American Express Using Blockchain For Membership Rewardsbr>
Financial services giant American Express (Amex) has integrated blockchain technology to its membership rewards program.
Amex is leveraging Hyperledger, an open source blockchain project under the Linux Foundation, to allow merchants to create tailored offers involving membership rewards points on their own platforms that can deepen engagement and reward customers. The loyalty program offers card members choice and flexibility for earning and redeeming points across a number of categories including travel, dining, entertainment and more.
On the back-end, Amex will set up a private channel on their blockchain implementation with the merchant to securely pass information back and forth. Merchants can then create custom membership rewards earning structure and assign bonus to items at product or stock keeping unit (SKU) level. Once the offers are live, when a card member makes an eligible transaction at the merchant, the smart contracts will automatically pass the anonymized information on the transaction to Amex using its private blockchain channel.
“They can create programs based on a time of day, day of the week, by incentivizing a customer to download their app,” said Chris Cracchiolo, who heads up the Membership Rewards program for AmEx. “The number of ways merchants can reward customers with membership reward points will be exponentially increased.”
Amex is currently conducting a pilot trial with its merchant partner Boxed. The online merchant is offering eligible membership rewards-enrolled card members select promotion on specific products on its website. The offer features the opportunity to get five times membership rewards points. In the coming months, Amex plans to make the loyalty program available to all of the company’s merchants.
Back in March, American Express’ travel arm filed a patent related to faster payments and blockchain technology. The blockchain patent describes using the tech to facilitate payments between two parties by using transaction requests as a proxy. If approved, the solution would automate processing and adjust accounts on both ends of the transaction.