Impossible is Nothing

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Impossible is Nothing - Take the World from another point of View
On October 20, 1968, at the Mexico Olympics, Richard Douglas Fosbury (aka Dick Fosbury)
created sporting history when he jumped a high bar placed at 2.24 meters with a revolutionary
technique that he had started experimenting with at age 16. Unlike other athletes who either used
the straddle-roll or the scissors technique to clear the bar, Fosbury approached the target in the
reverse direction - with his back facing the bar. The Fosbury Flop technique was superior to the
other two techniques because it allowed the jumper to lower its center of mass below the target
and clear the hurdle with less energy. The Fosbury Flop technique is often used as a metaphor
to convey out of the box thinking and also to emphasize that innovative ideas are discovered
through intuition rather than hard work.
The Customer Transaction Record (CTR)
The Customer Transaction Record (CTR) is a statement containing information about the money
paid for a product or service. When you purchase a product or service online, the transaction
record is captured in the merchant/service provider’s database and you receive an electronic
invoice of your purchase via email or some other digital format. If you purchase a product or
service offline (e.g. at a brick and mortar establishment), the merchant/service provider captures
your payment in an electronic format but gives you a paper invoice for your purchase. An
electronic record of the transaction invoice is of tremendous value both to the
merchant/service provider as well as the customer. Merchants and service providers can
learn about a customer’s purchasing behavior and run loyalty programs as well as targeted

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advertising campaigns on the back of customer transaction records. Customers can potentially
use the transaction records to understand their spending and also leverage the same to receive
reward points or cashback from merchants/service providers.
Most customers do not have access to CTRs in an electronic format. Merchants and service
providers typically distribute the CTR to customers in paper format and keep electronic copies of
the transaction record in their data silos that are typically out of bounds of customers and the rest
of the world. The illustration below shows a few examples of offline/online Customer Transaction
Records representative of this problem.

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The Customer Transaction Record is logically the property of the customer since he/she
was responsible for its creation. If the customer does not purchase a product or service,
the transaction record is not created. So why is it that many merchants/service providers retain
a copy of customer transaction records along with the associated customer profile in their
databases. How does this process work and what can we do to reverse the ownership such that
the CTR is exclusively owned by the customer and shared anonymously with a merchant/service
provider only with the customer’s consent.
Problems with the retention of Customer Transaction Records
Many merchants/vendors and some banks issue co-branded payment cards to customers
wherein the customers earn reward points or cashback every time they make a purchase at a
designated store or business establishment using the co-branded card. When customers take a
co-branded payment card from a merchant/vendor or bank, they sign up to an agreement with
the card issuer whereby their transaction records are retained by the merchant/vendor or bank
and used for promotions, business insights, etc. Merchants, vendors, and banks do not share the
customer transaction records with their competitors and are required to abide by any applicable
privacy laws specified by the regulator (typically a government body). The said practice, although
favorable both to merchants/service providers and customers, is limited in scope and benefits.
When a customer is issued a co-branded card, he/she earns reward points or cashback only if
the card is used at establishments that are a part of the issuer’s network. If the customer uses the
co-branded card at an establishment that is not part of the network, the customer receives no
benefit because the card issuer does not profit from a purchase initiated outside its network.
A customer retention system linked to a merchant/service provider specific payment card has
other problems as well. Every time a customer signs up for a co-branded payment card, they give
their private and confidential information to a business that may not be able to protect the
information from theft and/or misuse. Secondly, when a customer signs up for another payment
card, it increases the number of cards that the customer needs to store and manage. Although
there are mobile apps that allow customers to manage payment cards via a smartphone, they
require several steps to activate and deactivate, thereby increasing the time spent at the POS
during a purchase.
Proposal for Inverted ownership of Customer Transaction Records
The problem with retention of customer transaction records is surprisingly easy to solve given the
cooperation of banks, payment card processors (e.g. Visa, MasterCard), merchants/service
providers, and of course, customers themselves. Let’s understand the solution with the help of
the diagram given below. The diagram shows two boxes representing Online Transactions and
Offline Transactions respectively. The Online Transactions box contains a picture of a computer
representing electronic commerce. The Offline Transactions box contains a picture of a Point of
Sale (POS) setup comprising a Payment Cube, a POS Device, a Router, and a Printer. In the
diagram, there are three modifications too. The Payment Cube has a Microchip to write a
transaction record on a payment card, the connection between the POS Device and the Router
has a Software Loopback, and the connection between the POS Device and the Printer has a

