IBM, China UnionPay Develop Blockchain Loyalty Points Exchange

 IBM is working with a Chinese credit card company to to create a blockchain-based system for trading loyalty points. In a proof-of-concept revealed today, IBM and China UnionPay have  developed a platform that allows customers to trade points earned  through purchases and other incentivized behavior with one another. It's  a concept that can be applied to the exchange of frequent flyer miles,  mobile phone bills or gas cards. He Shuo, director of China UnionPay’s Electronic Payment Research  Institute, described the demo in a statement as a "breakthrough" in the  electronic payment industry. ADVERTISEMENTShuo said in a statement: 

"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."

The prototype was built on a private network of the beta-version  Hyperledger Fabric network, highlighting how banks can ensure that  loyalty points are only exchanged between accepted partners. Further, it is designed to integrate online and offline channels via  blockchain, enabling China UnionPay cardholders to go to supermarkets  and malls equipped with special point-of-service (POS) devices  and exchange bonus points for goods. The loyalty points network is being positioned as a way to attract  new customers and encourage customer loyalty through increasing the  kinds of rewards available, by opening up incentives between banks.