BAKKT is developing a digital wallet which will allow the user to view the sum total of all
their rewards programs for hotels, pharmacies, and bank cards, all in one place... and converted into cash?
The user could spend the thousands of unused airline miles as dollars to buy a product, or go out to eat. The loyalty points the user doesn't even know they have can suddenly be used as spendable dollars.
The user will even be able to trade points for Bitcoin on the same wallet!
According to Fortune, this is the vision for a new product that Bakkt, a startup backed by Intercontinental Exchange (ICE), is planning to develop by purchasing a specialist that handles rewards redemptions for America’s biggest sponsors, Bridge2 Solutions of Atlanta.
Jeff Sprecher, ICE's founder and CEO says, “The Internet should make it possible to create a direct payment system that doesn’t use a third-party set of rails. It hit us that making rewards cash-like would be a step in that direction.”
Hotels, airlines, and banks: These companies often have billions of dollars in liabilities sitting on their balance sheets in the form of unused points. The major sponsors in the U.S. alone are sitting on a cache valued at $160 billion. In today’s strong economy, travelers are using their airline rewards points at a relatively low rate, but if the economy turns down, consumers could start cashing in heavily. This would cause a sudden rush of losses for the carriers.
The market should work, says Bakkt CEO Mike Blandina, because the sponsors will have the flexibility of setting the price. “Companies are always interested in buying back points at the right price”.
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Photo Credit: BAKKT