Can Blockchain Boost Credit Card Rewards?
Blockchain is one of the most frequently used buzz words in today's business environment. The technology is based on a system that uses a digital ledger to record transactions. Rather than storing information about those transactions, the exchanges are stored in a secure and verifiable manner inside cryptographic "blocks." Those blocks are connected in, you guessed it, a chain. The term has earned plenty of recognition for powering Bitcoin and other cryptocurrencies, but the technology itself is doing much more than reinventing the way we look at currency.
Walmart is using blockchain technology to enhance its food safety efforts, and shipping giant Maersk is using it to make major changes to global shipping. Now, the decentralized approach to recording transactions and storing data is changing something near and dear to the hearts of TPG readers: credit card rewards.
Earlier this year, American Express partnered with Boxed to conduct a blockchain-enabled pilot program that allowed Amex customers to earn 5x Membership Rewards points on certain household products from companies like Dove, Cheerios, and Planters. (If you're not familiar with Boxed, the boxes are quite big. They sell wholesale packages, and you can often find some great deals.) While details on the program were scarce, the primary benefit from this blockchain implementation seemed to be a higher level of personalization. Bonus earnings offers were tailored to individual purchasing patterns. "We were able to prove the efficacy the blockchain capability, and how merchants can leverage their own data and insights to provide better, more personalized offers to their customer base," Chris Cracchiolo, Vice President of Global Membership Rewards, told me via email.
Cracchiolo said that Amex has plans to expand blockchain to more merchants in the fall, and he called the move a direct response to card members' requests for more ways to earn Membership Rewards points.
"This new technology will open up new opportunities and channels for card members to earn Membership Rewards points with merchants we know they already love and are shopping at," Cracchiolo said. "With blockchain, our Card Members will receive offers with a higher level of customization, based on their needs and how they've engaged with merchants in the past."
In addition to an increased level of personalization, it sounds like members can expect an increased number of merchants and offers, too. While adding and on-boarding new merchants and new offers typically takes months, Cracchiolo said that blockchain can reduce that set-up time to just a few weeks. Once they're up and running, merchants will have more power over what you see and when. "Merchants will be able to control the types of offers they want to market through their proprietary channels as both live in their own ecosystems, and they are not limited to American Express channels or timelines," Cracchiolo said. "They can create custom Membership Rewards earning structure and assign bonus to items at product or SKU level."
Only the Beginning for Blockchain
Cracchiolo couldn't share specifics of future plans but did allude to conversations with other merchant partners about leveraging blockchain. While the Amex pilot marked the first blockchain-enabled loyalty program experiment in the US, there will be many more on the horizon, and they have the potential to eliminate some of the frustrations and hassles of calculating the valuations of points and miles and waiting for transfers between programs to clear. Consider finding an incredible offer to book a Qantas flight, only to wait two days for your Citi ThankYou Points to transfer, or hoping to book a last-minute stay at a Ritz-Carlton property before realizing that it will take two days for your Chase Ultimate Rewards points to appear in your Marriott Rewards account.
"Blockchain can enable a transaction to be recorded and accessed by multiple involved parties in near real time," Steve Fromhart and Lincy Therattil, research managers at Deloitte Financial Services, wrote in "Making Blockchain Real for Customer Loyalty Programs", "increasing the chance that a loyalty rewards program provider can cut through coordination inertia to credit points faster."
That accelerated transfer speed may still be miles away, but I'll be keeping a close eye on the next year of blockchain activity. Many businesses are investing in blockchain and filing patents for new blockchain applications as they recognize the value of the technology. Let's hope that value trickles down to credit card users soon, too.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.