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Hardware Loopback. The Online Transactions and Offline Transactions boxes are both
connected to a Customer Account containing its transaction records stored on a cloud server.
Unlike the previous diagram that showed the same transaction records locked in the silos of
different merchants and distributed to the customer in different formats (paper and digital), the
new diagram shows a single entity containing all of the transaction records. The new diagram is
a model for inverted ownership of Customer Transaction Records. What are the benefits of
keeping all transaction records in a centralized database; How does it benefit customers,
merchants/service providers, and the world at large? How is it possible to keep all transaction
records in one database without compromising the private and confidential information about
customers? Let’s answer all these questions one at a time.
Advantages of a Centralized Database of CTRs
A customer transaction record is a window to a person’s taste, preferences, and spending habits.
When a customer repeatedly purchases a product or visits the same service provider (e.g.
restaurant), he/she endorses the product or service provider. Alternatively, if the same customer

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switches between two competing products or visits a restaurant far and away from its residence
or workplace - even though there are many compelling options closer to the customer - he/she
rejects the product or service provider. Market insights such as this can be very valuable to
customers as well as businesses and service providers. Customers can access the aggregate
values of such information via a search engine and quickly locate a product, business, or service
provider with greater customer retention. Likewise, businesses can also access the database
containing customer taste/preferences and use the information to plan their manufacturing and
distribution capacities, advertising budgets, etc.
The transaction record available to a customer through its bank or payment card issuer does not
contain an itemized listing of products or services purchased by the customer. When a customer
makes a purchase through its payment card, the merchant/service provider transmits information
containing the merchant/service provider name, address, and the total value of the transaction to
the card issuer. If the card issuer and the merchant are the same entities (e.g. in the case of a
co-branded card), then the merchant has full information on the transaction including the
customer’s private and confidential information, such as his/her name, address, age, telephone
number, and email. But if the card issuer and the merchant are different entities, then the
transaction information is hidden from the card issuer and the customer details are hidden from
the merchant.
Recording CTRs in a Centralized Database on the Cloud
A customer transaction record does not need to be printed. It can be recorded electronically into
the customer’s personal account instead and the information thus captured can assist the
customer as well as merchants/service providers and the rest of the world. E-commerce portals
like Amazon capture customer transaction record electronically in a structured format. This
benefits Amazon as well as the customer. When Amazon captures a transaction record, it allows
the customer to submit a review of the product that he/she acquired and purchase the same
product again by clicking the transaction record. Amazon extracts significant market insights from
the transaction records and uses the information to optimize its business processes. Amazon’s
strategy for capturing customer transaction records is not the best, however. Firstly, Amazon
requires that before a customer makes a purchase, he/she needs to add a method of payment.
This is typically a credit/debit card or an Amazon gift card. Secondly, Amazon also requires its
customers to provide their email address at the time of creating their Amazon account. Both these
requirements give away a customer’s private and confidential information to Amazon. Finally, the
customer transaction records captured in Amazon are not available to the customer’s trusted
network or even the rest of the world. Since the data is locked in Amazon’s databases, it is not
possible to aggregate the values of such records with the values from other sources of customer
transaction records, such as another merchant/service provider’s transaction database.
An e-commerce portal like Amazon or a brick and mortar store that provides co-branded payment
cards can receive customer transaction records and run a loyalty program without requiring a
customer to provide their confidential information. This can be achieved via a unique Token
Number mapped to every payment card owned by a customer. To allow a merchant/vendor to run
a loyalty program without a merchant specific payment card or identifier, such as a QR code, the

