System for dynamic prediction of interchange rates for credit card transaction processing

US11587092B2 · kind B2 · utility

Assignee

• Toast, Inc. · US

Inventors

• Pearse J. O'Flynn · Bantry, IE
• Hardeep K. Gill · Boston, US
• Alan Z. Zhao · Cambridge, US

Key dates

• Filing date: Mar 31, 2021
• Grant date: Feb 21, 2023
• Expiry date: Nov 11, 2041

Classification

• Technology area (CPC G): Physics
• CPC primary: G06Q40/12
• WIPO field: IT methods for management
• WIPO sector: Electrical engineering

Abstract

A computer-implemented method for predicting interchange charges includes: retrieving a historical transactions set, where each completed transaction in the set includes transaction features, a bank identification number (BIN), and a corresponding true interchange code; transforming all BINs in the set into a corresponding plurality of BIN features that comprise probabilities; creating a first training set including all transaction features, all pluralities of BIN features, and all true interchange codes associated with the historical transactions set; training a random forest model using the first training set and generating a second training set including rounded BIN features, rounded transaction features, discrete ones of the transaction features, and the true interchange codes; training the random forest model using the second training set to generate a trained random forest model for prediction of the interchange codes; and executing the trained random forest model for new transactions to generate corresponding predicted interchange codes.