being as follows:

• From merchant point of view:

1. The loyalty program needs to be integrated with the billing systems of the merchant. Merchants have varying kinds of billing systems and this makes integration very complex.

2. Merchants need to have certain minimum level of information technology expertise to be able to manage the system and this makes enabling loyalty programs for stand-alone and smaller merchants difficult.

3. Merchants need to invest in card personalization systems, enrolment systems and information technology hardware to be able to manage the system. This again requires dedicated resources to be committed by the merchant.

4. Merchants have a lag between purchase by a customer and points being awarded, as a result limiting the kind of marketing programs that can be managed.

5. Merchants cannot do instantaneous update of loyalty rules based on marketing program that they may want to run. Further, directed marketing to a customer based on his purchase patterns is not easy to handle as there is a lag between the event and the information getting logged.

6. Merchants providing goods or services cannot easily form a group to provide an inter-merchant reward and redemption.

7. Inter-merchant reward and redemption requires a complicated back-end integration of systems between merchants.

8. Loyalty systems typically need to be bought and managed by merchants, which limits the deployment of these systems to only large retailers.

• From customers point of view:

1. Customers at the time of enrolment need to fill in complex forms and often need to either pay money for enrolment or carry out a purchase of a minimum value to get enrolled. This limits the customer base that merchants can enroll or attract back to their stores.

2. Each loyalty program of a merchant is independent, requiring them to carry multiple loyalty cards.

3. Customers often forget to carry cards as a result are not able to get credit of points against purchases made at those instances. This also results in customers not being able to redeem points at such instances.

4. Customers cannot come to know of their current loyalty points without going to the merchant location physically. Some merchants have enabled online access through a computer, however typically customers in the field do not have access to the Internet or a computer and are unable to avail of this facility.

5. There are multi-brand loyalty programs that allow customers to get rewarded at one merchant location and for them to redeem points at another. However, typically brands limit the movement of customers between competing brands and therefore result in a customer having to register in multiple programs and carrying multiple loyalty cards.
There have been attempts at using the mobile number of a customer as his or her identification and using that for rewarding loyalty points. However, these systems require the merchants to have an online store, thereby limiting the class of merchants that can enable their loyalty programs. Further, they require the customer to have purchased the items using a card-based payment (credit/debit) that again limits the type of transactions being rewarded for loyalty and the customer and merchant base. To emphasize the point further, many Asian countries, such as India, have only 2% of payments in retail by value happening over a credit/debit card base, the balance happen through cash. Moreover, it does not provide a uniform loyalty platform for the customer and merchant leading to the customer getting only partial rewards.

What is needed to accomplish an effective merchant loyalty system is investigated and narrowed down to five basic requirements of ease of enrolment, reward allotment, reward redemption, inter-merchant earn and burn settlement and customer and merchant information access. Two existing methods are analyzed for their applicability to managing merchant loyalty and their limitations are highlighted.

Existing Methods

• Single merchant loyalty program.

• Multi-brand loyalty programs.

We discuss each of them in brief next. We will evaluate these on the basis of enrolment, reward, redemption and information access.

• Single merchant loyalty program.

In this system a customer fills in a physical form for enrolment. The customer is then issued a card that may have been personalized by the merchant. Every time the customer purchases goods from the merchant or avails of a service, the customer has to present the card and the merchant credits points as per set rules to a card database. To redeem loyalty points the customer again presents the card to the merchant and the merchants provides a corresponding discount to the customer on their purchase.
Pro:

• Enrolment: If a customer enrolls in the program, then rich information about
the customer is available for future use.
Cons:

• Enrolment: It is tedious process and typically involves an expenditure or minimum buying by the customer, thereby becoming a deterrent for customer's to enroll. Moreover, since each merchant's program is independent, it requires the customers to carry multiple cards.

