Consumers Want to Buy Crypto, Spend Using Points From Rewards Programs

As digital adoption has accelerated over the past two years, so too have consumer expectations concerning the growing number of loyalty programs they now encounter. The change marks the front end of a shift that’s forcing companies to evolve obsolete programs that not long ago seemed cutting-edge.

In a conversation with PYMNTS, Rodrigo McCarthy, executive board member at novae, pointed to the travel industry as a one dominant category in which consumers spend and redeem lots of points but are increasingly looking for more flexible ways to make use of their reward balances.

“Consumers now have more options,” he said. “They’re more demanding, and they expect more from their loyalty programs.”

That includes being able to use reward balances however they want, McCarthy said, whether it be through traditional channels such as travel, redeeming points for crypto, or combining rewards with credit cards to redeem rewards “instantly at any [point of sale (POS)] around the world.”

“The consumer today is really looking for a true digital experience that gives them all of the liquidity and freedom to be able to use their points or their reward balances as they wish,” McCarthy said.

Read also: ‘Super App as a Service’ Enables BNPL, Universal Rewards Redemptions, Including Crypto

Currently, novae offers the ability to instantly use reward balances at over 70 million merchants around the world through contactless or online POS systems, and McCarthy said the company also has “a strong merchant marketplace” with about 2,000 affiliate merchants, including Amazon, Macy’s, Best Buy and Walmart, where people can redeem rewards points.

The company also recently launched a new super app platform, called Mile Blue, which allows credit and debit card holders to turn any digital asset, including cryptocurrency, into a secure way to pay across tens of millions of merchants around the world. Card issuers are also able to allow customers to turn points and rewards accrued in their accounts into spendable currency wherever Visa is accepted.

“We are always looking for ways to be able to bring more liquidity to those points and being able to give what we consider a great [user experience (UX)/user interface (UI)] for the customers,” McCarthy said, pointing to the recent demand from consumers to convert points into crypto.

See also: Customer Loyalty Gets Boost From Offering Crypto Rewards

“There’s no doubt that the whole crypto world has a place,” McCarthy said, noting that some of the largest payments companies, including Visa, Mastercard and PayPal, have all started to provide some support for crypto as more stores accept it.

“At the end of the day, it’s a reality,” he said. “I think that the loyalty programs have to be able to offer that option for customers to be able to buy and sell different cryptocurrencies and be able to freely use them at any POS or be able to trade their crypto there.”

Building Loyalty

McCarthy said the goal is to make sure novae is providing reward channels that “are relevant for the consumers” and, ultimately, “generate the loyalty effects” to the entity providing the rewards program, whether it be a bank, an airline, an insurance company or a merchant.

“The end goal is being able to create that loyalty, reduce churn and maximize the business,” he said.

It’s easier than ever for consumers to switch from one bank to another or find a different airline to travel with, which is why these loyalty programs are so important for attracting and keeping customers, he said.

“You’re definitely seeing around the world these legacy financial institutions, airlines, merchants fortifying their rewards programs, their loyalty programs … and over time just create more of a value proposition for their customers,” McCarthy said.

A Year-End Pop

While uncertainty surrounding the pandemic continues to change month to month, people still are willing to travel and shop — especially during the holidays — McCarthy said, noting that novae is seeing increases. The company recorded about three times the level of activity over Black Friday weekend this year than it did in 2020.

“We have very high expectations from now until the end of the holiday season,” McCarthy said. “The first few days of December, we saw a lot of activity, and obviously we expect that to continue to grow.”

As much as these next few weeks will be prime time for loyalty programs, McCarthy said their importance extends far beyond the fourth quarter and the month of December.

“The holiday season augments the relevance of reward programs, but truly, it’s something that has to happen throughout the whole year,” McCarthy said.

Read also: Consumers Mull Switching Rewards to Cryptocurrency