Loyalty & Rewards

American Express Patents Rewards-Focused Digital Wallet Design

American Express may have decided that its combined power as an issuer and a network can boost its loyalty points into something more closely resembling currency, according to patent documents recently published by the Patent and Trademark Office.

The patent itself is not new; it was first filed in 2014. “Third Party Digital Wallet Pay With Points” is the uber-exciting patent title, and it notes how users with card points could use those points directly at a checkout counter, like any other payment method.

This bucks the current system where the points earned are brand-locked — 50,000 airline points on Delta can, more or less, only be used for air travel on Delta or a partner airline. Amex is bucking that trend and trying to make it possible for customers to use their rewards points anywhere, whether or not the company and the merchant have a relationship with each other.

The question that remains is whether the open points system will really be a boon for customers, since points-based rewards programs tend to become less valuable as they get more flexible. A look at regular, old American Express rewards demonstrates how this works. The “face value” of an American Express reward is about $0.01; however, in practice, the value can vary quite greatly, depending on if consumers use a card with an Amex partner, like Uber, or if they use it to pay down their card bill (in which case, they are worth about 60 percent of their normal value).

However, devalued points are still an improvement over points that go totally unused, and according to a study by COLLOQUY and Swift Exchange, $16 billion worth of rewards go totally unredeemed each year.


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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 AML/KYC Tracker provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.


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