• Reward: Reward of points requires the customer to carry their card with them, which again becomes tedious. Further, if the customer is not carrying the card then retrieval of information requires time and can cause inconvenience to the customer. Moreover, the reward of points usually has a lag from the time the spending was done, as the systems get updated offline usually end of the day. As a result a customer cannot carry out redemption of points earned for as long as seven to eight days. This reduces the impact of the points awarded for the customer.

• Redemption: Redemption again requires customers to carry their cards and again causes inconvenience if the customer is not carrying a card. Further, since each merchant's program is different, it does not allow customers to be rewarded points from one merchant and redeem at another. Since loyalty benefits correspond to about 1% of the value of the purchase, it takes the customer significant number of purchases before they can redeem the points for any item at the same merchant location.

• Information access: Customers need Internet access to be able to access their
current status of points. Since typically customers need access when they are in a shopping area they don't necessarily have access to the Internet and this makes access to information difficult. Merchants also don't get access to information instantaneously thereby not being able to offer on-the-spot marketing offers.

• Inter-merchant earn and burn settlement: This is not possible since the
program allots unique identity to the customer and inter-merchant earn and
burn requires the retailers to change their systems.

♦ Multi-brand loyalty program

These are programs in which a single multi-brand loyalty card is given to a customer for being rewarded points from multiple merchants and for redemption across merchants.
Pro:

• Rewards: Reward of points on a single identity from multiple merchants is possible on the card provided.

• Redemption: Redemption of points earned from one merchant at another merchant location is made feasible.
Cons:

• Enrolment: Enrolment of customers is still a tedious process requiring filling up of forms and in cases payment of fees.

• Rewards: The customers are required to carry a card. Further, for reward of points merchants need to integrate their billing systems with specific software that is a tedious process. Moreover there is a lag between the purchase and the reward of points.

• Redemption: Redemption again needs a card to be present making redemption in the absence of a card difficult and inconvenient for a customer. Customers cannot choose the set of merchants who could be enrolled on the multi-brand program.

• Information access-. Information access is possible only through the Internet,
which is inconvenient as typically customers like to access such information when in a shopping area and access to Internet in such places is not easily possible.

• Inter-merchant earn and burn settlement: Inter-merchant earn and burn is cumbersome.

It requires the back-end systems of merchants to be integrated. Further, new merchants cannot be added and removed easily.

OBJECTS OF THE INVENTION

The primary object of the present invention is to provide a methodology to accomplish a merchant-independent customer loyalty program that uses a single identity of the customer to accrue points and that overcomes the deficiencies of the prior methods mentioned in the previous section

Yet another object of the present invention is to provide a method by which customers can be automatically enrolled in a loyalty program without having to fill in any forms or having to carry out a minimum purchase before enrollment.

Still another object of the present invention is to provide a method that allows customers to be able to get reward benefits at one merchant location and redeem them at another merchant location.

Still another object of the present invention is to provide a method to allow for the group of merchants that allow for inter-merchant earn and burn to be dynamically and easily changed using the same single identity of the consumer.

Still another object of the present invention is to provide a method for the inter-merchant earn and burn to be carried out through the merchant card settlement process of banks.

Still another object of the present invention is to provide a method for customers to be informed of their points reward through the customer's mobile phone. Still another object of the present invention is to provide a method for customers to redeem their points through their mobile phone.

