Virtual Currency may no longer be "virtual" anymore

Just a moment ago, Finextra tweeted an piece of Amex-related news: American Express has filed a patent for a system and method for using loyalty rewards as a currency.Any loyalty practitioner will find this statement odd. Loyalty rewards mostly operate on the concept of a 'rewards currency'. So, what is so different about this? Further reading reveals that 'currency' in question, is one that is 'virtual' in nature. By 'virtual', it refers to currency that exists in the 'virtual' or a.k.a. internet/online world.

For hardcore online gamers or even Facebook amateur players, the 'virtual currency' is 'virtual money' used in the purchase of all things, well, virtual; like a potion here and there, or a zombie to grow your garden. As with money in the real-world, you have to 'work' to 'earn it'.

Amex put in $30 million in September for a 4-year-old company Sometrics that helps gaming companies set up the infrastructure to enable virtual-currency. With this, they may have made the most far-sighed investment in new business yet.

As the social-cultural sphere is increasing entrenched within the 'virtual', so is the economy. The world painted in the movie series Matrix may be a teeny bit far-fetched, but who is to say that the clothes, food supplies, armour and magic potions you buy in the cyber world are less important or valuable that the tangible real ones in the world?

Food for thought.

Accessing your rewards on a phone

In March 2011, OCBC Cards managed to complete the most large-scale loyalty platform implementation in recent memory. I was glad to be part of the project team to have made it happen.

In the time I have spent in customer loyalty, the primary focus had been on a few key elements, namely, the value of the reward currency, the relevance of the rewards earned, and the rate at which they are earned.

Back then, no one had anticipated the proliferation of social networking and the widespread use of the smart phone as a banking medium.

As these developments unfold in ever-increasing frequency and speed, it dawned on me, that a customer's view on rewards would also have altered by these changes. This is an epiphany that led me to think that the next battle ground in rewards is not in the 'earn', but the 'burn'.

While the rest of the card banking community tries to out-do each other in multiplier points earn, perhaps enabling a quick and easy way for customers to access their rewards currency anytime, anywhere, is the next big thing to disrupt the market?

I hope anyone who reads this will take a moment to visit the OCBC rewards mobile website: mobile.ocbc.com.

Although this is a mobile web-based service at the moment, I hope that in time, our recently released Android mobile banking app will incorporate rewards as a key functionality.

Meanwhile, have a look a a video on the much-talked about OCBC Android mobile banking app.

ZDNet interview of mobile banking product manager.

The Changing Face of Loyalty in Payment Cards

Some time ago, I blogged about a soon-to-be-published whitepaper on the subject of loyalty in payment cards, and how commoditisation is going to change the playing field of how programs should be run.

The paper has been kindly picked up by VRL and will be published in abridged form in the latest issue of Cards International. The full-length paper can be found here on Insight's website.

All comments welcome.

The Relevance of Loyalty in Credit Cards Today

A cursory check on the major banks in Singapore, Malaysia, Thailand, Philippines, and India revealed that almost all of the card products come with a default rewards program of some sorts. The most common form of rewards currency are points, rebates, and airline miles.

There was a time when loyalty programs were deemed the 'killer application' for credit cards. But there seems to be a growing proliferation of 'run-of-the-mill' programs.

What is the relevance of a card loyalty program to an issuer? Have we lost sight of the true business reasons for wanting a loyalty program in the first place?

In the next few weeks, I will be working on a white paper to explore this topic. In the meantime, do share with me your views.