Photo credit: Singapore Airlines
Singapore Airlines has launched KrisPay, a digital blockchain wallet that lets members of KrisFlyer, the carrier’s frequent flyer program, convert their air miles into digital currency.
Members can use as little as 15 KrisPay miles (equivalent to US$0.07) to pay for items at the airline’s 18 partner merchants in the city-state, including gas stations, beauty product retailers, as well as food and beverage outlets.
The company said in February that it would initially be teaming up with retailers in the Singapore market.
KrisPay’s blockchain is owned privately by Singapore Airlines and only partners who belong in the network can participate in any transactions made on the blockchain.
The launch of KrisPay follows a successful proof-of-concept exercise completed by the carrier, in collaboration with auditing firm KPMG and tech titan Microsoft. The exercise involved testing the blockchain product and doing trial runs with merchants.
Benefits of the blockchain
Last year, KrisFlyer members chalked up a total of US$700 million worth of air miles, up from US$573 million in 2014 and US$445 million in 2011.
A blockchain crypto wallet that allows the purchase of items at retail shops creates a new avenue for members to spend their miles, helping the airline reduce its inventory.
The decentralized nature of blockchain means that information is not stored in one location, and every partner in the network receives the same set of information arising from a transaction. This makes the rewards system resilient in case the network fails, said Kenneth Tan, chief marketing officer of AI and blockchain company Hearti. “Even if one [network] servers fails, everything – the customer’s information and miles – is still safe,” he said.
Because blockchain transactions are permanent and irrevocable, customer details as well as transactions cannot be tampered with, he added.
Moreover, as the technology does not need a middleman to process the transactions, all redemptions are immediately approved and updated in the system, Tan noted.
Partners getting updates on customer information and their miles in real-time makes it easier for Singapore Airlines to onboard them, said Tokenize Exchange founder Hong Qi Yu.
“They can expand their blockchain network by looping all their Star Alliance partners into it [and create] a unified rewards system,” explained Hong.
More than just a rewards program
KrisPay has the potential to be more than just a rewards redemption vehicle, the experts said. The digital currency can be used as a way to raise money or as an investment product. It can even be converted into cash.
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