Not willing to be left out of the growing frenzy surrounding blockchain technology, IBM announced Friday that it is partnering with Chinese credit card company, China UnionPay to enable the sharing of loyalty bonus points among banks with the aid of blockchain technology.
The project will allow customers to exchange bonus points from among any of the banks they do business with, and to select the rewards they want, with a few simple and quick steps.
Enabling banks to integrate and share bonus point systems can be a challenging and expensive task using conventional technology, said IBM.
To address this problem and provide more value for bank customers, IBM China Research Lab and China UnionPay E-payment Institute created a business platform on IBM Blockchain using the Hyperledger Fabric to create a permissioned network for the exchange of bonus points.
The collaboration will also integrate online and offline channels using blockchain, IBM said. This will make it possible for China UnionPay card holders to go to any offline supermarket or mall equipped with intelligent point-of-service (POS) devices to exchange bonus points for commodities by direct scanning.
It is anticipated that bonus points from flight mileage, mobile phone bills, gas cards and food and beverage purchases can be freely exchanged and swapped in the future.
“As a new industry pilot for blockchain technology, this represents a significant business breakthrough and innovation milestone for the electronic payment business,” said He Shuo, Director, the Electronic Payment Research Institute, China UnionPay.
“The joint research efforts between China UnionPay E-payment Institute and IBM Research has enabled the successful exchange of bonus points among banks using blockchain technology, which embeds trust into transactions. This pilot along with similar innovations underway using blockchain will positively change the future of the finance industry,” he added.