A chart of bitcoin’s value, even for one hour, looks like a Richter scale readout along an active fault line — though for Bakkt that doesn’t harm the asset’s appeal as a rewards perk. If anything, it enhances the appeal.
“Even with the volatility we’re seeing in the market there’s broader adoption from consumers and businesses, and there’s an uptake in acquiring digital assets,” said Sheela Zemlin, chief revenue officer of the Atlanta-based Bakkt.
Bakkt recently signed a deal with Wyndham Hotels & Resorts to integrate Wyndham Rewards with the Bakkt platform, opening an addressable market that includes 50,000 hotels, resorts and rentals globally, with 87 million enrolled members. Bakkt in late June also debuted a virtual Visa debit card, allowing consumers to use bitcoin and cash balances in stores, online and across Apple Pay and Google Pay’s footprint, covering retailers, supermarkets, transit and other categories.
The Wyndham integration, which is expected to launch this year, allows users to convert loyalty currencies such as points to cash, bitcoin or discounted gift cards. Bakkt users can also pay with points within Bakkt’s merchant network.
Wyndham is addressing a trend to improve the options for earning and redeeming rewards. Starbucks, for example, recently updated its incentive program to add more payment options without having to preload a gift card, as well as more support for digital wallets; Starbucks was also an early customer of Bakkt. There is also momentum for cryptocurrency rewards. Quontic Bank and NYDIG in late 2020 launched a card that pays 1.5% in bitcoin back for each debit card payment.
“We’re looking to allow members to use and earn reward points in different ways,” said Geoff Crossin, group vice president of loyalty and partnerships at Wyndham Rewards, adding internal research has found consumers are more likely to use the loyalty program if there are more options.
The debit card and Wyndham contract capped a busy spring for Bakkt, which operates a digital currency exchange as its core business. Since launching a digital wallet to combine bitcoin and other digital assets at the end of March, the three-year-old company has stacked a series of products to support incentive marketing and payment processing.
An April partnership with digital payment company Cantaloupe is designed to support cryptocurrency payments and incentive marketing points across Cantaloupe’s network of unattended retail clients. Another Bakkt digital wallet upgrade in June allows Bakkt users to send bitcoin, gift cards and cash to any user, not just those using the Bakkt app, a move designed to spread digital asset transactions to broader social circles.
“We want to make digital assets accessible to the masses, to use digital assets like rewards and loyalty points, whether it’s spending on merchandise or exchanging points for bitcoin to share and send to family members,” Zemlin said.
Cryptocurrency suffers from price swings, and the most recent volatility was extreme even by bitcoin’s standards. Bitcoin recently fell below $30,000 after reaching a high of more than $64,000 in April. Dramatic daily valuation swings have often resulted from events as benign as Tesla CEO Elon Musk either purchasing bitcoin, or making a joke about cryptocurrency on television.
There have also been regulatory moves that highlight the uncertainty of bitcoin trading and its valuation. U.K. regulators have banned the Binance exchange following the exchange’s withdrawal of an application to register with the Financial Conduct Authority because it did not meet anti-money-laundering requirements. Governments in China and India have long pushed restrictions on cryptocurrency.
Regulators in the U.S. and Sweden are also signaling tighter controls. Michael Hsu, the acting comptroller of the currency, in early June told U.S. regulatory agencies to set up a “perimeter” to regulate cryptocurrency, reports the Financial Times. Stefan Ingves, the governor of…