Cryptocurrency, while gaining popularity in various markets, is still misunderstood by many consumers and brands alike. John Tschida, Managing Partner with Persuade Loyalty, sat down with Loyaty360 to discuss Persuade’s CryptoRewards Exchange partnership with EZ Car, cryptocurrency as a whole, and where it falls in the discussion with banks.
Tell us more about what spurred the partnership with EZ Rent a Car.
CryptoRewards Exchange is a natural fit for EZ Rent a Car. Their target market is largely Millennials and Gen Y. We built the exchange as a way for brands to show younger generations that they hear them and are willing to provide redemption options that are meaningful. The EZ Money program was a perfect fit as a brand built for the young leisure traveler who is looking for new exciting experiences. When we brought the idea to our client, there were a number of younger employees in the room—all of their heads were nodding simultaneously. It resonated right away.
From a housekeeping perspective, the question continuously asked by those on the outside of the bitcoin conversation is, “What gives cryptocurrency value?”
As with any value discussion, supply and demand are the primary drivers. We are in the very early days of blockchain technology, and it is still relatively unknown by the average consumer. Everyone has heard about Bitcoin… but what is it used for—what can I do with it? Today, the answer is not as much as people would like. However, that answer will evolve dramatically over the coming years. We liken it to the early days of the Internet. Think about buying Apple or Microsoft stock early on. There are never any guarantees, but revolutionary changes in technology that the average consumer can participate in don’t happen that often. Our goal is to make cryptocurrency ownership a very simple process for consumers.
You are adding this as a redemption option where customers choose which currency they want to exchange their points into, not forcing customers into choosing a cryptocurrency that has been created for the sake of the loyalty program. With cryptocurrency still relatively new to a lot of people, put this into layman’s terms for the uninformed reader.
There are over 1,500 cryptocurrencies or utility tokens in existence today. New tokens are announced every day. But, not all tokens are created equal. It all comes down to utility. What benefit does the currency or token provide—what problem does it solve? Those tokens that provide real utility have the greatest potential for future growth. Today, at CryptoRewards Exchange, we offer some of the larger named cryptocurrencies. As our service expands, the options for redemption will greatly increase. This will largely be driven by our member base, their feedback, and our own market evaluations.
What makes a gift in cryptocurrency more valuable than a traditional gift card or branded merchandise?
A traditional gift card or merchandise does provide immediate benefit. Cryptocurrency can also provide immediate benefit, but it can also be a foundation for financial growth. Those that learn about and understand cryptocurrencies and their utility have the greatest potential as blockchain technology evolves. Once a gift card is used, there is no further benefit.
Do you foresee consumer preferences shifting more toward crypto in the next five years? Where do you see demand going in that time?
Absolutely, we are in the very early days of this technology. Within five years, we have no doubt that digital payments using cryptocurrencies will be commonplace. We fully expect several governments around the world to have launched their own national currencies, either in place of or in addition to their existing fiat currencies.
One in four millennials now prefer bitcoin to stocks. Is this indicative of shifts in consumer preferences or are consumer preferences the same across all generations and it is the technology that has changed?
While technology is ever changing… younger generations view technology differently. The trust level in technology is different than that of older generations. Their trust in existing financial markets is also different.
What adjustments do you see banks/brands making in the next few years to adjust to the changing trends in how consumers use their money?
Every bank and financial institution that we’ve talked to about CryptoRewards Exchange is interested. Both for traditional point redemption programs and as behavioral change incentive programs. Today, 39 percent of the world’s population does not have a bank account.