This Philippine Start-up is Building the Loyalty Economy With Cryptocurrency
Appsolutely’s blockchain powered LoyalCoin is set to unify the $1.68 billion loyalty rewards industry
PHOTO CREDIT: Getty Images
The thing with loyalty rewards programs is that they don’t always inspire loyalty. And for a $1.68 billion industry, that’s quite a shame.
According to Philippine-based enterprise software services and fintech firm Appsolutely, there are numbers that back up the dissatisfaction that consumers have against most brands’ loyalty rewards programs. The average person would have at least 10 reward cards for use at 10 different establishments — not exactly ideal if you want to save space in your wallet. In the past year alone, over 65% of members of various loyalty rewards programs have switched to a new provider.
“Customers are realizing [that] these rewards can be very limiting, and they eventually stop seeing the value of the program,” relates Appsolutely CEO Patrick Palacios whose company develops loyalty programs for such companies as The Bistro Group, Family Mart, Toby’s Estate, and Bon Chon, among others.
“We realized that you can’t really use most of these loyalty programs outside of their respective establishments so we were racking our brains how to solve this problem,” he says.
Appsolutely’s solution, reveals Palacios, is to unify the disjointed loyalty rewards industry using blockchain technology. Teaming up with peer-to-peer blockchain developer NEM Foundation, Appsolutely recently launched its Loyal Platform, Loyal Coin, and Loyal Wallet to consolidate the traditionally siloed loyalty industry into the new “Loyalty Economy.”
The idea is to enable loyalty rewards members to convert their reward points into the Loyal Coin digital currency which they can use to redeem rewards across different merchants anytime, anywhere. Loyal coins are stored in the Loyal Wallet which will be a hub of all transactions involving the rewards economy: users may not only redeem rewards, but make online purchases, send money, pay utilities, and even convert loyal coin into fiat or virtual currencies.
Powering Loyal Coin is NEM’s innovative blockchain technology, whose Proof-of-Importance (POI) algorithm enables a merchant using LoyalCoin to monitor the transaction patterns of customers and assign specific rewards to those utilizing the platform frequently. Operating at 4,000 transactions per second, the NEM blockchain provides industry-leading processing speeds that can now be leveraged for transactions involving LYL. NEM’s blockchain technology also grants Appsolutely the flexibility to retain control over aspects of the transaction process for which protection of customer data and privacy is a top priority.
A Premier Blockchain Center in Metro Manila
The partnership, which includes anointing several NEM executives into Appsolutely’s Advisory Board, aims to add more muscle to both companies’ expansion plans to provide blockchain services across Southeast Asia.
“This partnership builds upon our strengths in widening the adoption of secure blockchain technology among key target industries in Southeast Asia,” shares Palacios. “With the NEM Foundation in our Advisory Board, we will be more than capable to open new horizons with our merchant partners and their customers,” he adds.
Says Emerson Fonseca, head of NEM Philippines, “Key to NEM’s strategy in the region is Appsolutely’s ability to target the e-commerce space which is seeing a huge uptick especially with more consumers becoming more mobile and more aware of their privileges. NEM will be able to find new environments by which we could use our blockchain technology in a variety of ways.”
It’s also worth noting that, beyond their technology partnership, the collaboration paves the way for the creation of the Appsolutely-NEM Blockchain Center — a premier blockchain academy and co-working space for aspiring tech entrepreneurs and students in Metro Manila that is set to open on the first quarter of 2018.
According to Stephen Chia, NEM Regional Head of Southeast Asia, the venue will be the first in a series of blockchain labs that are planned to open across Southeast Asia, with the largest one currently being built in Malaysia at 10,000 square meters. Relates Chia, “The idea is we want to create a center that is a go-to place for people asking the very simple question: What is this whole blockchain all about?”
Currently, he says, whenever blockchain is brought up in a conversation, people end up talking about bitcoin. “That can get confusing. We want to go back two steps, and say, let’s talk about blockchain, why it is what it is, and where bitcoin fits into all this,” he says, adding that the big goal is really “to train young people who want to become future blockchain engineers, because we feel the next generation of databases are going to be blockchain databases.”