Mastercard Incorporated
METHODS AND SYSTEMS FOR DETERMINING AN OPTIMAL INTERBANK NETWORK FOR ROUTING REAL-TIME PAYMENT TRANSACTIONS

Abstract:

Embodiments provide methods and systems for determining optimal interbank network for routing payment transactions. Method performed by server system includes accessing historical transaction data of acquirer from acquirer database, determining payment transaction types corresponding to future payment transactions processing via acquirer for particular period of time based on historical transaction data, predicting fixed interchange cost for each payment transaction type incurring to acquirer for routing future payment transactions through interbank network of interbank networks based on interchange prediction model, performing linear optimization utilizing set of metrics, to make decision whether to apply merchant-specific discount to particular payment transaction type, or not, and routing real-time payment transactions through optimal interbank networks with lowest total transaction cost. Set of metrics includes total transaction cost for each payment transaction type, discount factor of interbank network, and number of future payment transactions routing through interbank network. Optimal interbank network is determined using linear optimization.