Part 4: Blockchain could make loyalty schemes more user-friendly

There has been a lot of discussion about blockchain’s potential applications in terms of payment and distribution, but another huge area of opportunity is within the loyalty programme space.

In a recent ABTA webinar, Sara Pavan, head of Amadeus Madrid’s Innovation Partnership Programme, pointed out that there were many frustrations commonly voiced by frequent travellers when it came to loyalty programmes, particularly in terms of the complexities involved in redeeming points or miles.

“To put this into numbers,” said Pavan, “60% of people do not redeem their air miles as they feel they need to collect too many to see any real benefit, and a further 70% wish they could use air miles on something different from the products and services currently offered by their loyalty programme.”

Blockchain could potentially offer solutions to these problems, said Pavan. “Imagine if you could access all your loyalty points across different companies and programmes in one unique digital wallet. Imagine the possibility of having these points accredited to you almost in real time as you accumulate them and redeem them almost immediately, or even transfer them to a friend if you want. Imagine there was a community-driven marketplace for you to use instead of the limited spending options made available to you by different vendors. This is something blockchain technology can improve.”

Some of this technology is already making its way into the market, points out Lloyd Barkhuizen, sales director of FCM Travel Solutions. “Singapore Airlines has launched the world’s first airline loyalty programme based on blockchain technology,” he said. “Members will be able to use a digital wallet to store and record points, which offers many advantages.”

Another example of blockchain technology being used by loyalty programmes is Loyyal, a San Francisco-based start-up that aims to improve interoperability between schemes. A White Paper by Amadeus entitled, ‘Blockchain: harnessing its potential in travel’, says: “All loyalty schemes can share its single ledger on blockchain, which makes transferring a traveller’s points simple, fast and cost-effective.”

Examples of Loyyal’s vision include travellers being able to access loyalty points in real-time. This means potentially landing from a flight and having the points credited to an app immediately, which could be used to pay for the transfer from the airport. Loyyal is working with a Middle Eastern carrier to explore the opportunities their solutions can bring.

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