AMEX Files Virtual Currency Patent

by Mercator Advisory Group 0

Redemption of loyalty points is a pain. Sure, they can be easy to acquire but turning them into something fungible, or at least tangible, is hard because they’re easy to forget and, as an ancillary part of a payment transaction, just not top of mind. As digital content of all kinds becomes a major transaction type, making that redemption could be easier. After all, the intelligence of the device and the back end come together, for the consumer, on a PC or mobile device.

That’s the insight behind the AMEX patent. If you can use a computer network to make “spending loyalty points” easier, you might actually have something. Sometimes it’s worth it to quote the entire post:

The patent, filed in New York late last month, involves “spending loyalty points over a computerised network to facilitate a transaction”.

Under the system description, a loyalty programme participant is able to use an existing transaction card to purchase an item over a computerised network, while at the same time offsetting the cost of that transaction by converting loyalty points to a currency value credit and having the credit applied to the participant’s financial transaction account.

Alongside current account conversion, the patent says currency credit from converted loyalty points may also be applied to “stored value cards, online digital wallet accounts and the like”. Further, currency credit may also be applied to other accounts to effect a gift or donation.

American Express has been ramping up its investments in the digital currency space of late. In June, the firm cut a deal with Facebook enabling card members to spend their reward points on advertising over the social media platform, and in September it acquired Sometrics, a virtual currency outfit targeting the online games community, for $30 million.

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