STATEMENT OF THE INVENTION

Accordingly, the present invention provides for A method for merchant-independent customer loyalty program to award and/or redeem loyalty points using single identity of customer, said method comprises steps of preparing a packet comprising information about purchase value and/or unique purchase transaction identifiers by merchant into a loyalty machine connected online to a loyalty server; parsing the packet by the server to update the information in a loyalty database based on loyalty rules set forth by the merchant; enrolling and thereby updating a customer automatically if their mobile number is not existing in the database and thereafter alerting the loyalty machine and customer about the updating of points by the server; sending short message by the customer through mobile phone to a pre-defined number using short code to identify the merchant and thereby requesting the server to redeem the points to purchase good and/or service at a merchant location; and sanctioning the request of redemption based on the customer's balance and merchant rules and thereafter alerting the merchant about redemption to provide the goods and/or service to the customer, and also A system for merchant-independent customer loyalty program to award and/or redeem loyalty points using single identity of customer, said system comprises a loyalty machine at a merchant location for entering of transaction information; loyalty server to establish communication with the loyalty machine and to capture the transaction packets coming from the machine; a database connected to the server to store information about the transaction; and a mobile phone to receive customer alerts from the server and to carry out transactions.

BRIEF DESCRIPTION OF THE ACCOMPANYING DRAWINGS

The preferred embodiments of the invention will hereinafter be described in conjunction with the appended drawings provided to illustrate but not in any limitative sense.

Figure 1 shows a possible architecture of the loyalty system.

Figure 2 shows the flow chart for enrolment and profile creation by a customer

Figure 3 shows the flow chart for transaction acceptance at loyalty server and alert to customer

Figure 4 shows the flow chart for customer information request processing.

Figure 5 shows the flow chart for redemption request processing

Figure 6 show the transaction packet format for communication of loyalty reward information from a loyalty machine to loyalty server

Figure 7 shows the components of a loyalty machine.

Figure 8 shows the points reward mechanism

Figure 9 shows the merchant settlement process for rewards

Figure 10 shows the merchant settlement process for redemption

Figure 11 shows the customer password setting process.

DETAILED DESCRIPTION OF THE INVENTION

The primary embodiment of the present invention is a method for merchant-independent customer loyalty program to award and/or redeem loyalty points using single identity of customer, said method comprises steps of preparing a packet comprising information about purchase value and/or unique purchase transaction identifiers by merchant into a loyalty machine connected online to a loyalty server; parsing the packet by the server to update the information in a loyalty database based on loyalty rules set forth by the merchant; enrolling and thereby updating a customer automatically if their mobile number is not existing in the database and thereafter alerting the loyalty machine and customer about the updating of points by the server; sending short message by the customer through mobile phone to a pre-defined number using short code to identify the merchant and thereby requesting the server to redeem the points to purchase good and/or service at a merchant location; and sanctioning the request of redemption based on the customer's balance and merchant rules and thereafter alerting the merchant about redemption to provide the goods and/or service to the customer.

In yet another embodiment of the present invention, the unique purchase transaction identifier is a bill number and the customer's mobile number.

In still another embodiment of the present invention, one or more merchant and/or customer identifiers are used in the transaction sent to the loyalty server. In still another embodiment of the present invention, the mobile number is optionally sent to the server through a RFID tag attached to the mobile phone containing the mobile number.

In still another embodiment of the present invention, the method supports one or more advertisement to be embedded in the alert sent to the client.

In still another embodiment of the present invention, the advertisement is selectively chosen based on information about the merchant location and time of the transaction to directed marketing to the customer.

In still another embodiment of the present invention, the Loyalty rules are set and updated by the merchant at any time to link award of loyalty points to the customer's history, time and day of purchase, mobile number of customer and any other predetermined parameters are sent from the machine to the server for rewards.

In still another embodiment of the present invention, the information on loyal customer of a merchant is sent to the merchant on a pre-set frequency and/or on demand based on the merchant's requirements.

In still another embodiment of the present invention, the merchant at any time is able to reconcile the loyalty transactions performed during a period of time.

In still another embodiment of the present invention, the method enables the customer to redeem points from a merchant different from the one from whom the points are accrued.

In still another embodiment of the present invention, nominal value of points of one merchant and that of another is set based on a rule in the loyalty server to allow for award and redemption from different merchants.

In still another embodiment of the present invention, the different merchants allows for such exchange of loyalty points is defined in the server.

In still another embodiment of the present invention, communication between the server and the machine is made secured using an encryption technique.

