Tech giant IBM and Chinese payment settlement network UnionPay has announced a partnership to develop a blockchain-based system for trading loyalty points.
According to the reports by Financial Times, the collaboration aims to include all varieties of loyalty schemes in the exchange, including air miles and supermarket reward cards.
"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," He Shuo, director of China UnionPay’s Electronic Payment Research Institute said as reported by CoinDesk.
The blockchain based system was developed on a private network of the beta-version Hyperledger Fabric network. The prototype will highlight on how banks can make sure that the loyalty points are exchanged between only accepted partners, CoinDesk report added.
The loyalty points network will attract new customers and stimulate customer loyalty by increasing the kinds of rewards and by opening up incentives between banks.
IBM recently teamed up with Tokyo-Mitsubishi UFJ (BTMU) and signed an agreement to develop smart contracts and automate business transactions based on blockchain modeling.