Bakkt’s plan to grow its network of digital assets

Unused gift cards sit idly in a drawer.

The 333 reward points a consumer has accrued from a niche retailer will likely remain unredeemed, as this is a retailer that consumers rarely buy from – and the value of the points is not enough incentive to motivate a consumer to buy more.

And then there are the thousands of airline miles and hotel points that have been frozen, largely unusable and of no value to the consumer.

The new CEO of digital asset network Bakkt, Gavin Michael, told Karen Webster that the digital age has brought with it a way to break the rigidity of loyalty programs – leveraging the platform model to offer rewards and cash to consumers wherever they shop.

Along the way, a different kind of connected economy is being forged, where brands that have an affinity with each other can, according to Michael, come together to createmulti-brand loyalty proposals.

Going public, building partnerships

It’s been an exciting month of headlines for the company, which was founded in 2018 and went public this month. The Company’s platform enables consumers to leverage the Bakkt app to manage and spend assets ranging from cryptocurrencies to rewards points, gift cards across an ecosystem of brands.

At a high level, consumers can convert digital assets into cash as they wish (for example), send gift cards, cryptos, or cash to others, or redeem airline miles for devices electronics.

In recent announcements, the company said it would partner with Finastra to enable crypto trading for community banks and credit unions. The company also said that through a partnership with Google, Bakkt users could add their Bakkt virtual debit card into Google Pay to transact anywhere Google Pay is accepted. Digital assets like bitcoin would be converted into fiat currency to enable these payments.

Read also:Bakkt/Google partnership enables widespread access to digital assets

Today, Michael said his ambition is to expand his network beyond the roughly 100,000 users seen at the start of the year to reach a target of 31 million by 2025 (as detailed in its investor presentation) – and beyond. Michael said network effects materialize when consumers can “spend, send, buy and sell these assets” interchangeably.

For brands, the added value lies in the interchangeability and fluidity of rewards. Bakkt’s “white label” functionality helps brands and banks build customer loyalty by allowing them to trade just about anywhere. This goes against the conventional, siled approach where loyalty points were traditionally created and offered for an individual to redeem at (only) the issuing merchant. Fungibility gives rise to a connected ecosystem, Michael said.

“Many merchants are now looking to become relevant early in the shopping experience and help expand their ‘funnels’ because growth is a primary goal,” Michael said. Getting consumers to use rewards programs more actively allows merchants to re-engage with their rewards members.

Merchants can “bring their brand to life in the consumer’s daily life and provide them with more moments to recognize that their brand loyalty is working for them,” Michael said. In terms of the numbers, the company said late last month that it had reached a milestone of 1 billion points and miles linked to its app by users since the company launched the app in March.

Read more:Crypto Marketplace Bakkt App Users Connect 1 Billion Loyalty Points and Miles

PYMNTS researchconfirms the sentiment that consumers want to use crypto to make transactions, as 18% of consumers say they would be likely to use crypto to make a purchase.

See more : How consumers want to use crypto to buy and pay in 2021 and beyond

As discussed in these digital pages for the past few months, the company’s B2B2C model allows Bakkt’s platform to be available across its partners’ platforms and channels. Winking at the Finastra deal, he said Bakkt simply powers transactions through connectivity through an application programming interface (API) and as a platform has “removed any concept of trademark dispute”.

The platform, he said, “allows us to present ourselves in so many different ways. We can present ourselves as a brand experience, down to a minimal brand experience. We want our partners to succeed. We are not trying to create a rival brand.

For merchants, he said, there is the opportunity for a merchant to reconnect with the consumer. The merchant gets full attribution as to where the points go and gets more customer data – and how those people interact with other brands as well.

Research, he said, shows that 70% of consumers think being able to convert points into cash or another digital asset is a “must have”.

Verticals that have been early adopters of the platform model and fluid rewards programs, Michael said, include travel and entertainment brands looking to add value to their customer engagement.

“We think there are a number of adjacent industries where when you think about gamification and you think about driving the right behaviors and the right customers,” as businesses go beyond rewards and rebates classic money, said Michael.

With the digital asset market, brands can get “creative and contemporary” with rewards, he told Webster.

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NEW PYMNTS DATA: 70% OF BNPL USERS USE BANK PAYMENT OPTIONS, IF AVAILABLE

On: Seventy percent of BNPL users say they would prefer to use the installment plans offered by their banks – if only they were made available. PYMNTS’ Banking On Buy Now, Pay Later: Installment Payments and the Untapped Opportunity of FIssurveyed over 2,200 US consumers to better understand how consumers view banks as BNPL providers in a sea of ​​BNPL pure-players.

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