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POS setup as shown in the preceding graphic, is connected to a platform containing a transaction
database. This allows the merchant/vendor and the customer to create their own accounts under
the platform. The platform subsequently allows the customer to add Token Numbers
corresponding to their payment cards inside their personal accounts. Customers can add Token
Numbers to their personal accounts via their online banking accounts with the card issuer or
dynamically during a transaction. Payment card issuers tokenize payment cards (via a one-way
hash) at the request of the cardholder and provide an encrypted copy of the stored Token Number
to the payment processor every time they receive a request for the Token Number. The platform
uses Token Numbers to associate a payment card used during a transaction with the customer
account containing the Token Number. The Token Number uniquely identifies a payment card
but cannot be mathematically reversed to reveal the payment card number. It is encrypted with
the public key of the platform and can be decrypted only via the matching private key deployed at
the platform.
When a transaction is initiated, the transaction record may be saved in the customer’s account
as well as the associated merchant’s account. The platform may link the customer’s transaction
record with the merchant’s account if the customer is enrolled in the merchant’s loyalty program.
If the customer is not enrolled in the merchant’s loyalty program and the merchant has created a
loyalty program, the customer may be prompted to register itself with the merchant’s loyalty
program. If the customer consents to enroll itself with the merchant’s loyalty program, the
transaction record may be linked with the merchant’s account. If the customer declines to enroll
with the merchant’s loyalty program, the customer action is recorded with the platform and the
customer is not prompted to register with the merchant’s loyalty program again. If the merchant
has not created a loyalty program, the customer transaction record is saved in the customer’s
account with the platform and the merchant does not receive any information about the customer
record.

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The diagram below describes how this process will work.
Protecting Customersʼ Private and Confidential Information
Transaction records captured in this manner allow a customer to get instant visibility on their
spending habits across payment methods and payment cards. The platform also allows a
customer to join a merchant’s loyalty program without providing any confidential information about
itself. The diagram below shows a snapshot of four database tables comprising: Customer,
Transaction, Merchant, and Bank. The information provided in the tables reveals that each party
has visibility only on the information that they own. The Merchant has information on the
transactions done by the customer (if the customer signed up for the merchant's loyalty program)
within its store/partner network and uses this information to compute the loyalty credits for the
customer. However, it requires consent from the customer before receiving information on the

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customer’s transactions outside its own store/partner network. It is understood that merchants
would provide loyalty credits to a customer to receive such information. The Bank has information
on the customer spending across market segments but does not know how the money was spent
because the transaction records are not shared with the bank. The Transaction database does
not know the customer behind the Token Number because the Bank is not required to share this
information with the platform hosting the Transaction database. The only party having full access
to the transaction records is the customer making the purchases. The Customer can share its
transaction records with the other parties in the system without revealing its identity.

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Final Thoughts
The story of the humble Customer Transaction Record is akin to the story of the human
Cord Blood. Cord blood (umbilical cord blood) is the blood that remains in the placenta and in
the attached umbilical cord of a female after childbirth. Until 1987, doctors routinely discarded the
umbilical cord connecting the mother to its child, soon after delivery. The first cord blood (CB)
transplant was performed in 1988 in France on a patient (Matthew Farrow) who was diagnosed
with Fanconi anemia when he was five years old. The donor was his HLA-identical sister who was
determined by prenatal diagnosis to be HLA identical and not affected by the Fanconi mutation.
The CB was collected and cryopreserved at birth. The transplant was successful without GvHD
and the patient is currently alive and free of disease more than 31 years after transplant, with full
hematologic and immunologic donor reconstitution.
The successful freezing and subsequent utilization of cord blood led, in 1991, to the establishment
of the first cord blood bank from voluntary donors in New York. It is reported in ScienceDirect that
currently there are over 54 public cord blood banks in different parts of the world with more than
350,000 units frozen and ready to be used. Cord blood transplantation is being used as an
alternative to bone marrow transplantation, and more than 14,000 transplants have been
documented.
Most people throw their transaction invoice soon after accepting the sale unless the purchase
comprises items that are either high value (e.g. television, cellphone) or require the correct fit (e.g.
apparels). When an invoice is retained, it is mostly in a format that is not amenable to electronic
processing. A centralized repository of Customer Transaction Records can assist in capturing
contextually relevant feedback for every product/service provider via quick and easy forms as
shown below.

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When transaction records are stored at a central location, it also becomes possible to analyze
spending, check transactions, measure consumer behavior, lookup reviews, and identify service
providers trusted by our social network as shown below.

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Note: The above post is an extract from two non-provisional patent applications filed by the author
with USPTO and WIPO. To discuss any business/investment opportunity with ValiDeck
International, please contact:
Alok Narula
Email: alok.narula@valideck.com
Tel: +1(226) 751-6476)