The blockchain can herald significant changes in many different industries affecting our daily lives. UnionPay and IBM are exploring distributed ledgers to exchange loyalty bonus points. An interesting concept, to say the least, especially when considering a working prototype has been demonstrated. More importantly, this concept works across multiple banks, giving it an immediate mainstream appeal.
Another Validation of Blockchain Technology
It is apparent that blockchain will be making headway in the financial sector sooner rather than later. With multiple banks and other financial players exploring distributed ledgers right now, it is only a matter of time until these concepts will be used in a real life environment. If it were up to IBM and UnionPay, that deployment could occur at any given moment.
Both companies joined forces to create a blockchain prototype that focuses on loyalty bonus points exchange. Such a solution would have to support multiple banks and financial institutions, as UnionPay is not tied to just one bank. So far their efforts have been successful, as the blockchain prototype in question has been demonstrated not too long ago.
As was to be expected, the blockchain used for this concept is the Hyperledger offering. This particular type of technology allows for permissioned blockchains, which are then used for the exchange of bonus points. At the same time, this concept can be applied to any range of loyalty tokens, including frequent flyer miles, gas cards, and other purchases.
UnionPay’s He Shuo explains this blockchain development as follows:
“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.”
What is rather exciting is how this blockchain concept can also be used in an offline mode. This would enable card holders to swap their loyalty bonus points by using a compatible point of sale terminal. With consumers often forgetting they have bonus points to spend, this could provide a solution to a rather pressing problem.
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