Incent from A to B
Tuesday 16 August 2016
People are asking how our forthcoming loyalty token will actually work in practice, so here it is.
By now you’ll no doubt be aware that we’re developing our own blockchain-based loyalty token, Incent, designed to address the inefficiencies and problems in the rewards sector. Unlike existing rewards schemes, you’ll be able to transfer this token to third parties, opening up the opportunity to send it to friends and family, and trade it on exchanges - giving it real value. Not only that, but it’s configurable: merchants can decide what proportion of each purchase to return to the customer as Incent, and what discount to give when they pay in Incent.
So what, exactly, will this look like in practice?
Merchants get powerful tools to help them incentivise repeat commerce
Alice is an e-commerce merchant. She signs up for the Incent scheme and integrates the Incent software into her site. The mark-up she charges on garden supplies means she is happy to return 10% of each purchase to her customers in the form of the Incent token, to encourage them to shop with her again. She also decides to offer a 10% discount to customers who wish to pay with Incent.
Bob is a landscape gardener. He buys $1,000 of supplies from Alice using his credit card. To receive his rewards he downloads the Incent smartphone app. Alice takes 10% of the purchase amount, $100, and sends it to BitScan, Incent’s issuer and primary broker, along with a message including Bob’s registration details.
BitScan issues $100 of Incent to Bob at market prices. (A proportion of the $100 received from Alice is used to buy Incent from the open market, providing support and increasing the value of Incent for all holders, whilst the remainder may be new Incent issued by BitScan.) In this way the price of Incent increases over time as customers and merchants transact.
Bob now holds Incent in his wallet. He can use this to buy goods from Alice again, or from other participating stores. When Alice accepts Incent at point-of-sale, the reverse of the previous transaction occurs and she exchanges Incent for dollars at market price, via BitScan.
Bob may opt to transfer his Incent to someone else as a gift, or even to sell it for cash to BitScan or via another exchange. However, as a tradesman he knows that his money will go further if he spends it with Alice - and that if he holds Incent over the long term, its value will increase even more.
Ultimately, it’s pretty simple - but we think it’s an incredibly powerful business model and offers huge advantages to merchants and customers alike.
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