In still another embodiment of the present invention, security keys for the encryption
and decryption is set one time or exchanged at a pre-determined frequency between
the machine and the server.

In still another embodiment of the present invention, the packet optionally contains
card number or a token number to differentiate mode of payment like card payment or
cash payment.

In still another embodiment of the present invention, another token number is used in
case the payment is done by cherub.

In still another embodiment of the present invention, the method supports billing
transactions entered into billing system to be reconciled with the transaction in the
loyalty machine to ensure that no transactions are in error.

The In still another embodiment of the present invention, the method allows the merchant to dynamically request for a change in the loyalty rules through a short-message service or through the internet and for the changed loyalty rules to be updated on the server immediately.

In still another embodiment of the present invention, the method uses the customer bioinformatics identifier like fingerprint and/or retinal scan and/or face scan for identification of the customer

Another important embodiment of the present invention is a system for merchant-independent customer loyalty program to award and/or redeem loyalty points using single identity of customer, said system comprises a loyalty machine at a merchant location for entering of transaction information; loyalty server to establish communication with the loyalty machine and to capture the transaction packets coming from the machine; a database connected to the server to store information about the transaction; and a mobile phone to receive customer alerts from the server and to carry out transactions. In still another embodiment of the present invention, the loyalty machine is selected from a group comprising Electronic Data Capturing machine (EDC), PDA and computer system.

In still another embodiment of the present invention, the communication network is wire line, wireless, cable, VoIP, and Circuit Switched Network. In still another embodiment of the present invention, the loyalty machine is connected online to the loyalty server through wired or wireless connection. In still another embodiment of the present invention, the loyalty server provides a merchant administration interface for the merchant to configure loyalty rules and a customer interface for the customer to personalize the access. In still another embodiment of the present invention, the alerts is provided to the customer either on the mobile phone or through a printed slip of paper provided by the merchant.

The method of rewarding points to a merchant is shown in Figure 8. Once a customer has completed the purchase of goods or services at a merchant location the cashier enters the customers bill details (bill no. and value) and the customer's identity into a loyalty machine. These details are taken and formed into a transaction packed using a transaction processing protocol and then communicated through a communication fink to a backed server. The server then parses the information and assigns reward benefits to the customer against the customer's identity. In case the merchant is associated with a group of merchants for cross merchant earn and burn then the points are credited for the customer against the group identity. The customer can then redeem the points at the same store or any group store. The reward benefits and the loyalty management expenses are debited to the merchant's daily card settlement, thereby providing a seamless way of carrying out loyalty settlement. In the same way if a customer does a redemption then the value of the benefits redeemed are credited to the merchant from whose location the redemption is carried out. The settlement process for rewards and redemptions is shown in Figure 9 and 10.

The said method comprises of following steps:

Step 1: A merchant entering information about the purchase value, a unique purchase transaction identifiers, such as a bill number, and the customer's mobile number into a loyalty machine connected online to a loyalty server.

Step 2: The loyalty server recording the transaction into its database using the merchant's identity and consumers mobile number as unique identifiers for the transaction. The server further allocating loyalty points against this transaction based on the rules defined by the merchant for mapping purchase value to loyalty points.

Step 3: The server sending an alert to the customer informing the customer about the loyalty points credit and the current balance available with the customer from that merchant.

Step 4: The server informing the merchant's card settlement bank on a daily basis, at end of day, about the amount of money to be debited from the merchant's daily settlement, where the amount of money corresponds to the total loyalty benefit awarded by the merchant that day and the management fee for loyalty management.

Step 5: The server sending reports to the merchant at intervals determined by the merchant containing information regarding balance of points available with its loyal customers.

Step 6: A customer wishing to redeem points to purchase a good or service at a merchant location, sending a short-message (SMS or otherwise) through the mobile phone to a pre-defined number, using a short-code for identifying the merchant. The server then sanctioning the redemption based on the customer's balance and sending a randomly generated approval code to the customer's mobile.

