Dubai is set to host the world’s first blockchain loyalty program with the launch of Loyyal, an umbrella scheme aimed at uniting many rewards programs under one banner.
Uniting ‘Fragmented’ Loyalty Industry
In concert with the Dubai national government, Loyyal will use an “unbundled” blockchain to provide value transfer between loyalty scheme participants. This project hopes to unite Dubai’s many existing schemes under one roof. In doing so, the company will create a network concept known as the “Internet of Loyalty.”
“Loyyal is a universal platform built for the loyalty rewards industry on blockchain and smart contract technology,” Loyyal CEO Gregory Simon said in an interview with PYMNTS.com. “We are applying the blockchain technology to pull together the entire loyalty industry, which is highly fragmented for the government of Dubai.”
Loyyal has been given the blessing of the government, which is actively involved in blockchain research itself. Earlier this year, it formed the Global Blockchain Council, which aimed to explore possibilities for blockchain technology usage across Dubai’s infrastructure, in both “financial and non-financial” sectors.
Simon suggested an umbrella loyalty scheme to attract tourists to culturally important sites, as well as a longer-term goal of including incentives for local residents. Points earned while visiting museums and other attractions can be spent with various partners, allowing users to bypass the difficulties posed by the current patchwork of multiple private schemes.
“The consumer downloads a wallet or the embedded wallet within the app or the point of sale device, and the points issuer gives permission for the specific wallet to do what has been agreed,” Simon continued. “The points issuer retains complete control over everything.”
Loyyal will not attempt to run off a full blockchain, Bitcoin or otherwise. Instead, the program will harness smart contract capabilities in its own “attracted value consensus protocol,” or ABCD.
“This allows variation of blockchain and smart contracts and to move value at no cost at the blockchain level to give customization of the smart contract layer without the challenges of using the main bitcoin blockchain.”
Blockchain to Play a Role in Future Dubai Growth?
Dubai finds itself at the center of a Middle Eastern optimism set to provide an ideal environment for fintech in the next few years and beyond.
A report by consultants Booze Allen Hamilton earlier this month highlighted the “rapid changes” afoot in the Middle East and North Africa, noting blockchain’s potential to “help remove the security concerns often raised by organizations to justify their unwillingness to reveal information, while encouraging the adoption of data-sharing incentives and fostering a community-based ecosystem that can determine the value of data over time.”
Dubai’s GDP, meanwhile, is forecast to grow by $5.5 billion by 2018 from what the report calls “digitization.”
What do you think about the Internet of Loyalty and the Dubai government’s ideas? Let us know in the comments section below!
Images courtesy of twimg.com, travelandleisure.com.