Worldwide clearing house for loyalty programme redemptions
A new clearing house will give loyalty programme operators the same benefits that banks and credit card companies now enjoy, without diluting their brands.
A new worldwide clearing house for loyalty programmes is expected to serve a customer base of more than 65 million loyalty programme members when it becomes fully operational in the third quarter of this year. e-Redeem's new web site already shows how the Loyalty Financial Network (LoyaltyFN) will look.
Almost all of today's well-known loyalty programmes, including the major frequent flyer programmes, have maintained separate, expensive systems for presenting and processing awards. Because they were concerned that their brands would become diluted, they steadfastly avoided using common delivery systems, which have been long since accepted as the norm by even fierce competitors within other industry groups.
Protect brand LoyaltyFN will protect each programme's brand, while providing the savings that clearing houses already provide for other sectors, like banks, credit cards and wholesalers. LoyaltyFN will subordinate its own brand to those of its clients, having upgraded technology that was first used by Visa and MasterCard to enhance the brands of credit card issuers.
Establish net worth Using LoyaltyFN, consumers will be able to find out what (and where) their loyalty net worth is, how to save it and how to make it grow faster; also how to use it for products and services (often without redeeming the miles or points they have). It also shows them how to combine different miles, points, or loyalty net worth portfolio values for a single award.
A billion transactions per day The LoyaltyFN platform, which can handle up to 600,000 active memberships, will be open late in the second quarter of 2002 for consumers to begin registering loyalty programme values. The production platform (launching later in the year) will have the capacity to handle a billion transaction messages a day. The technology, which will be housed on both US coasts, has been implemented by Arlington-based Maden Technologies.
Share revenue LoyaltyFN is an affiliate of e-Redeem and clearing house participants will be able to hold a stake in it and share in its revenues. e-Redeem,a privately-owned company based in Washington DC, developed the technology that powers LoyaltyFN in the mid 1990's. Since then it has formed corporate operating partnerships with American Airlines, Continental Airlines, Delta Air Lines, Cendant subsidiaries, and several banks to define and operate business, financial, and technology systems for enhancing redemption in loyalty programmes.
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