How Blockchain Can Work for Employee and Consumer Rewards

Why this burgeoning technology holds possibilities for motivation and incentives.

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Incentive programs, whether they involve reward travel, gift cards or a consumer-loyalty program, can be enormously complicated and involve very sensitive information. This issue was among the topics discussed at Northstar Meetings Group's Incentive Live, the annual educational program for incentive professionals, which took place March 3-6 at the Fairmont Chicago Millennium Park. Among the educational offerings was an expert session in which Holly Glowaty, cofounder of financial-tech consultancy K+H Connection as well as Flourish: The Growth of Branded Currency Conference, discussed the basics of blockchain and the possibilities it offers to the incentive industry, from gift cards to consumer incentives to travel rewards.

What is blockchain?

At its core, it's a distributed ledger -- an account of credits and debits or other things that have happened within a larger account or project. If someone makes a change, it shows that. It's a running list of things that happened, and it can't be changed without noting a change has been made. It's also distributed -- it's not just living on one person's computer, so everyone has a copy of the ledger, and it updates for everyone simultaneously. You'll always be able to follow the history. It's a very simple, elegant system where we can track everything.

How can the technology be used for group travel?

It would work great for tracking things like luggage, reservations and loyalty memberships, but most importantly it's a valuable way to share information. If there is disruption in someone's travel, it would be easy to communicate with every other person or area that could be subsequently affected, all tied through, say, your airline loyalty number or whoever you booked the incentive travel through. If something changes in the itinerary for one person on an incentive trip, it can automatically update the rest of the system and say, "this person will be late, they will be checking in later and the luggage might be arriving on an earlier flight." It creates a seamless experience. You can take out a lot of intermediaries thanks to the added security and efficiency. Imagine not having to collect receipts or invoices from everyone after an event is over -- it will all be automatically there on the blockchain and will reconcile itself.

Why hasn't blockchain been widely adopted?

It means moving everyone to an entirely new system. Even cryptocurrency like bitcoin, one of the best-known uses of blockchain technology, is still being treated more like a stock than as a way to pay. It has to be that someone wants to change their system, and that's the hurdle we all have to work with. But once we get over that, it will have lots of great applications. Industries like real estate and banking have already embraced it. Anytime you're passing personal information around, it's a great fit. It gives that level of security and efficiency.

But it is being used in the stored-value sector, yes?

There's a company called Switch that's processing payments with blockchain, and a company called Flexa that allows you to pay with cryptocurrency in the store by converting it to a stored value account fast before the transaction goes through. There's a lot of people dabbling in the space, but have I seen anything likely to have mass adoption? Not yet. But there are many applications for it: If there is a security breach, it responds faster, noting when something should not be happening. The efficiencies it can bring are the biggest advantages right now.

Do you think the incentive industry is ready to adopt blockchain?

The incentive industry is a perfect place to start something like blockchain. We all already have these connections with companies like airlines, hotels and others, and incentive houses could act as the hubs to take their system and migrate it to blockchain. Then you can be a catalyst for other companies to come onto your system. They're already working with you in a number of ways, and this would be a way for them to work with you more securely.