The customer then using the approval code at a merchant location to purchase goods or services against the points redeemed. The server then matching the approval code and mobile number and approving he purchase against the redemption points.

Step 7: The merchant at the end of the day sending information on the redemptions, done to the server. The server in turn sends the information about the customer who redeemed the points to the merchant's card settlement bank which in turn debits the customer account and credits the merchant's account with the same, after deducting a loyalty management fee.

Step 8: Any customer wishing to inquire about points balance against a merchant being able to do so by sending a short-message through the mobile phone to a predefined number with the merchant short-code and getting an alert back from the server on the current balance.

Step 9: The reward points debited from the merchant being maintained against the customer identity and debited whenever the customer redeems the points for goods or services.

The instant invention also provides additional features wherein a set of merchants can group together to allow for inter-merchant reward and redemption. A customer having earned points from any merchant of this group can then redeem points at any other merchant, and also the customer access to rewards information is protected by a Personal Identification Number (PIN) which is set and reset through a mobile phone. When a customer for the first time enters their mobile number in a merchant loyalty machine, the customer is automatically enrolled in the loyalty server. When the customer approaches the website that accesses the server, the customer enters the mobile number which is matched to determine if it exists and it is the first time the customer is approaching the server, the server sends a randomly generated password to the mobile number. The customer in future can reset the password if necessary through the mobile phone or set a new password.

Framework - System & Methodology

The object here is to specify a system to accomplish a merchant-independent loyalty program that uses a single customer identity to reward points against purchases made by the customer at the merchant location and redeem points using the same identity at merchant locations.

This system consists of:

1. A loyalty machine that is a piece of hardware with software running on it that allows a merchant to enter the value of purchase, the transaction identifier and the customer's mobile number through a menu interface. Since all the entries identified above are generally numbers, the same can be done through the keypad of an electronic data capture device, a mobile phone, the number keypad of a keyboard connected to a computer or otherwise. The loyalty machine is connected online to the loyalty server through a wired or wireless connection.

2. A loyalty server that captures the transactions coming from the loyalty machine and then updates them in a database. The updating is based on the merchant and customer identifiers and the loyalty points awarded are based on the merchant's loyalty rules. The loyalty server also presents a merchant administration interface for the merchant to configure loyalty rules and a customer interface for the customer to personalize the access. The loyalty server is a piece of software running on server*grade hardware with capability to provide for quick database access and queries. It also has a connection to a mobile network to which it outputs alerts for customers and through which it accepts merchant or customer short-message queries. The software also generates reports for merchants as per their needs.

An architecture and a methodology are proposed which would enable a framework to enroll, reward points, redeem points and provide for information access to merchants and customers.

Specifically:

1. Enrolment: The act of entering the mobile number of the customer the first time at any such loyalty machine in any merchant location automatically enrolls the customer, thereby bypassing the need for any tedious enrolment. It also provides for instantaneous gratification through a message alert send to the customer immediately.

2. Reward: Reward of points happens through a transaction sent to the loyalty server by the loyalty machine and the server parsing the information and updating the database using the merchant and customer identities.

3. Redemption: Redemption is done through a short-message sent by the customer to a pre-defined number using a merchant short code as merchant identifier. An authorization code is received that is used by the customer at the merchant location to fulfill the redemption. Inter-merchant redemption is also possible in case of merchant's belonging to a common group.

4. Information access: Information access is available through an online merchant and customer login, providing for access to their database that can be queried and organized based on various identifiers.

In Figure: 1 a possible implementation of the loyalty system architecture is shown. In this case, an electronic data capture machine (EDC machine) is used at a merchant location as a loyalty machine for entering the purchase information. The packet of information then is sent to the loyalty server over a wired or wireless link. One knowledgeable in the art can see that the loyalty machine could be implemented on a PC or any other compute platform. Similarly, one knowledgeable in the art can see that the communication link could be wired or wireless.

