Cryptocurrency users have become accustomed to Bakkt in recent months. While the company provides exposure to bitcoin futures, it is exploring other initiatives as well.
One of those initiatives focuses on creating a universal digital wallet. Not just for cryptocurrencies, but reward points, bank cards, and everything else.
The Fractured Rewards Scheme System
Consumers can earn reward and loyalty points from many different sources. A lot of stores have their own reward cards. There are also hotels, air miles, public transportation, and so much more. Every different company has its own closed-off ecosystem where these points are stored.
While that works quite well, it also creates a big hassle. A lot of these reward and loyalty points only remain valid for so long. It is a well-known fact that consumers often forget to cash in on their card balances in time. That is not how this system is supposed to work by any means.
Making matters worse is the lack of conversion options. One cannot convert unused air miles to a discount at a regular store, for example. All rewards are tied to their own stores and brands. While that is only normal, the consumer of the modern age requires a very different approach altogether.
Bakkt to the Rescue?
A solution to this problem may come from an unlikely source. Bakkt acknowledges the current rewards system is broken beyond repair. Coming up with a viable product to put an end to those concerns is not straightforward. Loyalty point balances often can’t be transferred to other users. Nor can they be bought or sold.
Bakkt is not going about this venture alone. The company aims to acquire a specialist active in the rewards redemption industry. Bridge2 Solutions of Atlanta is one of the biggest players in that space.
No one Ignores the Benefits
Contrary to what one may think, the companies issuing these loyalty points also see merit in this approach. No one wants to deal with liabilities on their balance sheet. Unclaimed and unused reward points always pose a serious risk. If a surge of point redemption occurs, financial losses can begin to mount very quickly.
One interesting finding is how CFOs envision a marketplace system. Through this marketplace, the rates of redemption can be smoothened. Companies can offer customers varied dollar rates for their points. That system would suit both the businesses and consumers alike.
It may take a while until the solution envisioned by Bakkt comes to market. Bridge2 is currently conducting a test with Loyalty Pay. It gives sponsors an option to issue a digital credit card capable of converting rewards to cash. That is certainly a big step in the right direction.