Blockchain

Amex Experiments With The Blockchain To Deliver Richer Rewards

American Express is embracing the blockchain for it’s Membership Rewards program. The project comes with a big assist from Hyperledger — whose blockchain technology the company is leveraging — and Boxed, the online grocery service that has agreed to pilot the program.

American Express hopes to roll out the blockchain-enhanced version of its Membership Rewards program to all its merchants and card members in the next few months.

“This new innovation is in direct response to what we’ve heard from these audiences — our Card Members want more ways to earn Membership Rewards points, and our merchants want to further harness the power of Membership Rewards to engage their customers and drive spend with their brands,” Chris Cracchiolo, VP of Membership Rewards & Loyalty Benefits at American Express, told PYMNTS.

But it’s about more than just offering “more” — neither Amex merchants or members are looking for volume alone. Rather, Cracchiolo said, it’s about offering more and offering better in terms of presenting the relevant offers to the relevant consumers.

By leveraging blockchain technology, he noted, Amex lets merchants more directly and creatively incentivize consumers with more specific offers, while creating real-time visibility and access to those offers to make sure they are appropriate to brand guidelines and processes.

“Using blockchain, we are giving our merchants the ability to control the types of offers they want to market through their proprietary channels to our card members. For merchants, this new innovation allows the ability to bring offers to market much quicker, and there is minimal lift. Also, we can continue to maintain the level of security and quality that customers know and expect from American Express,” Cracchiolo said.

Merchants’ minimal lifting was particularly instrumental to Amex choosing a blockchain solution as opposed to attempting to acheive a similar end through API plugins. Because Amex will oversea the blockchain technology, time spent on resourcing for the merchant will be minimal, Cracchiolo said. And that makes a tremendous difference for speed: Using Hyperledger’s blockchain technology, American Express can get merchants onboarded with offers up and running within a few weeks. Through the API route, that timeframe would more likely be measured in a few months.

For the consumer, he noted, the Rewards experience remains the same, although the offers they see will likely start looking more tempting, relevant and rewarding as they appear across merchant channels.

“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,” he noted, while also giving them reasons to try new places.

Or it will, when the whole program is up and running. For now, the blockchain project is in pilot mode, with a few select card members working with a single merchant: the online grocery player Boxed. American Express members who order their rations through the online grocery wholesaler can earn 5x Membership Rewards points for select products and brands.

Cheerios, Planters nuts and Dove soap all made the first list, although it will be fairly easy for Boxed to change what product types and SKUs it wants to push its users toward.

Going forward, Cracchiolo said, the sky could well be the limit with how retailers want to leverage their channels — and their relationships with card members — to really customize the types of offerings they’re making with American Express.

“For example, imagine getting 10X MR points when you purchase a specific product at a participating merchant, or, to take it a step further, when you purchase a specific version of a product from that merchant. Or imagine trying the new latte at a coffee shop on a whim because the merchant is offering an additional 100 MR points for that particular drink,” Cracchiolo said.

The new announcement from Amex follows — and answers some questions about — a patent filed last year by an American Express subsidiary for a personalized customer reward system using blockchain technology.

As for what’s next, Cracchiolo said the company is working with Boxed to develop the program and is actively pursuing relationships with other potential merchant partners.

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