In Figure 2 the automatic enrolment process is described. Whenever a merchant enters the bill number, payment value and mobile number of a customer, the EDC machine prepares a packet (as shown in Figure 3) and then sends the same to the loyalty server through a communication link. The loyalty server then parses the information and then compares the mobile number with its database of existing users to identify whether a person is already registered and if not then a customer profile is automatically created.

In Figure 3 the packet format for the packet sent to the loyalty server is shown. The packet format is a generic representation indicating that information related to merchant identification number, customer mobile number, bill number, payment amount, time stamp and loyalty server IP address is to be sent. Additionally the EDC machine ID can be sent. The packet format shown is only a representation, anyone knowledgeable in the art can see that the sequence of information or division of information into multiple packets or additional optional fields can be added.

In Figure 4 the reward process is shown. When the packet is received, first the server checks if the machine sending the information is an authorized machine. If yes, then the packet is parsed to retrieve the required information and update the database. Once the database is updated, then an alert is sent to the EDC machine indicating success in the transaction. This alert can be used to print an acknowledgement for the customer if needed and also file one for the merchant's records. In parallel an alert is sent to the customer indicating the loyalty points awarded.

In Figure 5 the method of customer accessing information on their reward points is shown. The customer needs to send a message comprising merchant identification number and request type to a pre-defined short-code. The message is parsed by the loyalty server and the information retrieved and sent back to the customer.

In Figure 6 the redemption method is defined. In this, the customer sends a redemption request with points to be redeemed and merchant identifier to a predefined short-code. An authorization number is sent back. This number can be used by the customer at a merchant location to get the redemption. The redemption request once approved at the server sends back an authorization to the terminal and also an alert to the customer.

In Figure 7 the loyalty machine components are shown. It needs to have a central processing unit on which the loyalty software will run. It further has a printer for acknowledgements, a communication link, a display unit and a keypad. It can also have a swipe card and smart card access. Any one knowledgeable in the art can see that this can be implemented through a computer system or through an EDC machine or through a PDA.

In Figure 8 the reward process is shown. The point reward is done independent of whether the payment transaction was by cash or card and it hits an independent server. In this case the loyalty server is called a LIME server.

In Figure 9 the merchant settlement for reward process is shown. The loyalty expenses are debited from the payment due to the merchant from the card transactions. As an example the entity acquiring the loyalty transactions is shown as Innovate. The entity that acquires the merchant's regular card transactions is shown as Global Payments, as an example, with HSBC as a backend bank for processing the debit and credit transactions.

It is evident to anyone that the card transactions could be processed by any other companies. The case shown here is a generic case of the front-end acquisition being different from the bank. In several cases the bank itself could be the acquirer. A sample merchant, Reliance Retail is shown for rewards.

In Figure 10 the merchant settlement for redemption process is shown. The loyalty redemption value is credited to the merchant payment. The same example entities as shown in Figure 9 are considered here. A sample merchant, Shoppers Stop is shown for redemption.

In Figure 11 the customer password setup process using a mobile number as identification is described.

We claim:

1. A method for merchant-independent customer loyalty program to award and/or redeem loyalty points using single identity of customer, said method comprises steps of;

i. preparing a packet comprising information about purchase value and/or
unique purchase transaction identifiers by merchant into a loyalty machine connected online to a loyalty server;

ii. parsing the packet by the server to update the information in a loyalty database based on loyalty rules set forth by the merchant;

iii. enrolling and thereby updating a customer automatically if their mobile number is not existing in the database and thereafter alerting the loyalty machine and customer about the updation of points by the server;

iv. sending short message by the customer through mobile phone to a predefined number using short code to identify the merchant and thereby requesting the server to redeem the points to purchase good and/or service at a merchant location; and

v. sanctioning the request of redemption based on the customer's balance and merchant rules and thereafter alerting the merchant about redemption to provide the goods and/or service to the customer.

