IBM said it has completed a pilot project with Chinese credit card company China UnionPay that will facilitate the sharing of loyalty bonus points among banks using blockchain technology.
Bonus points earned through purchases on bank cards have long been an effective tool to attract and encourage customers to use specific cards. But since bonus points cannot be freely exchanged among different banks, offering various rewards, many go unused.
IBM's collaboration with China UnionPay will enable consumers worldwide to exchange bonus points from their various banks in less than a minute to select rewards they want.
Blockchain, the underlying technology of the Bitcoin digital currency, has become one of the hottest innovations in the financial services world. Technology companies and banks have been exploring the use of blockchain in all facets of both the financial and non-financial industries.
Dr. Shen Xiaowei, director of IBM's China research division and CTO of its China group, said the company also is partnering with the Hyperledger Project to build a blockchain platform and help clients develop more uses for industry.
Hyperledger is a cross-industry collaboration started in December by the Linux Foundation to support blockchain-based applications designed to support global business transactions, including major technological, financial, and supply chain companies.