Cryptocurrencies have moved past the realm of ‘crazy ideas’ to a reality that big companies want to take a bite off. More and more companies are either accepting cryptocurrencies as payment, developing their own native tokens or, like Mastercard, rewarding loyal customers with cryptocurrencies in their loyalty programs.
In the business world, loyalty programs are ways through which companies reward their customers and get important data on customers spending behaviors. Loyalty programs have proven, over time, to be an effective way to give back to customers and build brand loyalty.
Because customers are often leveraging loyalty rewards, it is a genius move that payment giants Mastercard are using cryptocurrencies in its loyalty programs. Mastercard has over 249 million cards in the United States alone and is testing the cryptocurrency as loyalty rewards to see how accepting her customers and merchants will be to the idea. Mastercard is partnering with crypto wallet company Bakkt to give her over millions of customers cryptocurrencies for being loyal.
WHY IS MASTERCARD AND BAKKT WORKING TOGETHER ON CRYPTOCURRENCY IN LOYALTY PROGRAM?
The growing demand for digital currencies has not gone unheard by big brands and federal governments. More people are joining the cryptocurrency train, either through developing projects on blockchain technology, mint NFTs on Ethereum and a host of other activities in web3.0. This growth, quite unprecedented in its adoption, is heralding a new wave of loyalty programs.
Mastercard and Bakkt, a crypto-wallet platform that allows users to buy and hold cryptocurrencies, are partnering on this one because:
- Mastercard wants to get more Gen Z, the younger generation, involved: young people are the most accepting of bitcoin and blockchain technology, with Gen Zs leading the way. Mastercard realizes that to get young people using their service, they need to tap into the blockchain and cryptocurrency ecosystem. Young people are demanding for a more differentiated and inclusive financial as well as payment system, and they are fully adopting cryptocurrency. Cryptocurrency serves the ‘away from the norms’ spirit of Gen Zs. So, it is imperative that Mastercard provide a system for them.
- To improve customer experience: Mastercard’s vision is creating a world beyond cash. In reshaping the digital economy, Mastercard is dedicated to innovation, investing in what matters and connecting everyone to priceless possibilities. Therefore, for a company that wants to change the digital economy, getting involved with cryptocurrencies just about ties in nicely with its vision.
A better customer experience means that the over 27 million people, 13% of Americans, who own and have used bitcoin, should be serviced.
Mastercard’s purpose is to use secure data and networks, partnership and passion, through their innovative solutions, to help individuals and businesses to realize their greatest potential.
WHAT DOES THE PARTNERSHIP PORTEND FOR CONSUMERS?
With a Mastercard crypto card, customers can easily pay for items using the currencies in the crypto wallet, Bakkt. The ease of paying for goods online using the Mastercard crypto card will be immensely increased.
Also, for customers who love bitcoin and cryptocurrency, this move by Mastercard allows them to get rewarded in cryptocurrencies. And spend these rewards on other things using their MasterCard crypto card.
The cryptocurrency wave is sweeping across big companies in the world. Walmart, the retail giant, has opened 200 bitcoin ATMs in select stores across the U.S. With moves like this, a cryptocurrency wallet with a debit card will afford investors, traders and cryptocurrency enthusiasts the opportunity to use their cards whenever they want to. No longer would cravings be suspended because there are no merchants accepting bitcoin or cryptocurrencies as payment.
Moves such as Mastercard’s opens the door for young people to shop more online because they know that their rewards are in crypto. And they can easily use these coins or tokens to buy more things online or trade them on trading platforms such as Redot.com. Having different ways through which customers can use their Mastercard debit cards encourages more people to use the payment service.
So, while this move is beneficial to customers, it also serves to reinstate Mastercard’s vision of leading financial innovation in the digital age.
WOULD MASTERCARD ROLLOUT THIS PROJECT IN OTHER COUNTRIES?
Mastercard has not made any comments as to whether the cryptocurrency loyalty program will be extended to other countries, but there are hopes that as the US market, which boasts of 3.8 billion members in loyalty programs, according to a 2017 colloquy survey, grows, other countries would be grafted into the cryptocurrency loyalty program.
The size of the US market and the growing acceptance of bitcoin and cryptocurrencies in the US makes it a perfect market to test ideas such as this.
Hopefully, the success of this loyalty program will cause Mastercard to extend the idea to other countries.
WHAT DOES THE FUTURE HOLD FOR CRYPTOCURRENCY AND BUG BUSINESSES?
When cryptocurrencies started, the business world was skeptical of its potential, many fearing that its technology was unsustainable and so would fade off as fast as it had started. But the train trudges through. Businesses are now embracing cryptocurrency, blockchain technology and web3.0. Whether it is the adoption of cryptocurrency as a payment or as rewards to loyal customers; or it is decentralized apps that rewards its users, or blockchain used as a trusted ledge for important data; or government officials seeking ways to use blockchain in elections, blockchain technology is more than just a revolution.
WHAT TOKENS WILL THIS MOVE BY MASTERCARD SUPPORT?
Excitement from this news is sweeping across businesses in the country. When the idea is implemented, it is projected the Mastercard’s usage will soar because it appeals to the young generation.
However, nobody knows the tokens that would be supported in the loyalty program.
Would it be bitcoin, Ethereum, Solana or a native Mastercard token that will be rewarded to loyal customers?
Would these tokens, imagining they are native tokens, be listed on exchange platforms such as Redot, or would Mastercard and Bakkt design a special trading platform?
For merchants who’d be allowed to list their businesses on the platform and receive payment in crypto, would there be a limitation on the type of tokens and cryptocurrencies they can be paid with and will there be banks that accept bitcoin?
These are some of these questions that have been left unanswered. Neither Mastercard nor Bakkt has spoken about the approved token(s).
However, given the involvement of Bakkt, one can be optimistic that whatever tokens and coins will be rewarded and allowed will gain attraction and acceptance. Hey, this is Mastercard we’re talking about! They have enough customer base, which they’ll hope to build on, to drive whatever token and coin decision they make.