2. The method as claimed in claim 1, wherein the unique purchase transaction identifier is a bill number and the customer's mobile number.

3. The method as claimed in claim 1, wherein one or more merchant and/or customer identifiers are used in the transaction sent to the loyalty server.

4. The method as claimed in claim 1, wherein the mobile number is optionally sent to the server through a RFID tag attached to the mobile phone containing the mobile number.

5. The method as claimed in claim 1, wherein the method supports one or more
advertisement to be embedded in the alert sent to the client.

6. The method as claimed in claim 5, wherein the advertisement is selectively chosen based on information about the merchant location and time of the transaction to directed marketing to the customer.

7. The method as claimed in claim 1, wherein the loyalty rules are set and updated by the merchant at any time to link award of loyalty points to the customers history, time and day of purchase, mobile number of customer and any other predetermined parameters are sent from the machine to the server for rewards.

8. The method as claimed in claim 1, wherein the information on loyal customer of a merchant is sent to the merchant on a pre-set frequency and/or on demand based on the merchant's requirements.

9. The method as claimed in claim 1, wherein the merchant at any time is able to reconcile the loyalty transactions performed during a period of time.

10. The method as claimed in claim 1, wherein the method enables the customer to redeem points from a merchant different from the one from whom the points are accrued.

11. The method as claimed in claim 1, wherein nominal value of points of one merchant and that of another is set based on a rule in the loyalty server to allow for award and redemption from different merchants.

12. The method as claimed in claims 10 and 11, wherein the different merchants allows for such exchange of loyalty points is defined in the server.

13. The method as claimed in claim 1, wherein communication between the server and the machine is made secured using an encryption technique.

14. The method as claimed in claim 13, wherein security keys for the encryption and decryption is set one time or exchanged at a pre-determined frequency between the machine and the server.

15. The method as claimed in claim 1, wherein the packet optionally contains card number or a token number to differentiate mode of payment like card payment or cash payment.

16. The method as claimed in claim 15, wherein another token number is used in case the payment is done by cheque.

17. The method as claimed in claim 1, wherein the method supports billing transactions entered into billing system to be reconciled with the transaction in the loyalty machine to ensure that no transactions are in error.

18. The method as claimed in claim 1, wherein the method allows the merchant to dynamically request for a change in the loyalty rules through a short-message service or through the internet and for the changed loyalty rules to be updated on the server immediately.

19. The method as claimed in claim I, wherein the method uses the customer bioinformatics identifier like fingerprint and/or retinal scan and/or face scan for identification of the customer

20. A system for merchant-independent customer loyalty program to award and/or redeem loyalty points using single identity of customer, said system comprises;

i. a loyalty machine at a merchant location for entering of transaction information;

ii. loyalty server to establish communication with the loyalty machine and to capture the transaction packets coming from the machine;

iii. a database connected to the server to store information about the transaction; and

iv. a mobile phone to receive customer alerts from the server and to carry out transactions.

21. The system as claimed in claim 20, wherein the loyalty machine is selected from a group comprising Electronic Data Capturing machine (EDC), PDA and computer system.

22. The system as claimed in claim 20, wherein the communication network is wireline, wireless, cable, VoIP, and Circuit Switched Network.

23. The system as claimed in claim 20, wherein the loyalty machine is connected online to the loyalty server through wired or wireless connection.

24. The system as claimed in claim 20, wherein the loyalty server provides a merchant administration interface for the merchant to configure loyalty rules and a customer interface for the customer to personalize the access.

25. The system as claimed in claim 20, wherein the alerts is provided to the customer either on the mobile phone or through a printed slip of paper provided by the merchant.

26. The method and system for merchant-independent customer loyalty program to award and/or redeem loyalty points using single identity of customer is substantially as herein above described in the specification with respect to accompanying drawings.